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Will the enterprise market spend significant IT budget on Windows Vista in 2007?



Interview with Jeffrey Beir, CEO/President of eRoom Technology
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Sterling Hoffman: Are you doing anything to improve and bolster investorís confidence?

Jeffrey Beir: Iím not spending a lot of time focusing on the PR Investor side. I do my share speaking with the bankers, they come in to remain up to date on the business and I do a number of the investor conferences to keep telling our story. Our story is very powerful if an investor cares about software technology. If they donít care about software technology I canít tell a story that will convince them otherwise.

Right now, there is a class of investor that is very wary of technology stocks and until they come back, itís like pushing a rock uphill. Also, I need the market to be ready and receptive to an IPO, which itís not right now. So the only work Iím doing in the financial world, is keeping our story out in front of potential investors and keeping myself up to date in delivering that message. Most of what Iím doing right now is making sure we are running a healthy, profitable software company.

Sterling Hoffman: Do you spend a lot of time in front of your customers?

Jeffrey Beir: Right now, my job is probably best tuned for my skills. Iím spending a lot of my time on strategy, on product, on customers and on partners. Thatís great role for me right now. I have a very strong CIO/COO type person who is my Chief Financial Officer and Sr. VP Operations and heís spending a lot of time more on the day to day and getting the quarter done. And so, we divide the world where he is more quarter/short term focused and Iím strategy, product and long-term focused.

I spend a lot of time with customers and partners if itís on strategic issues and where we are going, also dealing with any problems they are having with us as a company overall and maintaining the relationship. And I love that role. I donít spend a lot of time with customers today closing deals or selling software. I have a very strong team that does that.

Sterling Hoffman: How are you different (versus your competition) in terms of product innovation? How much do you encourage your customers and employees to get involved?

Jeffrey Beir: Ours is a simple formula, we put forth a very strong vision that our folks believe in and our customers believe in. Then we spend a lot of time listening, and taking feedback. At one level we donít want to build only what our customers ask for because sometimes they might miss something. You certainly can listen to what the customer requests are, try and project beyond those requests and understand what the underlying need is.

We pride ourselves in more then just being ahead of the technology curve. We are delivering business value and making sure what we deliver in the product actually helps our customers solve their own business problems. So, how we compare competitively, is much more around clarity of vision, awesome execution and focusing on those things that deliver high payback for our customers. You know, from a technology perspective we are doing some pretty innovative things, but technology without the business value is not the point.

How are our employees are involved? Well, all our employees are involved. We have product designers and managers that are driving the specs and the requirements but itís a very open communicative environment around how we improve parts of the product. Customers give us feedback and there is a lot of visibility with that feedback, everybody touches the customer, everybody gets a sense of what the customer is trying to do with eRoom and we build that into everybodyís understanding of what we are about.

Thatís the way we continue to be better because we continuously challenge ourselves. We donít believe that we have the best ideas concocted in engineering. With input from employees, customers, and partners, we all create some ideas, test them, prototype them, get some feedback, improve them and more often then not, what ultimately gets shipped is different from the initial concept. Ultimately it comes down to smart, creative people coming together, making a judgment call and taking a product in a particular direction and feeling empowered to do so.

Sterling Hoffman: Is there any one competitor that concerns you most these days?

Jeffrey Beir: There is always one competitor that always concerns me. One should never discount Microsoft, they continue to try and compete in the space we are in. We see them in a number of accounts; they have the resources to do whatever it takes to win this market. So far they havenít gone after the market in the way we have, which is really enterprise-wide ready/extended enterprise collaboration. Theyíve mostly focused on small teams and lighter weight collaboration but we always worry about what Microsoft might do. They have the resources, the people and the ability to execute here, fortunately over the past couple of years theyíve been focusing on other problems. Thatís kept them busy doing other things. But, we certainly watch them carefully, stay on top of their technologies and stay close to what they are doing.

Sterling Hoffman: Microsoft is getting very comfortable with Groove these days, is this why youíve decided to focus more on the enterprise application approach?

Jeffrey Beir: In terms of Microsoftís closeness to Groove, you know, we havenít run into many situations where Microsoft has brought Groove in to compete with us. We occasionally see Groove in some of the same accounts but they are mostly focused on pilots in a particular group within the division of a company. We are more focused on winning the entire enterprise, and getting the standards instituted within the enterprise after weíve won particular business units. Groove has done a good job building integration from Microsoftís latest technologies and getting some good PR as a result of doing that. I think the fundamental problem they are trying to solve is not well solved by their technology, itís better solved by eRoom. If the customer is truly looking at putting together an extended enterprise team that is mission critical in trying to get something done that involves large amounts of content, covering many geographies and many companies, e-Room is the right solution.

Sterling Hoffman: What are three key lessons that you learned this year that you feel would be of value to other software CEOs?

Jeffrey Beir: First, market downturns are opportunities to extend your leadership position. That is challenging in an environment where it is difficult to raise capital. But with focus and an internal investment, we are finding that competitors that are less focused or arenít as far along, are having a harder time keeping up. Weíre extending our leadership position during this time, and itís allowing us to improve the way we do business so that when the market picks up again weíll be a stronger company. So thatís lesson number one. We are using this market downturn as an opportunity to get better rather then lament that the financial markets are terrible and customers are hard to predict when they are going to buy.

The second one is actually one I learned this summer. Doing business in these times requires a new work/life balance. We talked a lot about keeping things in balance but in the past there were very, very, long work hours, then you figured out a way to take a couple of days vacation and you took your laptop with you. What I found out this summer is that I took a little more time off, actually a two-week vacation this summer, which is the first in the entire history of eRoom, and, I remained connected but it was in a way that was more managed, I wasnít taken away from my family because of some emergency at work. It was, ďDad needs to do this particular piece of work at 4 oíclock today, so letís make sure I can step away from what we are doing to go do that and then come backĒ. As long as expectations are set well and youíre disciplined about it, thereís a way to get a new work/life balance that is connected yet allows you to really focus on your personal life and your life balance.

Part of that is borne out of necessity realizing that this is marathon, not a sprint. The expectations are very different now versus the time when young CEOs said that they would retire at 45 and go kick back at the beach. It is now much more about the journey, this sounds so trite, but itís true; enjoy the journey as we are living it rather then deferring all the joys until some kind of future liquidity event. That future liquidity event may be very far off into the future.

The last one is, these are times for very strong CEO leadership and most importantly, spending it absorbing the ambiguity of these times. To a great extent, employees want to believe, want to know that they are going to have an impact on the marketplace. And while they look outside and see lots of companies that are hitting the wall and lots of their friends are getting laid off, the most important thing that I can do as a CEO is maintain the clarity of vision, over communicate that vision and absorb the ambiguity of the marketplace, both the financial and economic markets, so that people can focus on what they need to do which is to continue to execute in the same direction.

Angel Mehta is a Managing Director at Sterling-Hoffman, a retained executive search firm that represents venture capital firms and enterprise software companies in VP Sales, VP Marketing, and C-Level recruitment projects. He can be reached via email at: amehta@sterlinghoffman.net.


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