Walter Scott, the newly-appointed American CEO of GFI Sotfware, has a typical US approach to the current global economic situation. "There are companies like ours that have lower cost products which make things easier. There are a lot more hamburgers sold in a downturn environment than lobsters or filet mignon," he said in an interview with The Times Business.
"I think that does give us an advantage and it also helps our install base as customers are much less likely to make large new investments in such times. We have the advantage now as we have not invested in the larger non-English-speaking markets. With a high-value, low-cost product and a company that is easy to do business with, it is simple and easy to launch in a market, plus we run a very efficient business. We have about 220 people worldwide, we are in the $50-60 million revenue range. We do have some runway where other software companies that deal with the auto industry, for example, have been affected."
GFI is a leading software developer that provides a single source for network administrators to address their network security, content security and messaging needs. It has a strong focus on small-to-medium-sized businesses. Founded in 1992, GFI has offices in Malta, London, North Carolina, Hong Kong and Adelaide which support more than 200,000 installations worldwide. GFI is a channel-focused company with over 10,000 partners throughout the world.
Despite it being a success story, Mr Scott admits that GFI's performance at the end of 2008 was negatively affected by the strength of the dollar. "GFI got hurt the most by currency. We trade in dollars and when the dollar strengthened against the euro this affected our financial performance. In the fourth quarter we lost almost $1 million in revenue and profits just as a result of the impact of the strengthening of the US dollar. Almost half of our revenue is in euros and pounds and we have over 100 people here in Malta whom we pay in euros, and that does impact the company's revenue topline and profitability."
Mr Scott was appointed CEO of GFI at the end of October 2008. Before this he was CEO of Acronis, a provider of scalable storage management and disaster recovery software, where in the space of three years he increased revenues from less than $20 million to approximately $120 million for 2008. Before joining Acronis he was CEO of Imceda Software, where he carried out a combination of leadership and marketing strategies that resulted in a successful sale of the company to Quest Software for $61 million. He was also instrumental in Embacadero's successful IPO in 2000. He started his career in sales and marketing positions at Banyan Systems and BMC software.
What did he see in GFI that encouraged him to join? "I had worked with the venture capitalists associated with GFI for the past five years and they had asked me to take a look at GFI. I was impressed by the size of the install base, the number of customers they had, what they manufacture and the fact that customers buy lower-cost products. It's always easier to represent products that people want to buy versus products that you have to sell."
Mr Scott, who holds a Bachelor's degree in Marketing and a Master's Degree in Business Administration from the University of Maine, was also very impressed with the work culture at GFI in Malta. "In America it's not common to go to a small company and see employees that are 26 years old who have been with the company for between eight and 10 years. Neither is it common to have such a good academic environment and the ability to leverage a worldwide organisation at companies of such a size."
He believes GFI's main asset is its people and the company's main challenge is attracting and maintaining talent. "In Malta this seems a little bit easier for us. Some time after I was appointed CEO we employed some new people and a new executive team to take the company forward. I've also just approved the hiring of more employees. We have been very successful in finding people with international experience whether in HR, developers, people who specialise in Google click advertising, people in accounts or customer service."
Mr Scott said the ability to develop and launch a channel is another challenge "which is something GFI has done very well in the UK market, the German market and in Australia and we have taken our successes there and tried to replicate them around the world".
He admits that coming in as a new CEO was a difficult thing to do, but he did have "the good fortune of having the support of the board because I have worked with them in the past". He also said there weren't any serious management changes except for one or two minor exceptions. "Our entire Malta organisation is exactly the same as the day I got here except that some new people have come in. So it has been a pretty easy transition into the company. Adapting to living in Malta might have its challenges but nothing beats the view from my apartment on Tower Road," he said.
He explains the changes that he implemented since joining GFI: "We brought on a new person to help us with operations, we promoted an individual in Malta to run the finances of the company, we brought in some marketing executives, we have streamlined our entire process of doing business, we invested in new products and language support for the company, we have completely readdressed our pricing and we are conducting business with new partners. The talent available in Malta makes this possible. If you were in Boston and wanted to build an organisation with 100 smart people and quickly, you couldn't do it. We have been successful here in Malta," he said with great satisfaction.
Asked whether the fact that GFI's operational HQ is in Malta could have an impact on the running of the business, he says: "I'm living here now although I spend half my time in the US and the UK where we have another major office. In the previous company that I ran as a CEO, Acronis, half the revenue was international and over 70 per cent of the people were international. The company that I ran before that was an Australian-based company. People are people and cultures are different, you just have to understand them and understand that the American way is not always right or going to work in other markets."
