Q&A: No Growing Pains For Axcient's Moore

While it's been a tough year for IT companies as a whole, Axcient continues to buck the trend.

If the Mountain View, Calif.-based company has any issues, it might be trying to keep up with the growth. Axcient has increased its number of employees by 50 percent this year, added more than 200 new features to its platform for cloud recovery of business data, applications and systems and more than doubled the number of installations through solution providers and managed service providers.

In addition, the company was a finalist for the XCellence in Cloud Implementation at UBM Channel's XChange 2012 conference held in August in Dallas.

[Related: Follow The Money: 10 Recent Tech VC Investments To Watch In September ]

CEO Justin Moore spoke recently to CRN's Scott Campbell about Axcient's growth, future plans and how its partners should be focusing on business value and technology to win customers. The following are excerpts from the conversation:

Axcient has been on a significant growth curve this year. What's been the key to the success and what do you need to keep growing?

We're growing at a ridiculous clip at every front. Revenue growth, we're almost 2,500 percent growth in three years. Employees, units installed are growing. We have an 83-percent win rate against competition. We're growing on every single front.

The message is the next generation and next evolution of information management and data protection is here. We don't talk about backup; we talk about our mission to deliver a platform to businesses that eliminates data loss and IT downtime. Fundamentally, what do businesses want? They want to eliminate risk, maximize productivity and eliminate things that impact that, and they want to reduce costs and complexity. That's what we've built.

Will it be harder for Axcient to continue this growth rate in an increasingly competitive market? Where do you go from here?

There's massive market share by a few incumbents: HP, EMC, Symantec, CA [Technologies]. They have a massive entrenchment. All the other players, and there's hundreds more, have all missed the market in the race to cloud storage. They treat [cloud storage] as a glorified NAS. That's not where the cloud is powerful. That's where we try to be disruptive. Why was Salesforce.com disruptive when they took on Siebel [Systems]? Why is ServiceNow disruptive in the service industry? Why are SuccessFactors and Workday disruptive in the HR industry? Why are all these people in different disparate fields successful?

The key common thread is they build platforms. They integrate with other providers and have long term vision. They spend tons of R&D. They start with one and grow a one-to-many model. Our vision of the world is we are building the primary information management platform for business. We eliminate the risk of losing any information on any device, eliminating any IT downtime, not just for data but applications and systems.

Data is going to double between now and 2015 and solutions today don't meet the needs of businesses. We feel we can fill that gap and change the way 20 million SMBs in North America and Europe think about data management, archiving, disaster recovery.

NEXT: Axcient Partners Evolving As Axcient grows and broadens, what has happened to your partner base? How are they as a group changing too?

We have small managed service provider shops that get up and running, and we have some of the largest MSPs in the industry that have chosen Axcient as their platform of choice. We are also seeing more traction in VAR market.

I am not a believer of everything is going to MSPs. There's a lot of hype around MSPs and the VAR will go out of business. That's proven to be untrue. VARs want to augment with services and provide better business value to customers. When you provide meaningful, tangible value to customers, you will be successful. You have to be more of a value provider to business, not just hardware and software and billable services. Be that point of knowledge for a business.

You might be selling this hardware for a virtualization project, but you can also say let me introduce you to [Axcient] where you will never have downtime. We're seeing traction in the VAR market. They're pulling us into midmarket customers. That profile is expanding.

How are your distributor relationships with Synnex and Ingram Micro going? Any plans on adding more distributors any time soon?

We're very happy with those relationships. We're starting to see traction. That said, we're always looking to expand partnerships. We have nothing specifically in mind but we're constantly looking to accelerate the growth of business. We want to change the industry, change the way people think about protecting systems. We continue to evaluate different paths to do that, and different distribution relationships will play a part in that. But, that's not to say we're not very happy with Ingram and Synnex.

There's no shortage of companies that want to figure out a way to partner with us. The key to success is focus and execution and choosing which opportunities make sense.

As your number of partners has grown, how have you had to change internally, in terms of creating more tiers for your partner program or more benefits for those willing to make a more significant investment?

We launched in Q2 a tiered partner program with Elite, Premier and Regular partners. With that comes a number of benefits. Elite partners get the best support, SLAs, more MDF, training, dedicated account and marketing managers. Premier [partners] get similar [benefits] but not at the same scale. What we've created is working extremely well. We've seen phenomenal results, with two quarters in place.

NEXT: Don't Be The Low-Cost Leader In those two quarters, from which group are you seeing the most growth?

The number of partners that has reached Elite has doubled that since the program began. We see partners investing to get into the top tier. We've seen Premier grow by more than 50 percent. I think about 70 percent of our partner program revenue has been generated by those two groups.

We also are there trying to come up with a strategy to progress Regular partners. One thing I don't believe, which you see at traditional companies, is every company trying to activate 80 percent of their partners and saying they can't do it. I talk to a lot of other channel chiefs who say they have to spend all their time on the top 10 or 20 percent and the rest is trickle. I don't think that's true. With advancements in sales marketing automation and analytics I think there are ways that we can activate the 80 or 90 percent of the channel in a one-to-many fashion that will yield success. We are constantly working on that, and we have some exciting things in the work to launch in the next few quarters that will accelerate that.

What advice do you have for partners in terms of how to position themselves for the future? How do they market business value as opposed to technology?

The advice I give people is they really need to understand their customers. Too many people think of business short term. Have specific goals. What are your growth expectations? Provide meaningful value to people and be a resource and a source of knowledge and expertise. You can build a successful business. You can provide business value. MSPs providing a solution based on cost is a losing battle. It becomes a high-volume, low-margin business. That is not a good recipe for building successful companies.

Look at the Fortune 100 companies. Very, very few, if any, are low-cost commodity leaders. Look at Apple. They are the most successful company, have the largest market [capitalization] in the world. They are definitely not the below-cost leader. You could buy a laptop for a quarter of the price of a Mac. A [tablet] is half the price of an [iPad]. You can get a phone for free from many companies. They deliver value and you feel good when you use it. They service your needs, and it gives you a delightful experience. They have the volume, margins and revenue that outstrips anyone. Think of your business that way. Think of the way you provide solutions rather than provide technologies.

PUBLISHED SEPT. 19, 2012