Moving Forward With Lessons Learned
For the rest of the March 2002 issue of CRM magazine please click here
Like most techies, Gaurav Dhillon more than just fiddled with video games as a 13-year-old. By then he already knew how to program and that technology would be a part of his life.
These days he lives and breathes technology as the CEO of Informatica, a provider of enterprise analytics software. He is not afraid to say he has learned some tough lessons in steering Informatica through growth and the potholes of what was the dot-com economy.
Dhillon and Diaz Nesamoney, president and COO, started Informatica in 1993 when they pooled their knowledge from their jobs at Unisys Corp. and sterling Software, to create software that would cut through layers of data. "There was a huge amount of data and no one was focusing on the analytical component of running their businesses," Dhillon says.
In the "old days" the art of what Informatica was doing was called data warehousing. These days the term analytics and its tie to CRM are increasingly becoming an important synergistic solution.
Dhillon admits he was starry-eyed during the dot-com go-go years. And when he took his company public in 1999, buying into the hype, Informatica built its operating plan around the growth of the Internet economy with a hiring and office opening binge.
Informatica became hot when analytics took center stage as companies used that technology to slice data to understand more about customers' online buying patterns, retention, and loyalty.
But like most companies, the dot-com fireball burned Dhillon. The organization took a $12.1 million restructuring charge in the third quarter of last year to cover costs associated with the consolidation of four offices and the relocation to its current Redwood City, Calif., location.
"We built an operating model that had a resemblance to the market around it and it turned out we were wrong," Dhillon says. "I take the blame for that. The economy was not able to sustain the growth we had when we grew 48 percent year over year."
Looking at more sober expectations, the company expects its fiscal 2002 to garner between $225 million to $235 million in revenue. Dhillon says hyper-growth taught him lessons about cash flow, managing costs, and business basics. "We learned looking back at those years that it is a return to basics where software is sold and not bought," he says.
Undeterred, Dhillon is looking to carve out a bigger piece of the analytics pie with the latest release of Informatica Applications 5, which uses the company's Web-based Analytics Delivery Platform.
With some tough lessons under his belt, Dhillon knows that analytics is not just a fad, but is here to stay. "Certainly, analytics is coming of age. It is much more than a must-have," he says. "In hurricanes, even pigs fly. But when it comes to getting a good compass to see your data, you need good analytics."
Name: Gaurav Dhillon
Title: CEO, Informatica, Redwood City, Calif.
Education: B.S., electrical engineering, Punjab University in India
Biggest Career Blunder: Buying into the hype of the dot-com economy
Most Recent Book Read: Jack Welch's straight From the Gut (the European edition of Jack)
Favorite Sport: Soccer
Sponsored By: Informatica