In-Depth

Enterprise Ireland: Putting Microsoft ISVs on the Map

• October 23, 2011

Software development companies in the United States think it's tough finding new customers. Rightly so, but consider this: In the United States there are approximately 30 million businesses that Microsoft partners can target to build their client base. In Ireland, where there are approximately 425,000 businesses, it takes a much bigger piece of the market to support a business. For the specialized solutions of an ISV, no matter how brilliant the software, the target market universe doesn't have many zeros.

So how does an Irish ISV in a small market expand its horizons? With the help of a very well connected coach and mentor.

Supporting Startup Growth Through Market Reach
Enterprise Ireland (EI) gives small Irish software development companies a fighting chance ... and then some. As the government agency responsible for the development of Irish enterprises in world markets, EI's mission is to accelerate the growth of world-class Irish companies by helping them in their sales, partnering and VC activities. Nick Marmion, senior vice president of Business Development Software & Services for EI, describes the mission of EI: "Our goal is to effectively channel aid, including assistance with R&D, grants and capability building, through one agency."

The central focus of the EI programs is the creation of sustainable jobs in Ireland. According to the 2010 Annual Report, EI client companies created 8,193 new jobs bringing the total number employed by EI companies to 137,241. From the report, "2010 was a year of excellent recovery in the export growth." EI client companies recorded a remarkable 10 percent increase in total export sales and demonstrated their resilience, tenacity and renewed confidence by achieving total export sales of Û13.9 billion (approximately 20 billion U.S. dollars).

One of the member companies that tapped into EI when they were ready to expand is MXSweep, a global provider of Software as a Service (SaaS) Internet Security & Compliance services including e-mail security, content control, business continuity, and encryption for SME, corporate and public sector customers. Marketing exclusively through the channel, MXSweep delivers cloud services through partners such as distributors, value-add resellers, hosters and telecom companies.

Aiden Callaly, vice president of Global Sales for MXSweep, remembers, "About two years ago EI invested in MXSweep, which was a key point in our development to allow us to expand internationally. Now, we're growing very quickly with about 4,000 end users with customers in 19 countries. [We're] opening offices in the U.S. and signing up our first deals in the states."

"Working with EI has been great," Callaly says. "A primary focus is job creation and we will be creating an additional 15 jobs this year in the areas of support and development. We're adding an Ireland-based multilingual outbound call center for partner and distributor support."

Opening Doors to the U.S. Market at the WPC
To help EI ISVs build relationships in the U.S. market, 13 member companies were invited to share the EI booth at this year's Microsoft Worldwide Partner Conference (WPC) in Los Angeles. While the cost of a WPC Expo booth is out of reach for most small ISVs, the opportunity to meet 15,000 potential partners at the WPC provides huge value.

"It's a very positive experience for our ISVs to attend the WPC and other global conferences to reinforce their self-perception," EI's Marmion says. "Individual companies are often surprised by the openness of the partners at the WPC. Finding the Microsoft channel open to conversations can help raise the confidence and ambition of these companies. It's reassuring to see that there's more potential and a broader interest than they may have expected."

One of those 13 companies attending WPC was FlexTime, an ISV providing Web-based time tracking that supports flexible working environments for all types of organizations. "This is the first time that we have come to the WPC. EI encouraged us to come here and it has been very helpful. We are just starting in the U.S. market, so it's good timing for us," Ciaran Rowsome, managing director of FlexTime, says.

"When you're working on building software with Microsoft the technical people have the strongest relationships with Microsoft," Rowsome says. "The business people in the organization don't know as much about Microsoft as they should and the WPC is a great place to build knowledge and relationships. The WPC is the beginning of a network with partners in the U.S."

Jason Keogh, CTO of iQuate, would have been at the WPC anyway, as a finalist for the Microsoft Software Asset Management Innovation Partner of the Year Award, but appreciates the EI sponsorship. "EI provides very practical help to member companies and the WPC this year is an example of that," Keogh notes.

iQuate's discovery platform delivers complete, continual and accurate visibility of highly complex physical, virtual and cloud environments. Verifiably accurate inventory improves the critical business decisions that control costs and mitigate risks.