Mr Scott says there is a marked difference in approach to and attitude towards work between employees in the US and in Malta. "I think there is a much greater 'family' attitude towards the company in Malta. People go out to dinner together, they don't just work together during the week, they also socialise on the weekends. Every other Friday, for example, every company employee meets on top of the roof and spends time together. I'm going out to dinner with the entire marketing team tonight. We have a lady who does a wonderful job cleaning our offices - she's been here five or six years. We have people who have been here for 10 years, ever since they left school or university. That is something we don't see a lot of in the larger markets."
Pointing out that Nick Galea, the founder of the company in Malta, "was definitely ahead of his time", Mr Scott explains that GFI already has nine products in its portfolio, "which is a lot for a company our size". He said that such a large portfolio makes the testing of software products more difficult "so there may be some consolidation in which we will combine two products into one product to make it easier for our customers to do business with us".
Mr Scott said the company was definitely looking at moving into other markets ranging from back-up space and addressing the needs of the SMB. "We are spending a lot of time talking to our customers and channel partners asking what other products are needed. One such need that came up very aggressively was back-up. Other channel partners told us they wanted our software offered as a service. The goal of the company is not to sell to the larger customers. Our customer base is fewer than 1,000 IP addresses or end-users. The company's focus over the next three or four years is really about bringing enterprise level products to the SMB."
GFI's short-term goal, he explained, "is to make sure we have the right management team in place, the right strategy and to spend a lot of time looking at the products to make sure that by 2010 we are either number one or number two in every market we participate in".
"In the long term, I think we are going to see much more investment in Malta, Germany, France and Italy. We are going to branch out into other languages. We have partners in Romania with whom we have done very good business, so we'll continue the international footprint, and most of our investments now are going into the R&D (research and development) side. If you have the right sales channel and marketing engine, it is about giving R&D the resources it needs to bring the company forward," he said.
GFI has a strategic partnership with Microsoft - it is a Gold Certified Partner. Among GFI's customers are Microsoft, NASA, Telstra, Volkswagen, Coca-Cola Beverages AG, European Central Bank, BMW, Siemens, Fujitsu, Avis, US Navy, Tiscali AG, The Body Shop, Triumph Adler, Beiersdorf AG, British Midlands, Peugeot, Toyota, Caterpillar,
PerotSystems, Compaq, Time Warner Cable, Arthur Rutenberg Homes, Ericsson, the US IRS, Prudential Real Estate, American Hakko Products Inc., BT Belgium, USAF, Giorgio Armani, Benetton and many more.
"I think that does give us an advantage and it also helps our install base as customers are much less likely to make large new investments in such times. We have the advantage now as we have not invested in the larger non-English-speaking markets. With a high-value, low-cost product and a company that is easy to do business with, it is simple and easy to launch in a market, plus we run a very efficient business. We have about 220 people worldwide, we are in the $50-60 million revenue range. We do have some runway where other software companies that deal with the auto industry, for example, have been affected."
GFI is a leading software developer that provides a single source for network administrators to address their network security, content security and messaging needs. It has a strong focus on small-to-medium-sized businesses. Founded in 1992, GFI has offices in Malta, London, North Carolina, Hong Kong and Adelaide which support more than 200,000 installations worldwide. GFI is a channel-focused company with over 10,000 partners throughout the world.
Despite it being a success story, Mr Scott admits that GFI's performance at the end of 2008 was negatively affected by the strength of the dollar. "GFI got hurt the most by currency. We trade in dollars and when the dollar strengthened against the euro this affected our financial performance. In the fourth quarter we lost almost $1 million in revenue and profits just as a result of the impact of the strengthening of the US dollar. Almost half of our revenue is in euros and pounds and we have over 100 people here in Malta whom we pay in euros, and that does impact the company's revenue topline and profitability."
Mr Scott was appointed CEO of GFI at the end of October 2008. Before this he was CEO of Acronis, a provider of scalable storage management and disaster recovery software, where in the space of three years he increased revenues from less than $20 million to approximately $120 million for 2008. Before joining Acronis he was CEO of Imceda Software, where he carried out a combination of leadership and marketing strategies that resulted in a successful sale of the company to Quest Software for $61 million. He was also instrumental in Embacadero's successful IPO in 2000. He started his career in sales and marketing positions at Banyan Systems and BMC software.
What did he see in GFI that encouraged him to join? "I had worked with the venture capitalists associated with GFI for the past five years and they had asked me to take a look at GFI. I was impressed by the size of the install base, the number of customers they had, what they manufacture and the fact that customers buy lower-cost products. It's always easier to represent products that people want to buy versus products that you have to sell."
