As a software securities analyst for investment banking firm Canaccord Genuity, Richard Davis spends 200 days a year on the road visiting companies. He goes to public companies such as Oracle and Salesforce.com, but he also visits up-and-coming software companies he thinks will go public in the near future. In his new column, Davis talks about some candidates he thinks may be ripe for the IPO class of 2012 or 2013.
ProcessUnity: Operational, compliance, and technology risk Management
I first met with ProcessUnity, based in Concord, MA, way back in 2003, and I thought the firm sounded promising because it had developed workflow software that to me looked like “McKinsey in a box.” Since then, ProcessUnity has significantly enhanced its functionality and, in the process, begun to build a marquee customer list.
The financial collapse of this recent recession has forced companies to think about governance, risk and compliance (GRC) in a proactive, rather than reactive way. Demand for GRC applications is growing almost 30 percent a year, and cloud solutions are closer to 40 percent.
ProcessUnity has cloud-based feature sets that help firms manage operational, compliance and technology risks. Its rules and workflow engine helps financial institutions assess investment manager and sub-advisor risk. For the finance department, ProcessUnity’s software automates tracking of global incident reporting, end of month financial closings, 38a-1 Tracking, SAS70 calculations and Sarbox reporting.
For example, one large consulting firm uses ProcessUnity to enable risk incident reporting worldwide. A large Boston mutual fund company deployed ProcessUnity in three months for its retirement management unit. The firm said the competitive solution would have taken two years and $5 million to get up and running with the company’s existing software vendors.
Longer term, we expect the most successful risk management software vendors will transition from selling compliance (defense) to forward looking simulation (offense). While you will always need some compliance as insurance, firms that use risk management proactively, both internally and extended out to partners and vendors, will achieve significant competitive advantage. ProcessUnity looks to us like they could be one of the firms that allows this to happen. If so, ProcessUnity has a big future ahead of it.
Approximate size: $50-100 million in revenues
Implications for public company investors: Some adjacent competition for the big tools firms like CA, HP, IBM, BMC, Progress and Pegasystems. The more successful SnapLogic becomes, the better it will be for the pace of adoption of cloud applications.
Globoforce: Employee recognition
I met with CEO Eric Mosley and CFO Steve Cromwell of Globoforce recently. Based in Southborough, MA, the company operates in the emerging segment of HR known as employee recognition. In an economy in which margins and spending are under constant scrutiny, one of the most cost effective means of rewarding and incentivizing employees is through non-monetary gifts. If you can give the recipient a choice of reward gift, that’s even more effective.
Globoforce has built a cloud-based fulfillment platform that some of the world’s best companies can access to set up rewards programs for their employees. This includes firms like Amgen, Avnet, Dow Chemical, DHL, Fairmont Hotels, Intuit, Polaris, Symantec and Thompson Reuters. Globoforce competes with both firms that manufacture rewards (posters, cubes, etc.), and the recently Sequoia-funded Achievers.com.
Approximate size: >$125 million revenues.
Richard Davis is managing director of enterprise software for the brokerage firm Canaccord Genuity. Before joinging Canaccord, he spent 10 years as a senior analyst at Needham & Company. Previously, Davis was at Tucker Anthony, where he launched the firm’s Internet and enterprise software coverage.
Tightrope image via Shutterstock
Filed under: Entrepreneur Corner, VentureBeat
