Moving down market
Persystent Technologies has a new chief executive that is expanding the company's customer base.
Persystent Technologies, a Tampa software maker that helps PCs stay up and running, has a new mission.
It has gone down market, from selling just to large Fortune 100 companies with 4,000 or more PCs to smaller companies with 50 to 1,000 computers.
The reason: More potential customers, some of which Persystent was already selling to. And more consistent revenue.
"It's a wider universe," says Joe Loughry, president and chief executive officer. "When we looked at our customer base, we were closing more deals in the down market space. Many of our customers were between 300 to 500 seats."
Leading the charge is Loughry, a software industry veteran, turnaround executive and self-described "serial CEO," who joined Persystent as chief executive a little more than a year ago in September 2007.
A former General Electric executive, Loughry has also worked with venture capital and investment groups to help improve under-executing companies. Most recently, he was president and CEO of HTE, Inc. an Orlando software company that provides integrated application solutions to local and state governments
"I want to get the company pointed in the right direction," Loughry, 62, says.
His three main goals: Make Persystent stronger, groom a successor and build shareholder value. Although he doesn't have a specific timetable, he says it is likely he may move on in about three years.
Loughry does not plan to radically change the product or expand into other kinds of software.
Persystent's software keeps a PC in a work-ready state. It is especially valuable for customers who need constant connection to vital information, such doctors, nurses and police officers, making crucial life decisions. Persystent is working on version 5 of its software, but has not released it.
Looking at smaller users, Loughry has dropped the product price. Persystent used to sell for about $109 a unit and is now about $50. The company also moved to a subscription model.
Historically software companies have charged a large entry fee, then 10% to 15% a year in licensing and updates. A subscription-based model has lower entry-point prices and a lower continual fee. It has been more successful for Persystent.
In the third quarter, about 80% of its customers signed up as subscription customers for one to three years. That locks in a revenue base.
"We're building more of a recurring revenue stream," Loughry says. "It is more predictable in managing a company. You give up a little cash to do that."
Loughry is also spending money on marketing.
He recently brought on a new chief marketing officer and has engaged Tampa advertising firm PeakBiety to create new branding messages for 2009.
The company trimmed its staff in the past year from 36 to 27, through attrition.
"The company got over its skies," Loughry says. "It was hiring in advance of its success."
What has been the company's biggest recent challenge? Getting the organization to be receptive to going down market. As its business increased, Persystent brought in an inside sales manager. Management worked at getting the mindset changed. The staff was generally receptive.
"Like any organization, it takes the lead from the leader," Loughry says.
Looking ahead, it is thinking of going even further down market to the home office user by around 2010.
- Dave Szymanski