I was privileged to be invited by TMCNet to be interviewed on the industry changes and bring them up to date on Pegasystems. Rich Tehrani, now CEO of Technology Marketing Corporation, last visited the Pegasystems office ten short years ago. Here is a link to the video interview on the TMCNet website.
We have transcribed the interview below, and for those that pay attention to detail, the waterfront in the background of the video was not in fact Boston, but somewhere much warmer and sunnier, so when I say “welcome to Boston” I was being accurate. Just doesn’t look that way.
Rich: We are interviewing a number of the tech leaders in the New England area. In our program today, this is Russell Keziere, and he is the Senior Director of Marketing at Pegasystems. Russell, how are you?
Russell: Hi Rich, welcome to Boston.
Rich: Thank You. I was hoping to start out talking a little bit about your company. I think it’s been over a decade since I was actually in your office or around a decade or so and I’ve obviously been following but just haven’t been up to your office. This is my first video interview with your company.
Russell: Great. Well, we certainly do appreciate the opportunity. You visited us when we were 18 years old and in those 10 years what we’ve done is come out with our new 4th generation product that is a complete rewrite of our technology offering, to help organizations transform how they do work, intelligently automating that work and fix problems for their customers that they didn’t think they could solve before. Since that time we have gone on a bit of a run, particularly since the recession. The company came off its 13th record revenue quarter running right through the recession. Organizations are turning to us in tough times and in good times to help them tackle their hardest problems.
Russell: Thank you.
Rich: So what sorts of problems are you solving?
Russell: Well, part of the problem is that business people are feeling frustrated by their inability to take their good ideas and execute them into operations. The number one reason is they can’t get them into the systems that govern the operation. We all love technology in business but, you know, it is a curse and a blessing; what we’ve tried to do is solve the problem that comes when business people have great ideas that they can’t execute. So our new system that is attracting all this attention and this growth is really around capturing all those goals, those intentions and being able to bring them into the operational management of the business in a much more agile and dynamic way. A lot of organizations are looking to bring agile, dynamic flexibility into their operations and they need a new kind of technology that doesn’t rely on people actually manually writing code because, frankly, that’s kind of primitive. Computers should be smart enough to generate the software code that drives our business forward and in a way ordinary business people can take control.
Rich: So how would I know if I am a candidate for the solutions that your company offers?
Russell: The first thing to look at is: what is the rate of change that you’re facing? In other words, do you have government or regulatory or industry change that you need to dynamically and immediately address? Do you have a lot of training issues where you need to train people and get them to learn how the new processes work? Do you have global competition? Are you trying to grow your operations? Are you trying to cut cost out and innovate with new products?
Rich: I think you just defined every company.
Russell: That’s why the market has been responding so well. We actually see the opportunity to be quite large. We believe that big software – I’m talking about packaged applications, enterprise applications – have hit a wall; now they are more about maintenance and revenue support than innovation. The businesses are actually saying “Hey, guys, I don’t want to hang on to this boat anchor, this dinosaur of a vintage application if I can’t bring in differentiation and innovation. I’ve got to respond to the global market. I need to come out with new products more quickly. I need to really focus on customer service. How do I improve my service delivery, and how do I improve the customer experience when my customers engage with my company?” These are the hot-burning platform issues and we have an opportunity to bring in system layers of differentiation and innovation on top of what they’ve got now and let them have some fun, let them do what their mothers raised them to do which is to come up with great ideas and drive business.
Rich: So differentiation, innovation without programming.
Russell: That’s correct.
Rich: So what’s the method there that you are using?
Russell: That’s our software. It’s Pega software that is recognized by analysts as a leader in case management, a leader in CRM, a leader in business process management. But I stress, it’s all one product. We’re bending the categories of what’s possible with business software. Normally you have to get separate tools to help you develop software or you just buy different software applications. With Pega, you get the best of both worlds. You are able to take pre-built solutions that are designed for an industry and then extend them quickly to give the business people the opportunity that they need to make the changes that their competition is forcing on them.
Rich: So as the market is evolving, certainly evolving in the last five years, there are so many things happening, especially in Cloud and mobile solutions. How has your company been responding to these evolutions in the market?