"One of the things that we did was bring some of our larger partners to the EI 'Meet the Irish' event at WPC -- like Dell, Compucon and PWC," Keogh says. "It helps us build relationships and there are other EI ISV partners that can connect with those larger partners as well. That communion of different companies bringing different partners together is useful for all of us."

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Continuing a Strong Partnership with Microsoft
While this was the first time that EI has sponsored a contingent at the WPC, the relationship with Microsoft spans almost 25 years. Microsoft has played a key role with EI's software clients, encouraging creativity and giving them opportunities to access new markets.

As Aidan Gallagher, CEO of InishTech explains, "InishTech is a spin out from Microsoft. The other founders and I were introduced to Microsoft by EI, which led to the subsequent spin out of Microsoft technology to InishTech. We moved the business over to Ireland but Microsoft is still a partial owner."

InishTech provides software licensing solutions to help software developers package and license to maximize revenue while meeting customer requirements.

Still working closely with Microsoft, InishTech was an early adopter of Windows Azure. "We were chosen for the Azure building blocks program," Gallagher says. "We've moved the operation onto the Azure platform and support Azure licensing. SaaS entitlements need to be managed just like on the on-premises versions, so we support SaaS applications."

EI's Marmion says he's been impressed with how Microsoft builds relationships with the ISV such as iQuate and InishTech and helps them market their solutions into the Microsoft ecosystem.

"In Ireland we have a strong connection with the Bizspark program, and one of the best track records for getting companies into the Bizspark program and building stars," Marmion says. "By bringing companies in under the Ireland banner, we bring more weight than a company trying to do it on their own. We always look for a win-win. What do you want to get out of this and what can we gain together."

Excellence in International Networking
Above all, EI member companies appreciate the international presence of EI. "One of the things that people probably don't appreciate about EI is their global reach. The real value of EI is their network of offices around the globe," MXSweep's Callaly says. "For example, I'm going to Australia next month on an EI-funded trade mission. Working with the guys in the Australia EI office, they're finding the right people for me to see and setting up meetings. When I hit Melbourne for a couple of days, I'm literally hitting the ground running. If I'm in San Francisco, I have access to an EI office there. Same in Germany, working with a great team."

"We're in the cloud world with a primary focus on the SMB space. We're looking at a large market," Callaly continues. "Even as we scale up, the value of the EI relationship continues since scaling to the next level is all about relationships. With EI's global reach, the real value is the network of offices around the globe. EI people have great networking contacts, they do the prep work and find the right people to set up meetings. They've helped us in Germany, Australia and Asia Pacific. To really scale you have to be in the U.S. market -- and we're here six months ahead of what we planned."

[Click on image for larger view.]

Figure 1. The 13 ISVs who attended the Microsoft Worldwide Partner Conference and shared the EI-sponsored booth.

Describing the role of the EI international offices, Marmion says, "Since Ireland is a small insular place, Irish companies have to look externally because the only avenue for growth is for international expansion, especially in tech and finance. At EI, we help connect our members with local buyers in their industry." In his 17 years with EI, Marmion has served in a number of far-reaching offices including Belgium, Dubai, Canada and now the United States.

EI helps the Irish ISVs identify channel partners, end customers and create technology partnerships in markets from Silicon Valley to Amsterdam to Singapore. "Taking a leaf from the American's book as networkers, our staff spends a lot of time building relevant networks where there's a value-add exchange on both sides. We work with embassies and participate in trade events and conferences. We're proactive rather than reactive," notes Marmion.

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Donal Cullen, CEO of Spanish Point Technologies Ltd. adds, "EI really gets it in terms of understanding the challenges of scaling. They really get it in terms of a great set of supports. We have an advisor that we work closely with who brings a lot of value to the business -- helping us build the U.K. and U.S. markets."

