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IceWEB has been able to keep expenses in line while
integrating five acquisitions over the past twenty-four months
Services
Communications Services
(ICEW – OTC: BB)
IceWEB, Inc.
205 Van Buren Street, Suite 420
Herndon, VA 20170
Phone: 703-964-8000
John Signorello
Chairman and
Chief Executive Officer
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
January 27, 2005
BIO:
John R. Signorello, Chairman and CEO, IceWEB, Inc.
John R. Signorello has served as Chairman of the Board and CEO of IceWEB, Inc. since March
2000. From 1991 until September 1997, Mr. Signorello served as the Chief Executive Officer
of STMS -"Solutions That Make Sense" - a private technology company he founded
that specialized in computer networks, systems integration and information technology.
In 1996, STMS was ranked the 17th fastest growing
technology company in America by The National Technology Council’s The Fast Five
Hundred. In September 1997, the company was acquired by Steelcloud (Nasdaq:SCLD), and Mr.
Signorello remained as Vice President of Sales and Marketing until November 1998.
From 1998 through 2000, Mr. Signorello served as a
Director for a publicly traded Internet Venture Fund. Mr. Signorello is an accomplished
musician, and serves as a principal in New York City Lights Entertainment. Mr. Signorello
received a B.B.A. in Marketing from Radford University in 1989.
Company Profile:
IceWEB, Inc. is a diversified technology company dedicated to delivering integrated
enterprise networking and security solutions to Government and commercial clients. IceWEB
software platforms enable both public and private enterprises to independently manage,
create, publish and deliver information and data easily and affordably. The IceWEB suite
of software products includes IceWEB CMS, IceWEB Studio, IceSHOW, Propster, IceWEB Portal
and Learningstream.com. IceWEB(TM) products and services are available on GSA Contract #
GS-35F-5149H.
CEOCFOinterviews: Mr.
Signorello, how has IceWEB developed under your leadership?
Mr. Signorello: "I came in at the very beginning and
founded the company. Over the last three years, especially after 9/11, we’ve been in
somewhat of a precarious economic environment. However, looking back on it now it actually
was a wonderful time to start a business, because with the market conditions as they were
the competition was less than what it is today. Over the last three years what I’ve
really seen is that as long as you were able to stay around after 9/11, and get through
that recession, I think that the opportunity is big going through the next few years here.
So we were able to start the business, going from ‘0’ in revenue to where we are
today; we’ll finish up this year with $7 million and probably do over $10 million in
revenues next year."
CEOCFOinterviews: Tell us about what IceWEB does.
Mr. Signorello: "IceWEB primarily has been on an
acquisition spree over the last 24 months; we’ve acquired five companies. To be very
specific, we provide integrated enterprise networking and security solutions, content
delivery software and we have a little consulting services group. We sell to small and
medium size business as well as to government enterprises. We do certain products that
we’ve developed over the last couple of years; our content management system, a
framework portal and an online learning portal called LearningStream.com. What you should
see over the course of the next few years is that we are going to put all of these pieces
together into what we call a ‘smart enterprise suite’; IceWEB Smart Enterprise
Suite 3.0. We are what we call a software systems integrator, where 80% of the software is
already developed and then what we do is customize a solution to fit like a glow for
anybody who uses the website in their day to day operations."
CEOCFOinterviews: How do your reach your potential customers?
Mr. Signorello: "Today we try to hit them on all fronts
of marketing, using various search engine tools like Overture, Google and KnowledgeStorm
on the website, to doing what we call deminars of showcasing our products in all different
cities, print advertising and radio advertising. It’s what we call a coordinated
marketing effort and of course we also have our own sales force that handles and outside
business development group and internal telemarketing."
CEOCFOinterviews: How big a segment is the government for you
and why is it a target for you?
Mr. Signorello: "My background is the federal government
as is the case with most of my managers and being in northern Virginia, the federal
government is situated perfectly from where we call the Herndon Technology Corner, in
Herndon, Virginia. So, 50% of our business comes from the federal government and state and
local governments. We have what we call a GSA (General Services Administrative contract)
schedule, whereby we can sell all of our wares on this GSA schedule to anyone in the
federal government. So it’s a big and exciting market for us and we do have the
experience of selling into that space."