Russell: Well, one of the things we did from the get-to – and we were thinking about it when you came to visit us 10 years ago – was, how can we have a solution that is so agile and flexible that it can move into this new Web services world, onto the Internet computing world. So from the outset, our system was ready for the cloud. And our Pega Cloud offering is actually quite popular with large enterprises who need to know that they can immediately deploy systems, get their good ideas going much more quickly. The Cloud has been critical for us. We see it doing nothing but growing. The same with mobile. Mobile is extremely important. The form factor – one of our customers is in healthcare management – and the form factor of the iPad is just like a clipboard in a hospital; you can walk around and you can do your work and basically improve the process of taking care of patients and use the mobile devices as an application. We see mobile use to continue to grow.
Rich: Now, you indirectly referred to a number of companies but one Silicon Valley company comes to mind when you talk about licensing fees and boat anchor software that has been around for many, many years. Competitively, how do you look at the landscape? How do you compare with what you see out there?
Russell: Well, we certainly help layer on top of existing core systems and we help organizations extend their ROI by taking core competencies from those systems and bringing them into the new layers of differentiation and innovation, they can actually continue to, if you will, benefit from their original investments and co-exist. Other organizations really want to build the whole platform on this new architecture because they want agility throughout and more and more core systems are available as Cloud offerings or software as a service and that gives them the opportunity to mix and match and do what they want for their enterprise. We think that the enterprise demands for tools that give you things you hadn’t looked at before like predictive analytics being able to recommend and have foresight into what’s going to come around the corner – What is your customer thinking? What can we tell from business intelligence that gives us a better opportunity to recommend or suggest or guide that customer interaction? We think that’s going to be extremely important as well.
Rich: Is there any example of a real world example of how that works?
Russell: Oh, sure. We’ve got a bank in Spain that for example, analyzes all your buying patterns and makes recommendations at the ATM level. When you are taking money out of the ATM, “Hey Rich, how about – I notice that you are running a little low and your credit is a low - and maybe we should extend that HELOC for you.” So this bank in Spain has done a great job of bringing dynamic offers that have been optimized for business intelligence in real time right to the customer interaction. Another example is British Airport Authority that uses our system to improve the process of planes landing and taking off at Heathrow, and they call that a CRM problem because it’s all about the customers; it’s all about customer centricity. If you are a customer at Heathrow airport you want to know when your plane is going to take off, where is the plane, do I have enough time to shop. And quite frankly, that’s how they make their money.
Rich: I was stuck in Heathrow for 8 hours or maybe more, maybe 12 hours just three weeks ago.
Russell: Was it weather related?
Rich: The fog was – I wouldn’t be able to see you in the fog.
Russell: That’s one problem we haven’t been able to solve yet. We’re working on it.
Rich: If you are going to solve that kind of problem, first start with the cold and then please get to the fog. And the shopping – I did it, my wife did it. So that’s the answer to the shopping question. I wasn’t sure how much she did. I just got the credit card statement.
Russell: That’s called outsourced shopping
Rich: Absolutely. So, what’s next for the company?
Russell: We think that the opportunity to bring this new way of doing business is going to become a mainstream option for enterprises. They are going to look at “hey, do we renew our maintenance agreements with these enterprise applications or perhaps do we look at finding a new way of giving dynamic business solutions to our enterprise mix?” And we think that the convergence of case management, business process management, customer relationship management, of complex event processing and predictive intelligence is all going to come to a point that makes sense when a business person can look at problems visually and see for themselves: “Hey if we go down this road, this is what’s going to happen.” They are going to start to be driven, as our key customers are, by transformation benefits. They are going to be looking at what’s their return on invested equity. One of our customers is a president of a Fortune 50 company, and he declared publically that he considered it a better investment to do a Pega project than to buy back stock in his own company.
Russell: So this is new approach is beginning to get noticed in enterprises that are wondering: “How do I handle my enterprise application portfolio? I think I need a little Pega to give it some sizzle, to give it that jump start, to get a competitive edge and to satisfy the needs of business people to get their organizations into high gear.”