Spanish Point Technologies is the developer of LookupPoint 2010, which connects users to business information through Microsoft Office applications including Outlook, Word and Excel. A user can select a business item in any e-mail, document or spread sheet and LookupPoint will display the business information associated with that item quickly and directly without the user having to leave the Microsoft Office environment.

"Ireland is a very small country. We make a lot of noise," Cullen jokes, "but as an economy we're about the size of the Manchester economy -- which isn't that large. The U.S. is a great market for technology and we're making great strides here with EI's help."

"For example, we'll visit the Mountain View office and we'll talk about our plans for the West Coast," Cullen says. "The EI folks in that office will help us filter the plans based on what has worked and not worked before. We learn from their experiences and gain from their connections."

Start-up Funding with Long-Term Support
As well as business development advice and services for their 5,000 client companies, EI holds an equity stake in 1,000 companies identified as High Potential Growth Companies. While EI takes only a 10 percent stake in any one organization, it is a catalyst for investment from other venture capitalists (VCs). The due-diligence process that EI works through with each portfolio company gives other VCs confidence that the organization and potential market has been thoroughly vetted.

"Spanish Point set up in 2005 and in 2007 we won the Worldwide Partner of the Year award in the Information Worker Technology, which was a unique accolade. When we were looking to raise money we had great proof points with the Microsoft award, so we had options," Cullen says. "But when we looked at investors, EI was clearly a good choice for us. They're a great investor to have on board."

And while funding is an obvious benefit to the companies working with EI, it's just the beginning of a long-term commitment to accelerate each member company's potential. As iQuate's Keogh puts it: "Been around for nine years and an EI client for eight of those. We've seen an increase in the value of our relationship in the past year and are actually looking to EI more."

Keogh acknowledges that the funding from EI was critical to iQuate's survival as a start-up, but the firm has matured beyond that stage. "To be honest, the support we're getting from EI is even better now. I don't think it's possible to outgrow. The basic stuff, like the credibility that EI offices provide when we meet with large companies, is great."

One country where iQuate's EI connections recently paid off was Japan. "Our EI development advisor is Anne Lannigan and she had spent quite a few years in Japan. She was able to coach us on some cultural issues to help us handle the opportunity better. We wouldn't have been as successful without her," says Keogh.

Spanish Point's Cullen also finds the EI relationship continues to grow, including his participation in this year's Accelerator Road Programme. Twenty-six CEOs gather six times during the year to discuss how they're dealing with growth and the challenges of scaling the business. The value of meeting in a non-competitive environment with other CEOs dealing with similar problems to brainstorm is tremendous.

Lessons Learned: The Value of Relationships
The story of Enterprise Ireland provides several valuable lessons for ISVs, government agencies, software publishers and others that have a vested interest in supporting the success of small software developers. Whether the desired returns are financial, job creation or building a software ecosystem, finding the best combination of support mechanisms for growing companies is challenging. Based on the conversations we had with the member companies, EI seems to have succeeded.

• Investment is just the beginning: To become an EI high-growth potential company, you have to prove out your idea and business model to a high degree. Once that challenge has been met, building relationships is the focus.
  
  
• Relationships are king: It's not what you know, but who you know. The EI global offices focus on building relationships that extend beyond the organization. Reaching into the business community as an active participant opens doors for all EI companies.
  
  
• Network building opportunities: EI proactively identifies and sponsors appropriate trade shows, like the WPC, that member companies couldn't afford on their own. In-person events provide unparalleled opportunities for small companies to build relationships with potential partners.
  
  
• Opportunities for cross pollination: EI opens opportunities for collaboration and cross pollination in a non-competitive environment.
  
  
• Accessibility: Often mentioned is the easy access of EI personnel to member companies.

As InishTech's Gallagher succinctly summarizes, "EI was the catalyst that brought the founders and Microsoft together. Secondly, they are investors in the company. More importantly in the international arena, they have given us contacts around the world. We started with six people but we were able to use EI offices as our own so we had offices across the globe. Every EI office around the world is a hub, so if you're a small Irish company EI allows you to expand your business in other regions."