CenterBeam
Ottowa Business Journal, 1/12/03: Francis energized by Silicon Valley startup
By Ottawa Business Journal Staff
One year after delivering Accelio Corp. through a tense hostile takeover battle, Kevin Francis is thinking sunny thoughts again.
Since last May, Francis has been working as the president and chief executive officer of Santa Clara Calif.-based startup CenterBeam Inc. Besides the warm and sunny weather, Francis is also basking in a number of other changes that have taken him as far away from his Accelio experience as one could imagine.
CenterBeam is a young technology firm that enjoys the financial backing of four VC firms, including Apax Partners, as well as tech giants like EDS Corp., Dell Computer Corp. and Microsoft Corp. In October 2000, the company landed US$115 million in second round financing. Since its inception in 1999, the company has attracted US$200 million in financing. It employs 175 people.
With strong funding in place and a unique approach to IT outsourcing, Francis is talking about plans similar to ones he implemented at the old Jetform Corp. — overseas expansion, new market opportunities and revenue growth. Francis also doesn't hesitate to say that a public offering is the company's goal when market conditions permit.
"This is radically different," he says. "I get to spend more time with customers rather than having to do investor presentations. Frankly, it's quite enjoyable being private at this point."
Since his appointment as CenterBeam's CEO, Francis has expanded the company's market reach into Canada and plans to focus on overseas markets — Europe in particular — as a next step.
CenterBeam's approach to IT outsourcing work differs from the more traditional view of the field. Rather than providing employees to fix and maintain a customer's servers, firewalls or network connections, CenterBeam offers a remote service, similar to an application service provider (ASP) model.
The company also prices its services based on the number of employees in a client's company. Since no workers are dispatched to clients and no fixed minimum charge is applied, CenterBeam claims that it offers a significant cost advantage over other IT outsourcing companies.
"Our approach it 100 per cent opposite," Francis says. "We have taken as much of the people aspect out of that part of the solution. We have a fixed rate per seat so our revenues grow along with our customer."
By all accounts, things are going well for Francis. In contrast to his final days at Accelio, Francis is more relaxed and enjoying the process of building a company.
Francis' journey to Silicon Valley began shortly after he negotiated a last-minute concession from Adobe System' Bruce Chizen that won Accelio's shareholders a $114-million price tag. Shortly after the takeover was completed, Francis was considering taking a job with a firm in Connecticut when Accelio's chairman of the board, Avis Ostrovsky, presented him with the CenterBeam opportunity. Ostrovsky is a board member with the California firm. After meeting with company officials, Francis says he was immediately impressed and took the job.
"I called (my wife) and said, 'It looks like we're moving to California,'" he says.
Despite his trademark affable nature, Francis still talks passionately about his final days at Accelio and his hand in striking a deal with Adobe.
"Obviously, I look back with a degree of satisfaction," he says. "Clearly, one would prefer not to have that (situation). We didn't invite being on that treadmill, but we served shareholders well. In the end, that's what it's all about."
Peter Liebel, the executive director of CIBC World Markets' local technology investment unit, says the deal was a good example of what Ottawa business leaders can achieve. "I definitely think it was a successful outcome considering when it was started and the time frame," he says.
Still, Paul Bradley, a software analyst with Dundee Securities, says the acquisition has been met with ambivalence from Bay Street.
"It seems to have had a neutral impact, to be quite honest," he says. "In the first quarter after the acquisition, Adobe alluded to issues related to the acquisition. But it's hard to say since investors lost interest when Accelio was acquired."
Francis still thinks that the Ontario Securities Commission (OSC) rules should be changed, making it more fair for companies and their shareholders to defend themselves from hostile takeovers.
In his final weeks at Accelio, Francis lobbied hard to have the OSC rules changed to allow more transparency for shareholders when it came to situations like that of Accelio. In the end, no changes were made.
"Companies should be lobbying hard so those regulations should be updated," he says. In particular, he thinks it's unfair that a company can own up to a 20-per-cent stake in another company without having to make it public knowledge. In the United States, the threshold is 10 per cent.
Francis' zeal for Accelio and his crusade to change OSC rules could be chalked up to his "passionate" feelings for Canada. He regularly reads stories from Ottawa newspapers online, but he is quick to point out the divergence between Ottawa and Silicon Valley.
"One of the differences is that Silicon Valley has been more negatively hit than Ottawa, but there is more a sense of bottom and a sense of optimism here," he says. "I didn't get that same sense when I read a story about Ottawa VC."
Francis says Ottawa should be optimistic.
"I believe Canada has every reason to believe it can expand on a global scale."
[source]
Outsourcing
TechWeb, 1/10/03: The High Price Of Overseas Outsourcing
By Larry Lange
IT pros take note: Those executive conference rooms you pass on the way to get a cup of coffee are humming with talk of a hot new trend. And while it might save your bosses money, it could cost you your job.
If something about our high-tech industry has you mad as hell, let us know. Who knows? If it's juicy enough, it may just be a perfect Mad As Hell column.
The idea? Ship high-tech work abroad to countries like Mexico, India, Singapore, the Philippines, Russia, and China. Sure, offshore outsourcing is already a big business—Gartner says the market in North America will grow to $160 billion in 2005, up from $101 billion in 2000-but it only stands to get bigger.
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IT Management
Giga, 1/7/03: Agentless Still Falls Short of Agent-Based Monitoring for Server Management
Jean-Pierre Garbani
Distributed agents have been the foundation of infrastructure monitoring for more than a decade. They represent a major portion of the cost associated with deploying an enterprise management solution. Agentless products seem to have an upper hand, but for the time being the benefits do not outweigh the lack of data granularity and the scalability limits of the solution.
[more]
Giga, 1/9/03: Outlook for 2003: Directory Services
For 2003, organizations should concentrate efforts on the business justification and return on investment (ROI) for building a directory service rather than the technology itself and on the integration of directory services with business processes. Market events in 2003 will mostly serve to highlight the coming of age of directories as technology and business infrastructure.
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