- On-demand: enhance their Appian Anywhere on-demand BPM platform, including the application marketplace.
- Channel and vertical applications: work with the partner ecosystem to build vertical applications in areas where the partners specialize.
- Sales and services: expand geographically, particularly in EMEA and APAC.
- Marketing: invest in targeted brand marketing and improve technology partnerships.
I took part last week in an analyst call with Matt Calkins, Appian’s CEO, and Samir Gulati, VP Marketing, about the announcement. They’ve generated $140M in revenue over the 9 years that they’ve been in business, so the big question is why go for VC now?
Calkins sees this as a way for them to move up the food chain, not just competing with vendors their own size (he mentioned Lombardi and Savvion specifically), but taking on the BPM behemoths like IBM and Oracle. The marketing investment is a big part of this, since you can’t play with the big kids unless you look the part. They’ve doubled their marketing budget and added 15 people to their professional services team, and Calkins stated that “we now have the budget to be the company that we wanted to be”. When I asked if this was the first step on the road to an IPO, he confirmed that they were moving towards that goal.
The VCs that they spoke with were impressed by what they’ve done, coming a bit late to the BPM market but being opportunistic and building a leadership position while still generating significant revenue. $10M doesn’t sound like a lot these days, especially given the ambitious scope of their plans, but they have a reputation for doing good things on a shoestring and hopefully the influx of cash won’t turn their heads. Remember, this is the conservative east coast, not the excesses of the Valley.
In response to a question about the difficulty in moving from selling software licenses to selling on-demand software, Calkins responded that they’re creating a separate Appian Anywhere sales force and developing a sales model that will compensate them based on projected 3-year revenues, which makes it easier to compare the on-demand and enterprise sales teams. They plan to shift to a SaaS “metabolism” for Appian Anywhere, allowing for frequent code releases in the on-demand platform, while only occasionally freezing that code base for the Enterprise edition. This keeps the two versions in sync, but provides a functionality advantage to the Appian Anywhere customers, who will see the new features earlier.