Blog of Roger Greene, CEO

The question we hear most often is how we came up with the name Ipswitch. As with many names, luck and inspiration played an important role. At the very beginning, 1990 and pre-incorporation, I knew I wanted to start a networking company, but hadn’t picked a product strategy. That left things pretty open-ended. I usually find naming companies and products to be painfully difficult. After months of not coming up with any names I liked, I decided to buy some time and pick a placeholder name until we were ready to release our first product. I didn’t want to limit us with this first name, so I chose ‘Context Unlimited’, to be taken literally and also as a pun on companies that add ‘Limited’ to their name.

Then one day Dan Lanciani – the developer of our first generation of products – was driving by a highway exit for the town of Ipswich. Dan looked up at the exit sign and the name was born. We loved it because it both honored Massachusetts and also was a pun about our first product Catipult, which switched between IP and IPX protocols. We added the ‘t” because Massachusetts would not let us use the name without it. With the advent of the web several years later, that ‘t’ became useful to make our name unique for search engines, at least until IP switches became popular.

P.S. Because of IP switching, some people capitalize and pronounce our name to emphasize that. We only capitalize the initial ‘I’ and pronounce Ipswitch the same way as the town.

I didn’t need to go surfing even once to know that without waves, there would be no ride. You could float, maybe drift, but you wouldn’t go where you wanted. That lesson isn’t so obvious for surfing the software channel, but it is just as true. In the early days, 19 years ago, our products were new, without awareness or pull – not the right fit for the channel. So we started by selling direct, and making it easy for customers to purchase through a reseller if that is what they preferred. We knew we couldn’t reach our entire target market (at that time) of small to medium organizations by ourselves, but we decided we would rather prove ourselves one customer at a time and learn from the experience. As a boot-strapped start up, if we made a big marketing push and missed the mark, we would be risking disaster and could be out of business. So even though the channel was our long term strategy, we did not seek it out. We needed to build a reputation and market demand. That approach kept us growing slowly with a small profit for a few years. Over time, we built up relationships with resellers and distributors and our business through them. We put a lot of thought into establishing and managing channel partnerships. If we pushed too hard for lower discounts, didn’t provide good service, or didn’t have strategic alignment, the channel wouldn’t be motivated. Conversely, if we offered too much, our profits would suffer. It is a delicate balancing act, just like on a surfboard.

Our goals in setting up a channel program were:

1. Make it easy for our customers to buy.  Give them the choice to buy from their partner of choice or buy from us direct at list price.
2. Be channel-friendly, with good margins. Provide more than discounts, with pre-sales technical assistance, product training, deal registration and a partner web portal.
3. Make our sales force appreciate the channel as an extension of themselves. This requires carefully thought-out compensation plans to make them equally happy regardless of where the customer purchases.
4. Clear rules of engagement to encourage the channel to invest and seek out customers, without reason to worry that we would take the business from them.
5. Through all of the above, gain market share and increase profit.

In addition, we strive to communicate and to be responsive and predictable. We try to be clear about our channel philosophy, strategy and tactics and avoid surprises. We expect the same of our partners.

Over the years we and our partners have put a tremendous amount of time, energy and resources into our relationships. As we, our channel partners and our markets evolve and grow, our channel program adapts to meet current needs and make sure our interests continue to align. We pride ourselves on understanding how important the channel is to us and providing a real commitment to our mutual success. We recognized early on that trust is the key to a successful channel program. We are proud that we have earned that trust over these many years.

Just like the ocean, the channel is vast, deep and powerful – a force with great potential that is important to understand and respect.

Please check out our partner pages for Network Management, Secure File Transfer and Messaging to give you a sense for our partner programs.

Last night I checked out a new restaurant called Life Alive in Central Square (Cambridge, Massachusetts). I think they got it right, which I find especially remarkable for their first week. I felt good walking into the place – the layout was nice, and the decor was warm and welcoming. The staff was cheerful, helpful and human. I ordered at the counter – and enjoyed the experience. Then I sat down at a counter at the window which had a row of interesting, thoughtfully selected books for diners to browse while eating. They even have a policy that if you get wrapped up in a book you can give them a $5 deposit and borrow the book. This is a place that wants to make you feel good about being there. I was won over before I had anything to eat. Then the food arrived, and – no surprise – I found it delicious. The whole experience was a welcome contrast  – doing it right takes vision, heart, commitment and operational expertise and I think most restaurants lack one or more.

So how does this apply to software? When thinking about the products we sell, we like to consider the entire customer experience, from talking to a salesperson, to visiting our website, to downloading an evaluation, to installing our software, to calling to ask sales or technical support a question, to making it easy to purchase the way that works best for you – from us, from a reseller, or via e-commerce on our web site, to managing or renewing your service. The software is at the core, but good software without the rest makes for an incomplete and unsatisfying experience. We strive to provide a superior customer experience. Many times we succeed, but we always see room for improvement. We appreciate your comments about how we are doing and suggestions about how we can make your experience better.

