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CEO Spotlight: Dave Peranich, Centrata Inc.
By Angel Mehta, Managing Director, Sterling-Hoffman Executive Search
Angel Mehta: I understand you started at Lockheed as an Engineer and did that for almost eight years… how or why the transition from engineering to sales? From a temperament / personality perspective, those two areas tend to be mutually exclusive!
Dave Peranich: There were a few reasons…. First, while math and science always came easy, engineering was just not high energy enough. I was a guy who needed to be outside in the field more, closer to customer interaction. So the transition was one that was very befitting my personality and natural abilities on the human side. Oracle was and is a machine for creating refined talent from raw capability. They had phenomenal capabilities for education and coaching. So it was a great spot to start.
My primary intention in going to Siebel was to get the training, background, and experience required to become a CEO. Once I achieved that, I stuck up the periscope a bit and Kleiner-Perkins came to me with this opportunity. I felt that the market opportunity for what Centrata was doing was outstanding. It was an early-stage market that was just starting to bloom. It was one of the last areas, in my opinion, that enterprise software had not been substantially leveraged to bring some of the efficiencies that it can. It focused on some of the areas of IT operations that hadn’t been focused on before. It also leveraged my background, both with enterprise software and databases at Siebel and Oracle, but more importantly really fell in with my IT background at Remedy. Centrata itself needed somebody who could drive sales and marketing and that’s what I did best.
Angel Mehta: Given that IT organizations have been cutting back tremendously over the last few years, how do they justify purchasing a solution that seems to be purely for IT and not focused on the business user?
Dave Peranich: That’s just it. The CIO has been cutting back for the past several years and at this point, it’s no longer feasible to keep cutting – they have to figure out how to do things better, faster, cheaper because any more cutting would hurt the business. This becomes an exercise in improving operational efficiency. IT departments constantly want to look at how they are delivering and get visibility into the business to find out key metrics, put in place SLAs and plant in the ability to benchmark themselves against other operations. They also need to consistently figure out how to add value to the business. They have to figure out how to align their services around business priorities and help the business people do whatever they do, better.
So Centrata’s value proposition is honed in around those key areas. We believe you cannot do these things well unless you take all the things that IT does, which are repeatable, turn them into products and put them in a product catalog. When your IT Services are cataloged, you can deliver them faster, better, cheaper – and actually have visibility into your own performance. It also gives the business people a way to understand what you as an IT department offer, manages expectations about how long something will take, and helps prioritize their requests based on what’s most critical to the business. The worst approach in IT is to have a ‘first-in, first-out’ delivery model. Some things are just less important than others.
Angel Mehta: Is this a business problem that CIOs understand immediately in a way that lets them see the value of Centrata’s offering, or are we still in a phase where education is required?
Dave Peranich: There has been a dramatic change over the last year. When I first came to this company, we were in education mode, no question. But nine months later, especially amongst the larger Fortune 500 companies, there’s a broad acceptance among IT Managers that service delivery management is something they need to wrap their arms around. It’s more than just conceptual – there are a lot of live projects out there that Centrata is a perfect solution for.
Angel Mehta: How about outside the Fortune 500?
Dave Peranich: Among mid-tiered companies who aren’t as far along, there’s still typically some education involved. Basically it’s a function of how advanced the companies are in their approach to Information Technology. Overall, we’ve had a dramatic increase in the number of RFP’s targeting specifically what we do.
Angel Mehta: How has that impacted Centrata’s business priorities or immediate strategy?
Dave Peranich: It hasn’t. Our first focus is sales and marketing execution which, translated, equals customer acquisition first and revenue acquisition second. After that, customer success, making sure that every single customer receives 100% satisfaction out of their experience with Centrata. The third thing is our partner strategy. So these are the top three priorities that we have right now: bringing customers in, making them successful, and enhancing our go-to-market through expanded partnership. That hasn’t changed.
Angel Mehta: I remember chatting with you once and you distinguished between cultures that are sales-driven vs. customer driven. Could you elaborate?
Dave Peranich: A sales-driven culture is more concerned about what we need this week or this quarter to make any given customer happy. If we let sales drive the culture, particularly because we have an infrastructure software product, we would be going down a different road each day of the week. A customer-driven culture really takes a longer-term view of the value that we can add to the customer. It builds out the product and the company’s ability to deliver against the product based on that long-term vision.