BladeLogic Interview

by mike on November 28, 2008

bladelogic

I had the pleasure of recently speaking with fellow Rutgers alum Dev Ittycheria. Dev is President of the $1.2B Enterprise Service Management business and a member of the executive management team at BMC Software. He was formerly CEO and co-founder of BladeLogic, a data center automation software company acquired by BMC Software for $800M earlier this year. Dev is a serial entrepreneur and was kind enough to share some of his background and experiences with me. Here are some key points from our discussion.

Entrepreneur vs. VC

Dev has the unique perspective of having spent time on both sides of the proverbial startup fence – VC and Entrepreneur. As an entrepreneur, he co-founded and was CEO of Applica, one of the first venture-backed application services companies (a precursor to what people call cloud computing), which was acquired by Breakaway Solutions. Dev also spent time as an Entrepreneur-In-Residence (EIR) at Bessemer Venture Partners. He joined Bessemer in 2001 after taking Breakaway public a few years earlier. As an EIR, he had three options – start another company, work on new investment opportunities for the firm, or lead an existing portfolio company. He chose starting a new venture and teamed up with a former colleague Vijay Manwani, also an EIR at Battery Ventures. They raised $6M from Bessemer and Battery in September 2001, five days before 9/11, and launched BladeLogic. The rest is history.

Key Success Factors

BladeLogic was a success on many different levels, but there were a few that stand out. First, focused execution was critical. BladeLogic was very focused on a particular segment of infrastructure software – the server change and configuration management market. Next was a rapid and iterative development process that allowed the company to obtain customer input early and often. That was critical to deeply understanding customers’ needs and problems and making sure their products solved the most pressing problems. The last and arguably most important was the sales team. BladeLogic decided to go to market via a direct sales channel and spent a great deal of time hiring and developing the best sales force they could. A strong sales force is a competitive advantage unto itself.

Software vs. Services

As a software product company it’s easy to fall into the services trap. One-off consulting engagements can improve your short-term cash flow, but can distract the company from its overall strategy. This becomes particularly challenging as you sell to large customers who typically demand “whole solutions” and pull small software companies in many directions. At BladeLogic, the key was a disciplined product management strategy that never lost sight of the company’s strategic goals.

Advice for Entrepreneurs

These economic times are extremely challenging for all companies, particularly software startups. If you are an entrepreneur or launching a new company in this environment focus on doing three things:

  1. Solve a genuine pain point for the customer. There is a big difference between building products that are “pain killers” versus “vitamins”. With IT budgets tightening vitamins won’t find dollars. You’ll find out rather quickly which camp you fall into.
  2. Work on building a *great* team, not just a good one. If you are an enterprise software company, focus on developing the best sales and development teams possible. These two functions are the engines for driving your business forward and will be extremely important to surviving the downturn.
  3. Build a defensible technology advantage. Your competition, which will be typically larger and better capitalized, will attempt to bankrupt your company by under-pricing their equivalent products. If you have a true defensible technology advantage that customers care about that strategy simply won’t work. Furthermore, make sure your product roadmap focuses on building features that customers will pay for, not something they wish for, but will not spend any more money on.
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