While I was waiting for my meal I started an interesting book about founding and managing a private company. I decided to leave it there and resume where I left off when I return for another meal. I’ll write more about the book another time.

Years ago I learned an important lesson from Bart Wendell, CEO coach. At the time, I tended to stay in the office and fill most of my day with ad-hoc meetings and a list of tasks that grew and shrank, but was never fully completed. I was busy and felt productive, but Bart helped me understand that I was missing something important – informal, external communication. No purpose, no agenda, just time spent doing something unstructured outside of the office. Bart said that by spending time on informal, external communication, good CEOs often get their best strategic insights.

For the past few years, the moderator of my CEO group (Melissa Raffoni) has incorporated more informal time into our annual retreat.  This year, we went surfing. I had a blast, because it was new to me, it was a challenge, and with good instruction it was easier than I had expected. I actually managed to stand up for a few seconds a couple of times.

The bottom line, though, is that I spent the afternoon with some smart executives out of our typical environment, which enhanced our subsequent conversations about business.

The summer before business school I worked in Brussels at the Belgian space institute, during which I learned about launching various objects into the upper atmosphere and beyond. The scientists traveled to South America to launch high altitude balloons to study the earth’s atmosphere; when the balloons eventually fell back to earth they would trek through the jungle to find them. It sounded like a fun adventure.

I was reminded of that summer when I learned that the European Columbus laboratory on the International Space Station will be using WS_FTP to securely transfer files between the space station and earth. Even though WS_FTP is used so many ways by so many people, I think it is particularly cool that it will be used for science in space.

Alain Maillet talks to the International Space Station

It is time to move. Our headquarters has been in the same building near Boston for close to ten years. We like the space – good natural light, convenient location, near a bicycle trail, and more. But we need more room, and were fortunate to find a nice building right around the corner. An added plus is that we get to design the space. We decided not to do a full Google with free gourmet food – we aren’t large enough. I also thought about SASS, which has an impressive campus with day care, medical care and more in North Carolina. I would like to move in that direction, but again, they are a big company.

We look for ways to build community, and designing our new office seemed like a wonderful opportunity to do that in a creative way. Since in homes people often feel most comfortable in the kitchen, I wondered if we could reproduce that at Ipswitch. (Check out this song – I love the pop music from the early 80’s.) The kitchen is the hearth, a warm and comfortable place to gather while food is prepared and eaten.

We would like to create that feeling at Ipswitch, so we are building a nice kitchen to encourage employees, customers, partners and guests to cook together in small groups. We think that gathering around preparing and eating food will make for better relationships and a stronger Ipswitch.

Part of our mission is to eliminate complexity for IT departments by taking what is possible and making it practical. It turns out that in software that is very difficult to do. In the 90′s, we targeted small and medium sized businesses, for whom IT and networking were quickly becoming critical to the bottom line. These businesses had tight budgets, small staffs and high expectations. The last thing they had time or money for was a complex enterprise solution, one that required large teams of people to evaluate, implement and maintain. In many cases, enterprise software was so complex that a customer would be lucky to have even one employee who knew how to use it. (It was for that very reason that WhatsUp Gold was born.)

Small businesses couldn’t afford and didn’t want enterprise software; if it was the only alternative, they did without. Back then, enterprise software was like an oil tanker – when you got it on course it could get you where you wanted to go, but making changes took a huge effort and a very long time. There were many customizations and improvements that just weren’t possible – you couldn’t get there from here.

So we created products that didn’t require a visit, or often even a conversation with us. We made it easy to download a trial copy. We worked hard to solve real problems, eliminate complexity and make life easier for IT departments. And small businesses who had been doing without found an answer – products from Ipswitch and a few other companies like us who were working to reduce the cost of using IT software.

We were thankful that enterprise software companies were bogged down in their bureaucracy and vast, unmanageable code – it created opportunity for us and other new companies who looked at the issue a different way. We asked how we could meet IT users’ needs in ways that didn’t require long sales cycles and large teams to sell and support. We figured if we did that, evaluating, implementing and using our products would be much easier for customers. We could focus on producing software and keep our sales, marketing and support departments at a manageable size. We could grow faster and more profitably.

Enterprise software companies took a different and easier approach to wooing small businesses – they removed features from their enterprise products, slapped on a new name and announced their small business version. But software doesn’t work that way. Eliminating functionality from a complex product doesn’t make it simple, it just makes it less functional. To make a product simple, you must start with an understanding of the customer’s needs and design a new way of addressing their needs that starts out simple!

Things have changed since the 90′s. Enterprise IT departments have felt the budget crunch; expectations remain high, with smaller budgets for staff, equipment and software. The result is that even enterprises have a hard time justifying and using enterprise software. Something has to change, and that change has started. Emerging enterprise vendors have adopted our approach of making it easier to evaluate, purchase and use software by addressing real customer needs and enhancing the customer experience at every stage. Legacy enterprise software continues to take a beating, because it takes vast amounts of energy to even begin to change course for an enterprise software tanker, and dramatic change or simplification is not practical or even possible.

