Sramana Mitra: Give me a sense of the competitive landscape. We know this market reasonably well. If you could help us understand who are your direct competitors are, that would be great.
Sean Donaldson: There’re a lot of companies who do SAP really well. There’re also others who do Oracle really well. We’re probably the only business under the billion dollar large IBM-type organization that has this breadth of application expertise. That’s where we really differentiate ourselves. We have the flexibility and the nimbleness of a smaller organization but the capability of an IBM or Xerox.
Scott McIsaac: Typically when we run into different competitors in the sales cycle, we’re running up against the IBM, EDS, Xerox, or the very specific smaller niche hosting providers that are really good at SAP or JD Edwards. We don’t run into a lot of companies that are our size and have the breadth of technology that we have.
Sramana Mitra: When you’re competing with an IBM for example, are you competing primarily on price?
Sean Donaldson: Price is always a factor in it, but a lot of it comes down to service. What we found with our customers that come from the large service providers is that when you’re hosting their most critical application, you need to work as a partner with them. You need to work with them.
It’s technology. There’s always going to be issues and room for upgrades and optimization. The most important thing is being able to work with them as a partner and look at their roadmap for the future and tackle current issues that they have. As Scott said earlier, helping them to focus back on their business. How does the technology we’re hosting help them provide a better business?
Sramana Mitra: I can see that. Is that a credible positioning against a company like IBM? IBM says exactly the same thing.
Scott McIsaac: Sure, but the companies that we’ve won from IBMs look at us because we give them the touch and the feel that they’re really looking for. In the IBM world, they might be a small fish in a big pond. In our world, they’re going to be a big fish in a much smaller pond. So we can give them the more personalized touch to the service.
Sramana Mitra: So your target audience is smaller companies than what IBM goes after? Is it the mid-market?
Sean Donaldson: Our target customer base is customers in that $500 million to $10 billion range. We have customers that are larger than that and we have customers that are smaller than that, but I’d say our sweet spot is the mid-size business that’s somewhere between $500 million to $10 billion.