News Column

Business Software Booms in Massachusetts

Sept. 24, 2012

Jessica Van Sack, Boston Herald

Business Software

The Hub is riding an unprecedented wave of enterprise software success, with investors and entrepreneurs flocking to startups that provide tech solutions to business clients.

Enterprise technology companies are low profile. They sell to businesses and boast reliable revenues that don't depend on the whims of consumers. Here are some local enterprise software companies to watch:

--Demandware, which provides e-commerce websites for Adidas, New Balance, Gucci and others around the world, with its customer base growing 35 percent annually. While highly publicized tech IPOs such as Facebook and Zynga fell hard, Demandware stock was trading at $30 Friday after debuting at $23 in March.

--Acquia, founded by open-source software superstar Dries Buytaert, with a content management system used by 2,500 customers including the prime minister of France, the Grammy Awards and every site that ends in .gov.

--Rapid 7, which is headquartered in the Prudential Center and helps businesses assess and fix their tech security.

Others include AppNeta, which helps companies that want fast delivery of web apps and content, has 1,000 users worldwide and had raised $18 million in venture capital as of June; Akiban, a cloud data management company; Apperian, which was founded by former Apple employees to help businesses build corporate apps; and VMTurbo, which has more than 8,000 worldwide users of its workload management platform.

Michael Skok of North Bridge Venture Partners has spent three decades in the software business, but has never seen enterprise software as hot as it is today.

"It just went out of favor because I guess what it is isn't sexy," Skok said. "But we, as a firm, think it's extremely sexy."

He added, "Right now it's certainly one of the top segments for us, and by far and away the most obvious."

The boom in enterprise is fueled by several factors -- growth in cloud computing, the influence of Apple's user-friendly designs and the increased ability of employees to bring their own devices to work, sending corporate app development into overdrive.

Bain Capital Ventures managing director Ben Nye said Boston's academic landscape and high concentration of entrepreneurs make it a hotbed for enterprise companies. "The vast majority of what we do at Bain is enterprise-centric," he said.

Although venture capital investment was down by 18 percent in the first quarter of this year, the investment in enterprise software companies increased by 14 percent, according to a Dow Jones VentureSource survey.

"We get to do things now that are exciting in terms of the innovation and more fun," said Tom Erickson, who has spent his entire career in enterprise and is now CEO of Acquia, on the list of Forbes' most promising companies in America and named private company of the year last week by the Massachusetts Technology Leadership Council.



Source: (c)2012 the Boston Herald. Distributed by MCT Information Services.


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