MarkLogic Bets New Offices Equal Revenues
September 25, 2014
MarkLogic, founded more than a decade ago, is an interesting company. I heard that Google kicked its tires because Christopher Lindblad is a true wizard.
The outfit offers an Extensible Markup Language data management solution. Over the years, the company has positioned the system to slice and dice content for publishers, intelligence analysis for government entities, and enterprise search. Along the way, the company’s technology has been shaped to meet the needs of the pivoting forces in content processing. Stated another way, when one thing won’t sell at a pace to keep investors happy, try another way. In the course of its journey, the company brushed against Oracle and then found itself snarled in the confusion between JSON and XML and the sort of open proprietary extensions to the query language used to extract results from the XML store only to get buffeted by the hoo hah about Hadoop and assorted open source alternatives to Codd databases. Wow.
I read a content marketing / public relations story called “MarkLogic Expands Global Reach with New Offices in Chicago.” Check the source quickly because some BusinessWire content can disappear or become available to those who fork over dough to the “news” service. The write up asserted:
“The opening of these new offices is well-timed for the growing number of global customers who need the enterprise grade NoSQL solutions we are delivering to US-based customers,” said David Ponzini, senior vice president of corporate development, MarkLogic. “We are in an advantageous position to make an immediate impact in Europe and Southeast Asia. We continue broadening the market awareness for MarkLogic throughout the world.”
The trick, of course, will be to blast through the financial goals for the company set by the investors years ago. A failure to produce more than $60 million in revenues a several years ago led to the departure of one president. A couple of more senior executives have spun through the revolving door not too far from Google Island with its quirky dinosaur skeleton. Does that skeleton stand as a metaphor to proprietary software solutions?
In my view, the business thinking at work is more sales offices equals more sales. I once had an office in Manhattan even though I worked in Illinois. The cost was about $20 per month. I had an address on Park Avenue, south unfortunately and a 212 phone number. I made a sale or two to an organization run by John Suhler, but I quickly figured out that the key to making sales was my being in and around midtown.
I thought I read that outfits like IBM are going to a “no office” approach. Maybe MarkLogic has identified a solution to the overhead associated with full time equivalents and physical space? That begs another question, “What does MarkLogic know that IBM does not know?”
Some vendors have found that more sales offices increase costs without generating sufficient revenue to cover the overhead, miscellaneous costs and in country marketing expenses. I can name several Paris, France based content processing companies who learned first hand that additional offices are a very, very expensive proposition. Other companies leverage partners for revenues. In one of my industry reports, I pointed out that prior to the sale of Autonomy to HP, Autonomy figured out a hybrid sales model that seemed to work as long as Dr. Lynch was cracking the whip. Remove the management, the partnering model can go off the rails.
Don’t get me wrong. XML is a wonderful solution to certain types of information challenges. Thomson Reuters can produce hundreds of for fee publications using XQuery and XSLT with proprietary extensions. A quick look at Thomson Reuters financial results suggest that more may be needed by this company than a foundation and an XML data store.
How quickly will MarkLogic deliver a five or ten X return on the $70 million investors have pumped in. In today’s market, cranking out $300 to $700 million in revenues from content processing technology that competes with open source alternatives is a tall order.
Maybe more sales offices will do it? My hunch is that more closed deals is the evidence some stakeholders seek.
Stephen E Arnold, September 25, 2014
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I’m not sure you know MarkLogic very well:
http://www.marklogic.com/blog/best-operational-warehouse/