As Ipswitch adds products, whether by development or acquisition, we keep this in mind. If starting from scratch, we use small teams with a deep knowledge of customer needs, and ask them to focus on customer experience. When looking for companies to become part of Ipswitch, good technology is a requirement, but most important is the people – do they have an entrepreneurial spirit? Do they thrive with limited resources? Are they creative? Do they focus on customer satisfaction? Are they passionate about quality? Do they work well in teams? By asking these questions, we have been fortunate to find four exceptional companies to join Ipswitch.

Because of the markets we are in and the ways the economy has shaped them, these days we sell more often to enterprise customers, not just to departments, which we have been doing for years, but for enterprise-scale needs. This has been true for both our network management division and especially our file transfer division.

In the case of network management, we have expanded our core WhatsUp Gold product family in a modular way that provides important enterprise functionality as needed, all designed with the same objectives – keep it simple to learn and use and make sure it solves real problems. We will keep expanding the range and depth of the WhatsUp Gold family to address more of the network management space. For WhatsUp Gold, medium businesses have been the principal driver, because they are large enough to have networks big enough to require management. Medium size companies often have networks as complex as enterprises these days, making WhatsUp Gold a fit for many larger companies.

In the case of secure file transfer, the market need has been driven by the enterprise; for bigger companies, data security has become paramount; for smaller companies it is more of a second or third tier issue. Enterprises need solutions now. We have a range of secure file transfer products; at the high end we are squarely in the enterprise space, where we apply the same philosophy – to win with performance, quality and by reducing the customer’s time to value and cost of ownership. We will never compete by having armies of sales and support engineers; we will succeed by making sure these armies are not needed. Instead, we will have highly skilled teams available for the times when enterprise customers need us for intensive assistance. If that happens too often, we will know something is broken; and we will fix it by applying what we learn from customers to make our software easier to learn and use. We will make it so customers need to call us less and can shift their attention to other pressing matters; in IT, there is never a shortage.

We have expanded beyond the small and medium business market, which we still consider our core strength.  Today, we also sell enterprise software to enterprises, but not by following the legacy vendors’ playbook of 20 years ago. The world has changed, and the lessons we have learned by selling to smaller businesses have served us well as enterprises discover our software.

19 years ago this past Sunday, I started Ipswitch with aspirations to have a real impact on IT, on the world, and how software companies achieve and measure success. I wanted to create an environment that would attract smart, ambitious people who share our values, which emphasize honesty, integrity and treating people with respect. I see our impact on IT every day in our many thousands of customers whose lives are made more productive by our software. As our iCare community program grows each year, I see more and more impact on volunteers and the communities that benefit from iCare. We fund iCare with 5% of profits. And I think we have shown that taking a longer term perspective on growth has allowed us to become a significant force in IT software while retaining control over our future. Change has accelerated, but it is still more important to identify long term trends than to react quickly.

In 1991, as we got started, it was much more about the potential of the Internet than the market for our initial products. I wanted to get going with a product – any product – that would establish us in the market. Once established, I thought we would be in a much better position to understand IT users’ needs and better able to decide what products to introduce.  And although that is in essence what happened, serendipity played a big role – Dan Lanciani pointed me to John Junod and the software that became WS_FTP, IMail and WhatsUp Gold.

During these 19 years, we have personally had some ups and downs. At the beginning, I was looking for a challenge, but four years into the tunnel and seeing no light, I considered giving up.  I decided to continue not because I knew there was a bright future, but because I hadn’t quite given it a complete effort and I felt that if I didn’t persist for a while longer I would regret it.  That’s when I met John and we found a path towards success.

The late 90′s were a period of excitement and fast growth. Then we slowed in the early 2000′s. It took several years for me to recognize that our prior success was a result of how we managed the company when we were much smaller, and that that approach no longer worked in a larger company. The strategic change I am most proud of is the one that we as a senior management team talked through for over a year before we reorganized Ipswitch into divisions almost three years ago. That one decision has had many profoundly positive effects that continue to this day. Without it, we would not have been prepared to expand by finding other companies for whom it made sense to become part of Ipswitch. We would not have been able to carry on so much parallel activity; we would not have the depth and breadth of management we do; and we would not have the range or quality of software solutions we do today.

Today, we are a major force in two big markets – secure file transfer and network management, with the exciting potential to increase our share and clout in both.  With our third division – messaging – we are in a competitive market where we stand out as a high quality product with superb support. Our potential exists because of our people, our customer base, our reputation, our brands and our technology. Our 19 years of continuous profit and growth, our stronger-than-ever market position and potential – this is all cause for giving thanks – to our customers, without whom we could not understand our markets or produce software for them; to our partners, who let us focus on what we are good at and rely on what they are good at; and to our employees, who inspire me and each other to continue to pursue our vision of building a software company that makes a difference for IT, for the world and sets an example for how software companies can achieve success.

Roger