Siamak shares his thoughts on what has led to InfoStreet’s success, the future of Application Service Providers and how it will impact the Desktop Operating System.
Interview conducted by Nathan C. Kaiser on Monday, April 19, 2004 in Tarzana, CA.
InfoStreet is a company that was started in 1994. One of the few companies created back then specifically with the Internet in mind. We started as a company that provided consulting services to big corporations. Today is focus is on web based group ware. This is software that facilitates group interactions and is an automated IT service over the Internet.
Exactly, it is an automated IT service, which provides solutions to small companies. If a company needs an Intranet, their needs include; email, virus protection, calendar services, file sharing, address books, costumer service solutions, web based publishing, work flow, etc. All of these services are provided in one suite and they can turn any feature on or off, as they need them.
There are several types of companies that use InfoStreet. Some of them are large ISP providers that bundle our tools as part of their services. For them we are an OEM provider. The second type, are customers who are end users of our products. Typically these companies have fewer than 200 employees and use our service as their Intranet.
For companies with more than 200 employees, they often employ InfoStreet as an extranet solution. For instance, we have clients who are using our product for all of their vendor, franchises, etc. It depends on the nature of the company. Web based groupware is often used by groups of individuals. Basically, you not only have tools for groups but also for individuals as well.
We designed our solution for very large-scale solutions. However, we designed it so that it was extremely flexible by giving people the ability to only utilize the features that they actually need. Our system allows an individual to use our software and can easily scale to hundreds of thousands of users.
As within any company, there are groups of people doing different things. We are targeting both opportunities. We have a threefold strategy to target new business. Our business development team targets partnership with larger companies as an OEM solution. We also have a sales team that targets companies directly so that they may utilize our service. Finally, our website allows individuals to sign up automatically as well.
The vision that we had originated around the idea of time-sharing. We realized that as the number of software solutions increased companies would not be able to afford everything. We banked on the fact that people would eventually want to have a solution completely dedicated to their needs, but would want the associated costs to be shared by a number of users.
Our plan was to offer a solution to customers that are ready for this type of beneficial opportunity. ASPs offer a clear solution at lower cost and management than buying a software solution outright. It has been a slow process in Internet time, but ten years in conventional time is nothing.
The issue is with core competency. When we go to IT Departments, we may seem like a threat to them initially, but they soon realize that we are actually their best friend. We take items that are considered grunt work off their plate and provide it in an automated self-service solution. This dramatically reduces their workload and allows them to focus on their core competency.
They also are afraid of losing control. We recognized that issue from the beginning and offer a solution where they are 100% in control. They can manage the solution to fit their needs exactly and this allows them to have full control.
Running any ROI analysis shows customers that there is no comparison on cost. We pride ourselves on the fact that we are a flexible company based upon automation. We charge $0.10 per user per day and this effectively takes price out of the consideration process. It is almost a non-issue at $0.10 per user per day.
To be successful, I would expect that you need to have a critical mass of users in order to spread your costs enough to be profitable.
We can’t announce our total number of users due to our OEM partnerships, but you can rest assured that our number of users is easily with 6 figures.
Except for a couple of years in the heat of the dotcom rage we have been profitable. We have run our company with a focus on profitability since 1995 so that we haven’t had to look for Venture Funding. Our focus on profitability has allowed us to develop a successful product and put all of our resources into its development.
The economy in America is driven by small businesses. These small businesses need a number of IT services because they don’t have the resources they need to build the services in-house. Our product is directly targeting these businesses. As more and more small businesses launch, the market opportunity for our service only grows.
Eventually, these businesses will be looking to purchase integrated services from one provider. This whole convergence will be happening over the next few years. Companies are no longer to piecemeal these services and want to work with one service provider.
The operating system as we know it today will become less and less important and most likely non-existent. The operating system becomes the browser. In the next 3 to 5 years it will become irrelevant what operating system a person is using for their desktop as long as they have a browser and net connection.
That is correct, we are looking to develop certain applications in house and we are looking to partner with other providers for larger solutions. Our focus will be on developing in-house those features that fit with our core competency, and partnering with providers who solutions do not.
There are many things that are easy to compare such as price and suite of services. One thing that is not easy to compare is the level of service and support provided. We have designed our solution to scale with our customer base. All of our services work together seamlessly. We are also the Internet’s best kept secret, because a lot of people use our services but under a different name.
I look for three things; team work, thoroughness and dependability. They can always be taught exactly what language we develop in. If they don’t meet my three criteria then I don’t think they will do well here at InfoStreet. Personality and attitude are more valuable for success than knowledge and aptitude.
People need to understand that creating a company is similar to following a recipe. You may have the best steak in the world, but a little too much salt or pepper could ruin it. You have to put a lot of factors together. Having a good idea or a lot of intellect is not enough. You have to hire smart people to create a good team and most importantly you need to listen to them.
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