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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

November 6, 2013 at 6:16 PM

Apptio founder Sunny Gupta on building the region’s next big tech company

It’s a big week for Apptio, the Bellevue-based enterprise software company that’s aiming to become a major presence in the Puget Sound region.

Apptio Chief Executive Sunny Gupta. Image provided by Apptio.

Apptio Chief Executive Sunny Gupta. Image provided by Apptio.

The 6-year-old company is hosting the inaugural conference of the Technology Business Management Council, a new organization to help information-technology leaders manage and forecast their companies’ technology needs.

Apptio is hoping to make its IT budgeting tools the standard software suite for this audience, similar to the way Salesforce.com has become a standard for salespeople, and Workday is becoming the standard for human-resources departments.

The TBM event, at the Grand Hyatt in Seattle, drew nearly 400 IT leaders, including the chief information officers of Cisco, Coca-Cola and DirectTV. They’re among the hundreds of Apptio customers using its system to manage tech budgets ranging from $10 million to $6 billion a year.

They shared tips and tales of managing and monitoring costs. A key theme was elevating the role of CIOs to guide business decisions, and how to keep a handle on the proliferation of different technologies at big companies, which may use thousands of different technology products.

“The role of CIO is changing – they’re no longer just a provider of technology, of email and office apps and that sort of stuff, they’re really becoming service providers, a business partner with the business,” Apptio Chief Executive Sunny Gupta said during a break at the event.

“The modern CIO has to build a lot of services internally, but they’ve also go to procure a lot of services externally,” he continued. “Managing that complexity from a cost perspective, from a value perspective, from a risk perspective, is extremely important. That’s the paradigm that we’re enabling.”

Apptio also is going through a transition of its own. After raising about $130 million from investors and growing to about 400 employees, it’s building up its leadership team, with a new chief financial officer likely to be added soon. Gupta said the company is trying to add more leaders with big-company experience to help Apptio scale up from hundreds of customers to thousands around the world.

Gupta sold his enterprise startup, iConclude, in 2007, just two years after it started and before it fully blossomed. This time around he’s planning to build Apptio into a significant public company along the lines of Concur or F5.

Here are edited excerpts of my conversation with Gupta.

Q: Are you disclosing sales yet?

A: No, we are growing at a pretty fast growth pace — 50 percent-plus growth rates.

Q: You’ve hired a president and are hiring more senior leaders. Will you remain chief executive?

A: Yes, I love being CEO. I’m a market-product-vision CEO; I spend a lot of time with customers, helping drive the strategy of the business.

The next set of moves are all about bringing other individuals who’ve seen a lot of scale experience …. We are beginning the next chapter, to say, “How does what Apptio does become more ubiquitous, used by every CIO, large or small, in every country?”

Q: Are your sales approaching $100 million a year (the common threshold for going public)?

A: Yes, on a run-rate perspective.

Q: So you’re getting to scale, adding a formal leadership structure. Is the next step toward going public seeing whether you can regularly hit quarterly targets?

A: Yeah, it really comes down to a level of getting the team kind of set. It comes down to getting a level of repeatability, predictability into the business.

The third area, which gets pretty under-noticed a lot of times, as a private company I’m able to invest a disproportionate amount in innovation, which makes it a little bit harder.

Q: You don’t want Wall Street hammering you over expenditures?

A: Yes, exactly. We want to have a very strong muscle developed in the company, so if you do become a public-company, it’s a non-event.

Q: How are you doing with your efforts to reach smaller companies, and not just the Fortune 100 that were your initial customers?

A:  We are executing on that. Apptio has been very successful by getting mindshare of the world’s top CIOs on the platform. We have a lot of customers now at the low end. They still need to make the decisions- – what is my cost structure, how do I compare to the cloud? It’s the same challenges.

Q: Are you planning to do acquisitions?

A: Not yet. I’m not looking for business scale from somebody else, but if there’s some boutique technology and people [that] really complement our vision of TBM, that’s what we’d look for.

Q: Amazon.com and others are expanding here. Are you able to find enough talent?

A: We don’t lose anyone to Amazon. We do tend to get some really good development talent from Amazon.

Q: Do you see the company being the next Concur in five or 10 years?

A: That’s our desire. If you think about Concur, Concur owns a travel and expense cloud. Apptio owns the IT management and the IT costing cloud.

Over time we want to use that strength to extend to other functions in the enterprise, not only the role of the CIO, but we think the same thing can apply to many different things — legal, HR. There are many other areas within an enterprise that have the same kind of challenge.

We feel like we have the technology, we have the people, we have the team, we have customer leadership so we’ve got to go for it.

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