Intronis, the cloud-based backup company focused on MSPs and VARs, has named SaaS veteran Rick Faulk as its new CEO. The move comes after Intronis made major sales team cuts under Interim CEO Jay Bolgatz a few weeks ago. However, Faulk says Intronis stands on firm financial ground, has plenty of cash, and is poised for growth. So where does Intronis go from here? It's too early to say for sure. But I suspect the strategy will be similar to long-term moves at Autotask, the PSA specialist serving MSPs. Here's why, plus some timely thoughts from Faulk and Bolgatz.
First, the background. Faulk's track record includes:
- More than 30 years of leadership experience in technology sales, marketing and operations.
- A keen focus on SaaS business models in the SMB market, and the IT channel.
- Experience building and managing teams and businesses ranging from startups to $500 million public companies.
- CEO positions at Landslide Technologies (a SaaS-based CRM specialist that j2 Global acquired in 2011), Mzinga (business social software solutions) and Intranets.com (acquired by WebEx in 2005). Faulk also held key posts at Lotus and PictureTel.
Inflection PointFaulk arrives at Intronis during a critical time for the company. The overall backup and disaster recovery market is growing but the rising tide is not lifting all boats. While companies like Axcient, Datto and Veeam (among others) remain in growth mode, others like Zenith Infotech have been trying to navigate a debt default.
Meanwhile, Intronis has shifted between multiple CEOs over the past two-plus years. The leaders have included Co-founder Sam Gutmann, Kent Plunkett, and Interim CEO Bolgatz. The Gutmann-to-Plunkett CEO shift in November 2010 was planned. But nobody has every really stated why Plunkett exited Intronis in September 2012. Industry chatter suggests sales costs rose dramatically under Plunkett before his exit, and Bolgatz did a cost reset in recent weeks while Intronis looked for a new CEO.
Referring to the recent sales team cuts, Faulk said: "The company got ahead of itself in hiring -- primarily on the sales side. The economics were not what they needed to be, very bluntly. Adjustments had to be made. It’s that simple."
Faulk also wants to assure partners and customers that the company stands on firm financial footing. "There is no issue on burn rate or cash flow," he said. "I would have never joined the company if there was an issue. I walked away from a very good position to join Intronis." He added that Intronis is funded for growth and has significant cash in the bank.
CEO Search: Finding Mr. CloudIntronis board members (including OpenView Venture Partners' George Roberts) met with a range of candidates in recent months, as did Bolgatz, who now shifts from interim CEO back to his full-time post as VP of engineering.
According to Bolgatz, Faulk is "Mr. cloud. He knows how to go to market. He understands the growth-stage company. He has a tremendous pedigree. This is not his first time around the block. Rick is the perfect fit here. His blend of business acumen and the cultural fit were a match made in heaven. When it's the right person you know."
Adds Faulk, "I got a call from a head hunter. I wasn't looking at the time. A few things interested me about the Intronis opportunity. It's the SMB market, which I know well." Indeed, he quipped: "I've been selling in that space since I'm 12."
Also, "backup in the SMB space is a well-understood value proposition and it's under-penetrated. I also believe in channels. It's a scalable way to go to market. There's a worldwide opportunity; we can expand outside the U.S. Perhaps through acquisitions."
Global ViewFaulk's very brief hint about global expansion and maybe even M&A spoke volumes. For the most part, Intronis is a U.S.-centric player. And the U.S. market is flooded with channel-centric backup companies. But the SaaS model could allow Intronis to go global pretty rapidly -- assuming Faulk can localize the platform plus build the right international relationships.
The Intronis situation reminds me a bit of the Autotask inflection point about two years ago. At the time, Autotask shifted from Co-founder Bob Godgart to current CEO Mark Cattini. Amid the transition, Autotask had a successful cloud-based platform but it was largely limited to the U.S., and basic capabilities such as multi-browser support were not in place. Autotask raised some money and soon localized its cloud across Europe, Australia, Asia and more. Plus, Autotask opened up its front end and back end with APIs and multi-browser support.
If I had to guess, I think Faulk will make similar global moves at Intronis while remaining channel-centric.
Praising the TransitionBefore marching forward, Faulk also took a moment to thank Bolgatz for his work as interim CEO. "It's a very difficult job being an interim CEO," Faulk said of Bolgatz. "He did a terrific job holding the strategy together. He made my job a lot easier walking in the door here."
Indeed, Bolgatz made Intronis swallow a bitter pill that involved sales team cuts. Now, Intronis is looking to apply some of those cost savings in other areas. Yes, the company is hiring -- particularly on the technical side of the house. And Faulk has been interviewing CMO (Chief Marketing Officer) candidates in recent days.
I suspect Faulk is demanding international experience from those CMO candidates...