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Building a Pre-IPO Company Over 10 Years: Centrify CEO Tom Kemp (Part 4)

Posted on Thursday, Apr 10th 2014

Sramana: At that time, what were you proposing with your elevator pitch?

Tom Kemp: At a high level, it is what we are doing now. The general idea is that as the world gets more heterogeneous from an IT perspective, it introduces complexity with multiple logins and difficulty for IT to control access. If you think back 10 years ago, heterogeneity was happening in the data center with Linux coming in and replacing Unix or Windows. We wanted Centrify to come in and make that environment look, feel, and smell like its homogenous from the perspective of authentication, authorization, and policy.

That was the basic idea. Our focus was on premise and we wanted to leverage existing infrastructure that customers had with the ability to call back to Active Directory. The good news for us was that the overall thesis behind the company is even more applicable and people move to cloud and mobile. As the tech industry evolves, the problem has only become more complex. At the highest level, the idea behind the company is more applicable now than ever.

Sramana: In the process of building the company, what were some of the significant milestones? Obviously your first round of funding was one that we have already discussed.

Tom Kemp: We started building the product and while we were building it we would go out and vet the idea. When you form a company you talk to 5 or 10 people. Once you get the money and a product manager onboard, you talk to 40 or 50 people. Then you find what you thought was true was not really the case.

I thought the use case would have been more around IT savings due to reduction of help desk cost. People would have been motivated to make IT more efficient. It turned out that when we started talking to people, the real driver turned out to be compliance and security. They wanted us to be able to help them address regulatory compliance like PCI. In the 2004 time frame, our product was a must have because of our audit and security features. We updated our story to demonstrate how we matched to compliance and security operation centers.

Validating the product and adjusting our messaging was a milestone. The next milestone that followed was shipping the product. From that perspective the milestones were largely around sales ramp. Hitting $10 million for example, or adding new products.

Sramana: What was the price point?

Tom Kemp: On an average, it was $70,000 or $80,000. Some deals would be smaller or larger. We felt that if we could do an initial sale, we could land and then expand. As the months and years go by, people will come back and buy more if your technology is a must have.

Sramana: Who was your buyer? The CIO’s office?

Tom Kemp: That is another interesting question. Everyone who forms a tech company wants to sell to the CIO. Most CIOs get 100 people calling them every day. We sell to the people who are responsible for infrastructure or who are in charge of security. As much as you want to sell high, you have to take into account that those people are very busy. You need a director level person to champion you.

This segment is part 4 in the series : Building a Pre-IPO Company Over 10 Years: Centrify CEO Tom Kemp
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