Q&A with Troy McAlpin, CEO and chairman of xMatters

Service Management

by Steve Evans| 26 July 2010

Steve Evans talks to Troy McAlpin about relevance engines and what they mean for today’s enterprises

Steve Evans talks to Troy McAlpin about relevance engines and what they mean for today's enterprises.

You build what you call relevance engines. Can you explain just what that is?
A relevance engine is something that can be added on to other products and services and is there to help our clients connect with their customers at a specific time. The moment that matters is different for different people - priorities change depending on what's happening and companies that can figure that out and connect with the person at the right moment are going to see their product and services used more.

Part of why we exist is that times change; we're all walking around with different devices and that has changed expectations. We expect to have access to whatever we want whenever we want it. When we don't get that we get frustrated. Most of the products and services were not built with that requirement in mind and companies are really struggling with bridging that gap. That's where the relevance engines fit it.

Troy McAlpin, CEO of xMatters

You said that it can sit on top of other applications - where do you find it normally sits?
In some cases it can be SAP for supply chain - one of our customers in the US, a grocery store chain, uses it to deal with product recall issues. If they have a product that needs to be recalled the relevance engine will the figure out who the store managers that are on duty are and message them with the details. They will do an active count of what's there and report back at various stages, right from pulling it from the shelves to it leaving the store. They used to have around 25 people working on just product recalls and have been able to shrink that to just one operator. They've shaved around $8m a year of costs away from their product recalls. It can also help with audit trails - they can prove when they became aware and what action they took. It reduces the risk of litigation.

It can also sit on top of IT monitoring systems for efficient and effective management of IT. If you have different systems monitoring different apps, data streams, infrastructure within a company and hundreds of thousands of IT personnel - how do you manage all that? People can say who they are, what they are responsible for, what they are interested in and what services they use, and we can monitor that to find a match. Because we understand your profile we can protect you from things you don't what to know. Companies that are trying to figure out how to deal with a mobile group of employees often start spamming them with things that are irrelevant. I have less tolerance for spam on my mobile device than my laptop, but I'm grateful if it's relevant to me. The magic comes from figuring out what you want when you want it - so you can do something about it.

So what is the UPS? What's it sold as?
The majority of our sales come from the IT service management and operation side of the business, where people are trying to be more efficient with IT. And it's all done in real-time.

Is it competition to ITSM?
No, it's complementary to the big four - IBM, BMC, CA and HP. What they are good at is logging a problem and making sure that people are dealing with it. They were designed to deal with an incident, not with people. We are a very nice complement because we deal with the people side of it. We've taken the humans out of the process that don't need to be there. What's really important is the one having the problem and the one fixing it, everyone else needs to get out of the way.

How did the recession hit xMatters?
I don't think the recession helped anybody because it's not over and people are still fighting it. It didn't impact our top line growth. Our growth rate has been just over 40% per year for the last three years and we expect that to continue this year.

How do you expect to continue that growth?
We're still a very well-kept secret; our customer base is about 800 around the world, with about 250 in Europe and 125 of those in the UK, so we're still in the infancy of the growth path. The opportunities we work with clients on tend to continue. About 60% of our revenue comes from existing customers, which is quite a high ratio. We take a consultative approach; a lot of software companies are packaged, we tend to approach it different. We sit down with them a work out what's important to their customers. We've set a standard by calling what we do a relevance engine - it has to be relevant to the person using it or it's pretty easy to criticise us!

Tell me about the What Matters Now project.
We're sponsoring the project and the first stage is to constantly be scanning social networks and news services and so on and consolidate that down into trending info - what are people talking about? It enables us to sit down with our clients and give them a better understanding of what their customers care about. It's an ongoing thing that we will continue to invest in and we've opened up the API so people can build widgets and so on.

Do you think you'd be better served within a larger company, perhaps one of the big four you mentioned earlier?
It's not on my agenda. My expectation is that we will continue to grow off into lots of different areas. I think we've got a long way to go. It's always been my view that it would be a competitive advantage to one of the four but it would be a big disadvantage to the rest of the market, to our clients. Once you come part of one of the big four you're limiting your customers.

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