CEOCFOinterviews: What do you target on the commercial side;
are there particular industries?
Mr. Signorello: "Currently, we are targeting non-profit
associations and small and medium size businesses. Companies that spend anywhere between
$20 and $50 thousand on a website, that is who we cater to."
CEOCFOinterviews: Why are they choosing IceWEB?
Mr. Signorello: "Our customers are choosing IceWEB
because of the ease of use; it’s that simple – IceWeb is easy and it’s
affordable. With some of our competitors such as PlumTree or Hummingbird Ltd., SAP or IBM
WebSphere, the initial cost can scale into six figures, $150 thousand to $250 thousand to
get going; for a normal small are medium sized business that’s just out of their
budget. Our target consumer is somebody who will likely spend $100 thousand over the
course of a two to three year period and it’s someone that we can get on a recurring
contract, where they are more apt to spend $1 thousand or $2 thousand a month on a web
service as opposed to spending $150 thousand on and upfront cost. One of the biggest
reasons for using us as opposed to our competitors is that it is affordable. Thirdly, we
think that the market is over thought. What I mean by that is that our product tends to be
very easy to install on your network or our customers could use our services in a hosted
environment. Basically, we are able to offer something that a much bigger company can
offer at usually fractions of the cost. To sum it up I would say that not only do we have
experience in our space, what we call the enterprise suite space, the web space, but we
are much more affordable and much easier to learn and to understand how to use the
product."
CEOCFOinterviews: What do you know that allows IceWeb to be
so much more affordable and easy to use?
Mr. Signorello: "That’s a great question. We have
over the course of time evolved into a company that’s based on what the customer
wants, because we’ve been customer driven since day one. What we’ve known since
we first got into the segment is that broadband was not so pervasive as it is today.
Broadband is now prevalent and affordable, so access to video and graphics intensive files
and streaming files, because the internet has changed over the last four or five years. We
were there at the beginning and we were able to make it through to a point where we were
able to evolve with the market space and that’s why now with the experience that we
have with what I call Internet 2. Because we have this experience, we have the software
that’s developed and we’ve going into our new 3.0 version of it, for a company
of our size to compete with a much larger competitor. I think being in this space as long
as we have is really a barrier to entry and we’ve been able to cross that
barrier."
CEOCFOinterviews: Typically, is there a competitive process?
Mr. Signorello: "I would say nine times out of ten there
is a competitive process. So they have to feel confident that we are big enough to deliver
the quality product that they are looking for, yet they’ve also got to feel
comfortable that they are not going to have to spend an arm and a leg to get through the
installation process to help create their website. Most of the time we are the company
that not only can do design work on the front-end, bring in the partnerships that we need,
but we are small enough and flexible enough to provide what I would call a fit like a
glove type of solution."
CEOCFOinterviews: Do you see more acquisitions?
Mr. Signorello: "I see several more acquisitions along
the lines of software development, government contracting type of companies. At this point
we already have the research and development type of companies, so we are looking at a
companies that are going to be cash flow positive and are profitable. Further, I also see
us growing internally as well as externally with acquisitions."
CEOCFOinterviews: Tell us about the security solutions that
you provide, because that’s a real hot topic these days.
Mr. Signorello: "Every customer that comes to us, the
first question they ask is what is it going to take to be secure. What we’ve done is
we aligned ourselves with some of the best of bread products in that area, for example in
RSA security or surf control. We provide what we call a wrapper around any product that we
sell or use our partner to provide a secure VPN, so we can provide secure access to an
internet or an internet portal. Security, especially out on a website today has become a
standard de facto. We are not the manufacturer of the secure software or hardware, but we
are a general contractor of it."
CEOCFOinterviews: You’ve done well quarter over quarter;
what do you anticipate going ahead?
