Name: Brad Waugh
Occupation: Became Akibia’s President for Application flexHosting in 2000. He is responsible for the management and delivery of ongoing eCRM application support services to customers worldwide.
Background: Before coming to Akibia, Waugh was Executive Vice President of Complete Business Solutions, Inc. (CBSI), where he managed over 1,000 people in the Eastern U.S. and Canada. Prior to that, as acting President of c.w. Costello & Associates, he drove strategy and negotiations during the company’s acquisition by CBSI. Waugh has over 15 years of computer industry experience, primarily in the areas of marketing, product development and business management.
Education: Boston University
Family: Wife and two children
Age: 38
Residence: East Greenwich
PBN: Tell me about Akibia.
WAUGH: We sell Customer Relationship Management (CRM) software, dealing with the front office. It’s a $100 million business. One product, Siebel, owns 84 percent of the world market share for CRM. It’s used for automating the sales force, call centers, anything to do with customer relations.
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When did you leave CBSI ?
The end of May. I was there five years, including my time at c.w. Costello, I left primarily due to the fact the company had grown to about $600 million.
That would be a good thing.
My reasons for leaving were just as they had been when c.w. Costello was sold to CBSI. I wanted to stay around only a year. What I’m interested in is a business, a tech service company. When you grow to 5,000 people it’s hard to keep track of everybody. You lose the personal touch. In this company we have 417 employees.
Your position at Akibia?
President. I began the beginning of July.
How long has Akibia been around?
The name was changed from Polaris because it was getting confused with a snowmobile firm. Akibia is a plant, a vine from Southeast Asia that has a symbiotic relationship with the tree in that part of the world. We have a symbiotic relationship with our customers.
Akibia is a $100 million company and is privately owned?
Yes, our venture capitalists are Ascent out of Boston and Harborvest. The first one to invest in us was Citizens Bank during our transformation from a hardware service company to a software solutions company. Citizens was the first to invest during the transition. They also handle our line of credit. They’ve been absolutely fantastic.
Does it have plans to go public?
Absolutely. Definitely, something we’re looking at in the next six to 12 months. One of the companies, our competition, did $17 million in annual sales and recorded over a $35 million loss on $17 million in sales. We’re doing $100 million and are extremely profitable. Our margins are close to 45 percent and more. That other company went public at $14 a share and has a market cap of over $800 million. That will give you an idea of how big we think we are.
Where is the company located?
We have offices in Boston, Westboro where our headquarters are, Amsterdam, London, Texas, New York and California. We’re going to be adding about five to six offices per year.
I understand you were considering moving a significant facility to Providence.
One of the things we were looking at doing is we need to expand. We did speak to the state and actually worked with a local real estate firm. The problem is for the amount of space we need – about 80,000 square feet – we needed to be right next to the train station because a lot of our people commute. There was nothing available. We’re going to take an office in Rhode Island with about 4,000 square feet. Right now there’s nothing in Rhode Island that can support our expansion.
It’s kind of ironic the state is doing such a wonderful job with the mass exodus program – the good news is the market is doing fantastic. The bad news is there’s no supply of office space for companies of significant size in the Rhode Island market.
Tax wise, Rhode Island is a great place to go, there’s all the incentives to go there, but you couldn’t even consider it when there was no space. We will open up a recruiting facility in Rhode Island. If you look at what happened with c.w. Costello, we opened with a very small office and grew to 30,000 square feet in just two years.
If there’s no space, how can the state get beyond the rhetoric?
You’re right. You hit the nail right on the head. If you’re Fidelity Investments and you want to go to Lincoln that’s fantastic. If you’re a technology firm, there’s a need to be near the train station (for an easier commute). When was the last time a new office building was put up in downtown Providence? The Citizens Bank building is the only one that comes to mind. We have all that raw land from the Gravity Games that goes from Providence Place all the way around the train station. The demand is out there. People are looking for space and there’s nowhere to go if you want to stay in the downtown. And I have to be in the downtown.
The Rhode Island Technology Council has been the voice for high-tech in Rhode Island. We hear there’s some controversy with the group. What is your understanding?
The last time, to be fair, that I went to a meeting was back in January. I was stepping down after being president for two years. We had just brought in our second executive director in two years time. In Massachusetts where we have the Massachusetts Software Council, they’re able to standardize on one particular niche, on one very small part of the high-tech industry. They’ve done a good job of it. RITech, because of the nature and physical size of the state and number of companies we have, has to wear a number of hats. When you have so many different niches to fill the obligations, not only of your members, but also some of the obligations and expectations the state has for the high-tech community, the two can collide and in some cases they have. Is there a division between the commercial and government side. I’d say on the surface no, but it’s a division that’s created just because of the nature of our small state. So many individuals with expectations for the group when you try to mix those together it’s not necessarily a tasty drink.
But the other reality too is the government involvement we’ve had with RITech was necessitated out of the fact that financially the group could not stand on its own. The personalities. Sometime it is the nature of business, sometimes the personalities of the members – both the commercial and government sides have clashed and it didn’t need to happen in such a public forum.
It seems there’s been a revolving door for directors?
We’re on our third. The first director clashed with some of the government folks. The next person we had in there – the biggest problem that individual had was a managerial problem, managing their own time. Now the new gentleman who is there I don’t know a heck of a lot about him, but it seems Charlie Nault (the president) has left, because of the growth of his own business.
The organization has had quite a few successes. Two years ago the organization put on a venture capital forum and it was successful. And it was repeated this year. Some of the legislation that has been passed the last couple of years helps the industry. And the state put on Itec, the technology forum. The biggest success they’ve had is addressing the serious need for IT labor in Rhode Island. It’s holding us back. If we can’t find the labor, that’s a significant problem. Some of the members have been very influential trying to make sure we don’t have a problem bringing in IT labor to Rhode Island.
What can Rhode Island learn from Massachusetts?
Getting back to space. If you look at what Massachusetts has going for it that Rhode Island doesn’t. Drive along Route 495 or 128 and you see high-tech office parks. How many high-tech office parks do you know of within a 10-mile area of Providence? Some are being planned, the old Narragansett brewery, some are looking to turn that into a high-tech park. In the Greater Providence area there’s really none of the high-tech buildings you see on 495 and 128. The problem with the nature of the community down there, if you’re a high-tech company, if you look for a law firm to try and find firms to help with the IPO process you have to go to New York or Boston. None of the firms have expertise in the IPO business. The intellectual property talent you need is predominately in the Boston area. One of the things Kip Bergstrom (director of the Economic Policy Council) has said is we need to treat Rhode Island as a suburb of Boston. Rhode Island is not that far away when you look at the driving distances, but we treatourselves as a very separate entity from Boston.
The biggest problem we have is a lack of high-tech office space. We definitely have the workers. They’re there. Rhode Island workers are the most loyal you can work with. In Boston the turnover rate and attrition rate is phenomenally high. The square footage cost I have to pay in downtown Boston is over $50 a square foot. In Providence, for the same type of office space, it would be between $25 and $35.
