Sramana Mitra: How did you price this new product?
Feris Rifai: The original OEM agreement started out as a royalty fee. The Symantec folks were selling it directly to the client. That grew from there to cover more of the Symantec portfolio of products. It also grew to Symantec actually including it in their product portfolio.
Sramana Mitra: Your go-to-market strategy for this product was an OEM business model?
Feris Rifai: That’s exactly right. That helped us fund our own ambition on the R&D side. Back to your point about services companies transitioning into product companies, that actually continued to help us drive that growth because we were able to use a much larger organisation’s sales force to sell our product.
Sramana Mitra: How long did you continue in this OEM mode?
Feris Rifai: That continued until we completely transformed our company to be a product company. Throughout that journey, we were a hybrid of an OEM partner to Symantec and continuing to develop our product. Also, we were continuing to do services to finance what we were doing on the product side. What happened is some of these clients would get much closer with us. They would then share with us some of their more strategic challenges. In 2011, we connected with a very large financial institution who, in essence, had much bigger needs.
They trusted Bay Dynamics to help them do exactly that because of our base technology, which is IT analytics. That evolved into us introducing a product in 2014. What happened is we worked very closely with the customer. In 2013, we were in a place in our life as an organisation where we could turn into a full-fledged product company. We didn’t want to burn any bridges in the market from our services. In 2013, we introduced Risk Fabric, which is our technology today.
Sramana Mitra: Let me ask you one question and then I’ll bridge this back. Is the current business still an OEM?
Ryan Stolte: Today, we have an OEM relationship with Symantec on that product. Then we introduced an entirely different product in 2013.
Sramana Mitra: From 2007 to 2014, you operated in this OEM business mode?
Ryan Stolte: Yes, and some level of services. It was in 2011 and 2012 when we stopped and started being much more focused on being a product company. In 2013, we introduced our product and started branding it in the market.
Sramana Mitra: What revenue level were you operating in at this point?
Ryan Stolte: We don’t actually share exact numbers, but we were between $5 million and $10 million.
Sramana Mitra: How did the revenue split between your OEM business and the services business?
Ryan Stolte: At that time, it was 50/50. Then we started transitioning off the services revenue as we went on.