Mr. Signorello: "I tend to give very conservative
estimates going forward. Over the last seven quarters we’ve been able to grow slowly
and because we’re so small I don’t see the growth slowing down going through
2005. However, I think that I can anticipate somewhere in the $7 million here in this year
(2004) and I see going forward with the contract we have in place with the federal and
local governments, I see $10 million in 2005 as a pretty feasible number without an
acquisition. Beyond that it’s really tough to call at this point."
CEOCFOinterviews: Why the ten for one forward stock split?
Mr. Signorello: "On the Over The Counter Bulletin Board,
we are contending with the same vigorous regulations as Microsoft (NASD: MSFT) and IBM
(NYSE: IBM). It is extremely expensive to stay trading publicly and for us, because our
stock doesn’t trade, we have no liquidity and since we already the financing and
revenue in place we really don’t have to go through financing. We thought the most
important thing was that if we were going to continue to stay public was to at least have
a stock that traded. It was our belief that if we forward split the stock that there would
be more stock out there, which would probably draw the attention to more shareholders. We
are trying to expand our shareholder base. I would say that the ten to one forward split
can be compared to a megaphone and that is still our way of saying to the public, hey look
we’re here. Continuing to spend theses various amounts on the legal and professional
fees for such a small company like ours is just absolutely devastating especially for a
company like ours that follows all of the rules. We do all of the filings and we have a
substantial growing business; we just felt that trading 10, 20, 30 thousand shares a day,
roughly at 20 to 30 cents a share a day, $9 hundred to $1 thousand a day the risk reward
just didn’t make sense at these levels. So we thought that it was in the best
interest of the shareholder as well as the market to see if we couldn’t broaden our
marketability with this forward 10 for one split."
CEOCFOinterviews: What should potential investors know that
they don’t realize at first glance?
Mr. Signorello: "I think that it’s absolutely
critical that anyone investing in this company know that it’s a pretty substantial
risk as compared to the reward. However, I believe that the upside with the base of
revenue here and the space that we are in with the software products is an extremely
exciting space that is still in its infancy, the internet. Number one, I think that
investors should know that we are in a great space. Number two, they need to take a look
at the price of the stock in relation to what some of our competitors are doing in this
area and they will see that our value at these levels and these price levels is an
extremely low price, considering the space that we are in and the growth potential that we
have. I think that the most important thing is that we have not yet, to this date done
anything in the form of atoxic financing. What I mean by that is that the company is able
to stand on its own based on the balance sheet, based on the financials and based on the
fundamentals of the corporation. We are able to get conventional financing, so our debt
that we brought down is a conventional debt, it’s a prime plus one bank line through
Comerica Bank (NYSE: CMA) Here in this office we can expand our credit base up to $25
million, without having to do anything that is going to hurt the shareholder in the
immediate and the long-term future of the company. So if you that that combined with some
seasoned management, some great people, great space, an inexpensive stock considering what
the revenues are over a quarter to quarter basis, we could exceed our market cap in
revenue at this time next year. So I think that it’s important for an investor to
know that."
CEOCFOinterviews: What is your focus as CEO?
Mr. Signorello: "A good part of my day is spent doing
whatever it takes to keep vendors, customers, employees and shareholders happy. Other
parts of my day are spent in management and motivation of our management team, as well as
setting strategy, vision and direction for the company in the short term as well as the
long term."
CEOCFOinterviews: In closing, could you touch on your last
acquisition, DevElements?
Mr. Signorello: "I think that is really critical to
where we are going in the future. Bringing DevElements into the fold gave us the one
important ingredient or spice that was missing from the sauce. With their software
engineers and their designers and portal framework we are really going to be able to make
up some time in exploiting this small to medium size business area and this space in the
smart enterprise suite according to Gartner. So I think that it was an exciting
acquisition. I’d like to finish off by saying that over the last twenty-four months
we’ve somehow on a shoestring budget been able to keep expenses in line and without
diluting the stock we’ve been able to integrate five companies. That is attributable
not to me, but to our world class management team that is really poised for success in the
future."
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