Mr Scott, who holds a Bachelor's degree in Marketing and a Master's Degree in Business Administration from the University of Maine, was also very impressed with the work culture at GFI in Malta. "In America it's not common to go to a small company and see employees that are 26 years old who have been with the company for between eight and 10 years. Neither is it common to have such a good academic environment and the ability to leverage a worldwide organisation at companies of such a size."
He believes GFI's main asset is its people and the company's main challenge is attracting and maintaining talent. "In Malta this seems a little bit easier for us. Some time after I was appointed CEO we employed some new people and a new executive team to take the company forward. I've also just approved the hiring of more employees. We have been very successful in finding people with international experience whether in HR, developers, people who specialise in Google click advertising, people in accounts or customer service."
Mr Scott said the ability to develop and launch a channel is another challenge "which is something GFI has done very well in the UK market, the German market and in Australia and we have taken our successes there and tried to replicate them around the world".
He admits that coming in as a new CEO was a difficult thing to do, but he did have "the good fortune of having the support of the board because I have worked with them in the past". He also said there weren't any serious management changes except for one or two minor exceptions. "Our entire Malta organisation is exactly the same as the day I got here except that some new people have come in. So it has been a pretty easy transition into the company. Adapting to living in Malta might have its challenges but nothing beats the view from my apartment on Tower Road," he said.
He explains the changes that he implemented since joining GFI: "We brought on a new person to help us with operations, we promoted an individual in Malta to run the finances of the company, we brought in some marketing executives, we have streamlined our entire process of doing business, we invested in new products and language support for the company, we have completely readdressed our pricing and we are conducting business with new partners. The talent available in Malta makes this possible. If you were in Boston and wanted to build an organisation with 100 smart people and quickly, you couldn't do it. We have been successful here in Malta," he said with great satisfaction.
Asked whether the fact that GFI's operational HQ is in Malta could have an impact on the running of the business, he says: "I'm living here now although I spend half my time in the US and the UK where we have another major office. In the previous company that I ran as a CEO, Acronis, half the revenue was international and over 70 per cent of the people were international. The company that I ran before that was an Australian-based company. People are people and cultures are different, you just have to understand them and understand that the American way is not always right or going to work in other markets."
Mr Scott says there is a marked difference in approach to and attitude towards work between employees in the US and in Malta. "I think there is a much greater 'family' attitude towards the company in Malta. People go out to dinner together, they don't just work together during the week, they also socialise on the weekends. Every other Friday, for example, every company employee meets on top of the roof and spends time together. I'm going out to dinner with the entire marketing team tonight. We have a lady who does a wonderful job cleaning our offices - she's been here five or six years. We have people who have been here for 10 years, ever since they left school or university. That is something we don't see a lot of in the larger markets."
Pointing out that Nick Galea, the founder of the company in Malta, "was definitely ahead of his time", Mr Scott explains that GFI already has nine products in its portfolio, "which is a lot for a company our size". He said that such a large portfolio makes the testing of software products more difficult "so there may be some consolidation in which we will combine two products into one product to make it easier for our customers to do business with us".
Mr Scott said the company was definitely looking at moving into other markets ranging from back-up space and addressing the needs of the SMB. "We are spending a lot of time talking to our customers and channel partners asking what other products are needed. One such need that came up very aggressively was back-up. Other channel partners told us they wanted our software offered as a service. The goal of the company is not to sell to the larger customers. Our customer base is fewer than 1,000 IP addresses or end-users. The company's focus over the next three or four years is really about bringing enterprise level products to the SMB."
GFI's short-term goal, he explained, "is to make sure we have the right management team in place, the right strategy and to spend a lot of time looking at the products to make sure that by 2010 we are either number one or number two in every market we participate in".
"In the long term, I think we are going to see much more investment in Malta, Germany, France and Italy. We are going to branch out into other languages. We have partners in Romania with whom we have done very good business, so we'll continue the international footprint, and most of our investments now are going into the R&D (research and development) side. If you have the right sales channel and marketing engine, it is about giving R&D the resources it needs to bring the company forward," he said.
GFI has a strategic partnership with Microsoft - it is a Gold Certified Partner. Among GFI's customers are Microsoft, NASA, Telstra, Volkswagen, Coca-Cola Beverages AG, European Central Bank, BMW, Siemens, Fujitsu, Avis, US Navy, Tiscali AG, The Body Shop, Triumph Adler, Beiersdorf AG, British Midlands, Peugeot, Toyota, Caterpillar,
PerotSystems, Compaq, Time Warner Cable, Arthur Rutenberg Homes, Ericsson, the US IRS, Prudential Real Estate, American Hakko Products Inc., BT Belgium, USAF, Giorgio Armani, Benetton and many more.