Enterprise Video Still Growing, Ignite Technologies Reaches Profitability
While the larger CDN vendors targeting the media and entertainment market are still having problems growing their business, over in the enterprise vertical, many vendors involved with the video ecosystem inside the firewall continue to grow. The latest is Ignite Technologies, who last week told me they have now been "profitable for the last few quarters" and are "roughly cash flow break-even". Based on my estimates, Ignite should have revenue of between $11-$15M for 2009. The company has raised a total of $28M to date.
While Ignite and many of the other vendors in the enterprise video sector aren't doing anywhere near the revenue when compared to vendors that target the M&E vertical, the solution and value proposition they are selling is completely different. The growth of enterprise video is not dependent on ad formats, online video ad adoption, content syndication models or whether or not someone is willing to buy content. Video inside the enterprise continues to flourish as it has a very clear and concise value proposition. While the poor economy clearly has an impact on all vendors, in every vertical, companies like Ignite that are laser focused on enterprise video solutions, say that over the past few months, customers have been getting better with their budgets and money is starting to loosen up.
Ignite and many other enterprise video vendors also tell me that they are starting to see more RFPs in the market and continue to close deals that have a higher value. In the past few months, Ignite has closed at least half a dozen deals with companies that are all global multi-billion dollar corporations with very well knows brands. While I can't disclose who those customer wins are just yet, Ignite said many of them will be announced to the media by the end of the year. Ignite now counts roughly 50 enterprise companies as customers and said they now have over a million seats deployed, which is classified as their client being installed on the desktop or a mobile device. While still small, roughly 50 employees, they key here is that many companies like Ignite that are focused and very good at only targeting a specific vertical or ecosystem component, can succeed in the market. Ignite also mentioned that a good portion of their sales comes from a lot of referral and channel partners, an industry wide trend I wrote about a few months back.
While many vendors in the market continue to want to be the biggest or show signs of double digit revenue growth each quarter, many vendors like Ignite and others quietly continue to grow their business is a vertical that rarely gets any recognition. Video inside the enterprise is typically not very sexy, much of the content can be quite boring, but it's content that plays an essential role in the way Fortune 500 companies communicate with their employees, partners and customers.
Compared to many of the vendors selling into the M&E vertical, vendors selling into the enterprise space tend to change their strategy quickly to reflect the ever changing market conditions. A great example of this is when the market got bad and customers were not spending six figures to try out a solution, many vendors started offering SaaS based services that enabled customers to try out the offering without having to spend a lot of money or do a long integration. Vendors in this space tend to be a lot more quick and nimble, partly because of their size, but also because of their mentality. I think a lot of other vendors targeting the M&E space could learn a lesson or two from some of the enterprise video vendors.