Executive Insight

John Powell and I recently had the pleasure of chatting with Jason Maynard (@jasonamaynard), Software & Internet Analyst at Wells Fargo Securities. John and I had slides, but we spent a majority of the conversation answering Jason’s insightful questions. It turned out to be an interesting discussion and one that encapsulates Alfresco’s strategy so we wanted to share it with our larger Social Content community with Jason’s permission – thanks Jason! Jason’s questions and comments are in bold and the rest comes from Alfresco’s John Powell.

How do you position Alfresco versus other products when you talk to prospects and customers?

That’s a question that is in transition right now. The business we started with Alfresco and the revenue we have today is very much CIO-driven and ECM-focused. Alfresco is better, faster, cheaper than ECM alternatives with a more modern architecture, built-in meta data, workflow, automatic rules, transformation – ECM that works in a modern world with features like activities as social interaction becomes more important.

Where we are in the market is changing though, now that we have Alfresco in the cloud as a service. We have different positioning from others in the cloud – Alfresco is always going to be enterprise, to enable a single version of the truth that is managed inside the enterprise. Organizations can use the cloud for those use cases where you need B-to-B collaboration or fast deployment or mobility. Then you can move content inside the firewall as needed. We can do that because it’s the same system running in the cloud and on-premise. It’s easy to transport the meta data along with the content without building complex integrations.

So our appeal up until now has been for the IT cadre for an organization, to improve the cost structure and speed of delivery. But for business users, Alfresco has been similar to what other systems provided – though in a more modern context. Moving forward, the cloud lets us do different things. Especially when you bring in tablets. Our strategy is to do what we can do to improve business productivity in a mobile environment. Content is such a big part of that. Devices are designed for content consumption. They are mobile, sales, browsing, marketing collateral, status reports metrics – those are the use cases.

What I love about the new world of cloud services is that they are marketed directly to users and this facilitates my ability to do my own IT. How does Alfresco market to business users?

To be candid, we’ve been growing Alfresco consistently, in excess of about 40% growth based on our ECM product and our open source strategy. We’ve proven that our open source model is very effective with developers and IT professionals, people who are building apps and managing projects. But they are not end-users. We have traditionally looked only at the relatively small universe of savvy, developer-oriented IT people.

But the ubiquity of the cloud changes the game. With Alfresco in the cloud, we’ve created an experience that is every bit as easy to sign up for as consumer services. We’re the only ECM player that has pushed the system to the cloud in a multi-tenant, SaaS environment where you can go, sign-up today and use the system in a freemium model. Over 15,000 organizations have signed up for Alfresco in the cloud during the first 90-day beta process.

Users can carry on using our cloud service independently, as a paid user, but you’d also be able to say to IT – this works, we can use it in both cloud and on-prem models. And you won’t lose access to the content I create no matter my employment status.

Do you compete with the cloud-only collaboration and file-sharing providers?

Not traditionally. People who are going to use the cloud were never going to use Alfresco on-prem – so we’ve had different competitors. What we see with those services, is that the content being stored there is not part of regulated or structured processes. It would take about 15 minutes to transfer files from one service to another – they’re not differentiated. They don’t have a sticky business model, but they can solve a very short-term pain point for end-users.

Cloud models borrow heavily from the original open source model, which removes the friction for buying and adoption for IT. Cloud does the same thing for business users. Alfresco can apply the same ethos to business users and go viral on both sides. The investment community is taking more of a venture mindset these days, if an operating loss is intended to ramp distribution and development. Assuming Alfresco is profitable or breakeven, do you think it is investing enough in the opportunity?

Our management team grew up when you had to run a profitable business. The stickiness of the model that we have now stems from that – we want our customers to see that we are managing the business responsibly. This year we are investing heavily in R&D as well as in cloud and mobile. We are also investing in marketing to business users, something we have not done before.

Do you have the necessary team in place to scale the business?

We have been building depth to our US team, we just added a layer of regional VPs. Part of that is because the old business was inside sales following up on open source downloads. There was a point to that model. Now our message can go to the C-level, it’s not just for developers anymore. We’re recruiting a more traditional enterprise team in the US with a targeted account model. We’ve had a strong channel for awhile globally and that really scales.

We think this is a huge opportunity, though we don’t intend to rule the world. Some of the positioning we see from cloud providers is maybe a little farfetched.

Do you think it is easier for Alfresco to build end-user centric features than for a consumer-oriented service to add ECM?

We created from the start a business model that demands we provide excellent customer service, a renewing subscription. That model means we can have a smoother transition to the cloud. We are not afraid of the cloud as a delivery channel compared to the Microsoft dilemma over Office 365 cannibalizing SharePoint sales.

We’d love to continue the conversation or if this discussion spurred on any additional questions, please leave a comment for John or Jason below.

About the author

Kathleen Reidy

Kathleen Reidy is the Director of Market Strategy at Alfresco.

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