Ben Kuo: Tell us a little bit about Day?
Santi Pierini: We're a content management company, headquartered in Switzerland and dual headquartered in Newport Beach. Our sales and marketing, finance, and support infrastructure is run out of Newport. Our claim to fame is Swiss banking, building websites for Swiss banks and insurance companies. We built highly secure, globalized, and structured sources of information, and that basis has allowed us to branch out into building sites for well known brands. For example, McDonalds runs their intranet, extranet, and Internet on Day Software; Intercontinental Hotels Group, which runs the Holiday Inn chain and Intercontinental, does all their online bookings through Day. Most large auto manufacturers, including Audi, Volkswagen, and Mitsubishi also run on Day. Recently, we've also had lots of success in the media and entertainment industries. On the Orange County side, we have a strong partnership with FileNet, which just announced an acquisition by IBM. FileNet resells our Communique product as FileNet Web Manager. Being co-located in Orange County has been a huge benefit, for joint development, marketing, and sales. For completeness, we also have similar OEM partnerships with FAST, one of the leading search engine companies, and BEA Systems. Both of those companies bundle our technology with their products.
Ben Kuo: So why the choice to locate your headquarters here in Southern California?
Santi Pierini: The answer to that one is more obvious than not. The founders wanted to make progress in America, and used the Israeli/SAP model, where they keep the core development in their native countries, but moved into the U.S. At the time, the Silicon Valley downturn had already begun, and it was not as attractive, and the founders saw lots of benefits to being in Southern California--the weather, being around lots of great technology companies--like Kingston, Broadcom, Jazz Semiconductor, all the hardware manufacturers, as well as companies like FileNet. It was good timing and made sense as lots of the executives were Southern California based. It's been a great thing for us not being in the Bay Area, which gives us a bit of autonomy but where we are close enough to be there in two hours.
Ben Kuo: How long has Day been in Orange County?
Santi Pierini: We've been in the U.S. since around 1999, when we first opened in Newport Beach.
Ben Kuo: So give me the story on your move into open source?
Santi Pierini: Underneath our software, which runs web site and makes content available, there are lots of applications and database that need to be accessed. For example, when we were building the McDonalds extranet, they needed real estate data so that franchisees could see property information, and also needed marketing data on the next marketing campaigns from Disney and Pixar and which ads need to run. These all come from different systems, from Oracle, to FileNet, to Documentum, to Disney's own digital asset management systems. We have technology called the Content Bus that allows those connections to happen, and get that information disseminated to the right audience. Four years ago, our CTO took that Content Bus to the Java Community Process, the industry board that certifies new standards. Companies like IBM, Oracle, and Bea joined us on that standards board, on the technology called JSR 170. That's the internal project name, but has also become a brand--if you mention JSR 170 to an IT shop they know what you are talking about. It's a standard that all software companies and content companies can use to share information. The standard provides all of the necessary services, security and access controls, search capabilities, and core functions that allow information to be shared. We owned the IP, but made a reference application publicly available to the Java community and donated code to the Apache Software Foundation. Roy Fielding who was very early on working with Tim Berners Lee, and is author of the HTTP protocol, is our very well known and respected Chief Scientist. He was also a founder of the Apache Software Foundation. It was a natural fit for us to pursue the standards agenda and open source. The project is now at Apache.org known as Jackrabbit. This is one of the first occurrences where they took a proprietary technology--our Content Bus--and made it better through a standards board, which was then donated as code to Apache. What that allows us to do, is to continually get better because open source developers are constantly checking in and out fixes and enhancements, testing code, and certifying that code along with Apache--and it keeps getting better and better. It's available for our international software companies to build on. Our whole goal is adoption propagation of the standard, a strategy that has worked quite well.
Ben Kuo: So how do companies buy your product?
Santi Pierini: For a small company, we definitely have a lot of channels. We use a direct sales model for our content management products, and have a regular sales and marketing team. Our infrastructure products, which are based on the standard--Java Content Repository--lots of our software partners are OEM-ing and embedding. With FAST, for example, we have an indirect channel where they embed it into their solution. The third tier is open source distribution. We're not really like Red Hat or JBoss, we are not just taking open source and repackaging it and providing service and maintenance--we're on the other end of it. Folks that know that Day led the project, and we offer them an easy path to create applications in a department around Jackrabbit. However, when companies go to deploy projects, with most jobs they are not comfortable using pure open source code for mission critical applications. That's why they would turn to Red Hat for Linux or JBoss for an application server--and that's why they turn to Day Software for our content repository. We also allow developers to develop code and then license our software. We have the same code base, but offer more features, functions, and maintenance than pure open source.
Ben Kuo: I often run into software companies nowadays who tell me that the enterprise software space has been difficult and slow. What's your view on the market?
Santi Pierini: Because we're offering something really unique, we have seen quite a bit of growth. Our 2004 to 2005 revenue saw something like a 30 percent increase, and our product license revenues grew almost 80 percent. We're not a large company, but the fact we're able to grow our license revenues by 80% indicates that our sliver of the market has done very well. Gartner predicts in our core content management market, we will have anywhere from nine to 14% of reasonably health growth this year. Our hyper growth opportunities are around the content infrastructure, back end systems, and databases. Last year, we saw good strong growth, and our future, and the future of what makes us special is around that content infrastructure.
Ben Kuo: Thanks for the interview!