Silicon Valley plays host to the world’s largest technology companies - anybody who’s anybody has a base there - from Apple to eBay, it’s the definitive tech hotspot. In addition to the world-renowned companies, it’s also home to thousands of small startups. Because of this, Silicon Valley is a hub for technical innovation and takes centre stage when high-tech developments arise.
We were therefore keen to speak to Ian Charles, who has years of experience working across high-tech companies and who is currently CFO of Host Analytics. Host Analytics is a truly innovative company, offering a complete collection of enterprise performance management applications built from the ground-up as cloud-based applications. The project has finance at its heart, allowing for increased accounting and finance flexibility and a platform where IT professionals can gain more adaptability for their project backlog and budgets.
In our article with Peter Spinelli, CFO at CFO Publishing, we looked extensively at the development of the role of the CFO. It’s clear that the general consensus is that whereas the CFO was once a number cruncher, they’re now an essential strategic stakeholder. Ian echoes this ‘The data required today to run an effective finance organisation is tenfold what it was a decade ago’ and this reliance on data has elevated their standing within the organisation significantly.
Interestingly, Ian feels that although the role has developed over the last decade, the strategic responsibilities, which we now deem essential for a CFO, have actually always been part of the role, but now have additional importance . ‘I wouldn’t necessarily categorise it as aspects that didn’t exist a decade ago, but I would categorise them as maybe not as important as they are now, they were on back burner, not as front and centre’
Ian also understands the importance of SAS, and the insights that can be leveraged from using predictive analytics. The market is dictating that the customer is now buying and managing their technology and software in a way that suits their needs, the challenge for the CFO and the company as a whole, is to find a way of responding to that. Ian says; ‘the challenge that a CFO from a traditional software company is facing, is very different from the challenge of managing a SAS business’. For Ian, being ‘SAS-capable’ allows for the company to align itself with what the customer wants more readily. It is something that Host has been building on consistently, and an area which they are continually improving.
Host Analytics are an innovative and agile company who have managed to adapt to their customers’ needs as well as growing significantly in the past 5 years. This focus on growth is engrained in Ian’s approach, ‘We’re still trying to grow and capture market share - not decrease costs - I am more oriented in the growth direction instead of cutting costs’.
In order to guarantee Host Analytics financial efficiency, Ian pays great attention to the COA ratio, which calculates how much money the company is spending to generate a new dollar in recurring revenue ‘you’re trying to figure out where’s the tipping point of not spending, so we look at these metrics in a way that at this point in time it’s not worth spending additional dollars on this part of the market’
It seems that Ian puts a lot of emphasis on maintaining a passion for growth, whilst also guaranteeing that money is not wasted in areas of the business that are unlikely to bear fruits in the next financial year or that do not provide value for customers, a key foundation for any growing company.
This tipping point is becoming closer as Host Analytics go from strength to strength. Host Analytics more than doubled their new annual recurring revenue in their first quarter, but with rapid growth, a number of challenges emerge. Ian says; ‘how do we continue that growth and bring on the right staff and right salesforce and penetrate the right markets? The last thing you want is year on year growth and then a stall in the future’. Bringing about continued success boils down to a simple thought process - delivering what the market wants. Ian says Host Analytics are doing that by ‘launching applications and products that address what the customer wants’.