Recently, I had the pleasure of speaking with Richard Procter from the San Francisco Business Times. Initially, I thought the conversation would be about where we are going and what I see for the industry. However, as we started talking, the conversation focused on our history. Innotas has come a long way – now we have been a “Leader” in the Gartner Cloud-based PPM Magic Quadrant for three years running. Below is the article, enjoy.
Originally published in the San Francisco Business Times on June 13, 2014:
Innotas doubled revenue to $14.2 million in the past three years, says CEO Kevin Kern.
Just nine months after Kevin Kern joined Innotas as vice president of sales in 2008, the company didn’t have enough money to pay its workers.
“We had some people who were working remotely and flying in every other week,” he said. “For a company our size, that was insane.”
Fortunately, a strong sales team and a few bridge loans gave Innotas time to close the gap and survive.
Innotas is a growing leader in the field of project and portfolio management. Its software lets IT employees manage, track, trace and record all the projects they take on. Managers can keep track of how many projects all their employees and teams take on and gain a clear, definite picture of their allocation of resources as a result.
“We’re Salesforce for IT,” said Kern, who took over as CEO in 2010.
Innotas’ revenue has grown considerably over the last three years, doubling from $7.1 million in fiscal year 2012 to $14.2 million in fiscal year 2014. Innotas makes money by using a subscription-based model for its services, charging $540 per user per year. There is also a fixed, one-time fee at the start: $20,000 for companies with under 100 users, $40,000 for over 100 users, and if the company has over 1,000 users “then we talk,” Kern said. Innotas also provides ongoing technical support as part of the package.
“The land-and-expand strategy has worked really well for us,” Kern said.
When Kern joined in 2008, Innotas had 50 customers. Now it has approximately 400, Kern said, including UCSF, Autodesk and Bank of the West. The average tenure for one of Innotas’ customers is 2.73 years, though some have been clients for seven to 10 years.
AMN Healthcare, a San Diego-based healthcare staffing company with 1,800 employees and over $950 million in 2012 revenue, started using Innotas for its IT department this year.
“In terms of design, functionality and intuitiveness, it’s second to none from our standpoint,” said Tiernan Hussey, program manager for AMN. “We’ve used other (companies in project and portfolio management) before. This is really outstanding.”
Hussey said AMN learned about Innotas through Gartner’s Magic Quadrant ranking. Gartner, a technology research firm, rates companies in the project and portfolio management industry on 15 different criteria and plots them on a map with the axes “ability to execute” and “completeness of vision.” Innotas scored the highest by both measures, leading other, larger companies in the Bay Area such as Oracle.
A May 19 Gartner report on the industry notes that Innotas stands out from its competition because its product functions effectively on a portfolio level and not just an individual level. The same report cautioned that Innotas’ increasing popularity could become a weakness if it isn’t careful.
“Innotas is susceptible to growing pains as it continues to scale up to meet the needs of larger project organizations,” the report said.
The portfolio and project management industry is expected to grow — Gartner said it experienced a 208 percent increase in software inquiries in 2013 from 2012 — and Innotas plans to grow with it.
This month, the company will complete an office expansion that will double the space it occupies at 111 Sutter St. from 7,000 to 14,000 square feet, and Kern said the company plans to hire approximately 30 more employees between now and next February.
In addition to scaling up, Innotas wants to innovate its product even further. The company has begun developing a predictive analysis tool that Kern said will allow managers to optimize project portfolios based on the information available.
“It can tell if you can or can’t and should or shouldn’t take that extra work,” he said.
- Richard Procter, San Francisco Business Times