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Visiphor is addressing a
huge and pervasive problem in the Law Enforcement, Healthcare and Financial Services
industries where there is a need for an integrated view of disparate data across many of
the existing information systems
Technology
Business Process Integration
(VIS-TSX)
Visiphor Corporation
1100 – 4710 Kingsway
Burnaby, BC Canada V5H 4M2
Phone: 604-684-2449
Roy Trivett
President, CEO
and Director
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
September 14, 2006
BIO:
Roy Trivett, President / CEO / Director
Mr. Trivett has been a Director of Visiphor since March 2002, and in July of 2003 he was
appointed President and Chief Executive Officer. Mr. Trivett has an extensive
entrepreneurial background and has achieved notable success in hardware and software
industries. He brings a wealth of experience in building and operating successful software
companies, including co-founding and expanding Architel Systems Corporation into an
international telecommunications software company that was acquired by Nortel Networks for
in excess of $600 million. Mr. Trivett is a Professional Engineer and holds a Masters
degree in systems engineering from Carleton University.
Company Profile:
Visiphor software products and services deliver practical, rapidly deployable solutions
that integrate business processes and databases. The company’s solutions focus on
disparate process and data management problems that exist in government, law enforcement,
security, health care and financial services. Using industry standard Web Services and
Service Oriented Architecture (SOA), Visiphor delivers a secure and economical approach to
true, real-time application interoperability.
The company’s flagship product, referred to as the Briyante Integration Environment
(BIE), has a production-proven ability to reduce the time, complexity, and risk associated
with defining, implementing, and supporting integrated access to physically and
technologically disparate computers and datasets. The broad ranging applicability of BIE
into a variety of areas (e.g. health care, financial services, government services,
telecommunications, etc.) has been clearly demonstrated by highly successful deployments
in the United States and Canada. Visiphor systems are utilized in Canada, the United
Kingdom, United States, Mexico and the Far East. The company is a Microsoft Gold Certified
Partner.
CEOCFO: Mr. Trivett, what is your vision and what attracted
you to the company?
Mr. Trivett: “When I came to the company it had a strong
focus and reputation in delivering functionality applications to the law enforcement
community. It had faltered a bit with a focus that it had on facial recognition technology
and when I looked at it, as you may recall there was a biometrics bubble that brought a
lot of interest after 9/11 into that space. The facial recognition technology that the
company had was world-class and was very promising, but people were having a lot of
trouble figuring out how to make it useful in user applications. As a consequence, the
company was not generating the kind of revenues that it thought that it should have, given
all the interest around that technology. I noticed that an even bigger problem associated
with the use of that technology and other things that were going on in law enforcement,
related to the fact that data that you needed to drive useful applications was split up
amongst many disparate data forces within the law enforcement community. As an example, in
the United States, there are 18,000 distinct law enforcement agencies and each and every
one of those has their own isolated records management system to keep track of incidences
that are occurring in their respective jurisdiction. That was a huge problem and it
limited the ability to apply even facial recognition because the mug shots were spread out
among many different systems in many situations. We identified this problem and thought
that if we could come up with a solution to that problem, then there would be a much
greater value proposition to the customer base. We identified in turn, another company
that had built some technology to solve that problem.
My first vision was to bring the two companies together, the law enforcement specialized
company and the data integration company. We would then go forward with a new capability
to go out and solve that problem for law enforcement, which in turn would generate
revenues and bring value to some of the other technologies that the company had in the
facial technology arena. We completed the merger of the companies that had those
technologies by the end of 2003, and that was my first initiative as CEO of this company.
We embarked in 2004, as a start-up with a new business plan. The business plan was to go
out and solve the disparate integration problem for the law enforcement community, but
keeping in mind that this problem is pervasive and virtually every industry that you look
at has this problem, particularly in healthcare, financial services and many others. We
were going to focus on our area of expertise; our subject matter expertise internally was
in law enforcement. We brought this new expanded solution delivery capability to that
market. We did $1.1 million worth of revenue against this new business plan in 2004; we
did $3.3 million in 2005 and we have done reported audited results for the first quarter
of this year for around $2.3 million dollars and we are on track for the year to deliver
$8 to $10 million dollars. That is a significant revenue growth pattern. We are improving
profitability and expect break-even results by the end of the year. Our vision is to solve
the very pervasive disparate data integration problem across all of the verticals that I
have mentioned.”
CEOCFO: Is there much
competition?
Mr. Trivett: “There is growing competition in this space
for sure. One of the catch lines that we use to describe our approach to solving the
problem is that we are embracing what the industry is coming to call Service Oriented
Architecture (SOA). What that means is that we are using the industry standards such as
web services to go out and build information-sharing networks that conform to these
standards. We go about the solution to the problem in a way that addresses many of the
problems that have existed in the past, with initiatives that have been undertaken to
address the problem. The traditional kind of approach is to use data warehouses and a lot
of the companies in our space that would be competitors, embrace that kind of an
architectural philosophy and solution. Our particular approach does not involve building a
physical centralized data warehouse, it gives our customers the ability to have
distributed virtual warehousing and in so doing addresses many of the problems that the
solution providers have had in the past with respect to data ownership issues and the need
for real-time data in many of the application.
Competitors in the space include IBM (NYSE: IBM) the big systems integrators and other
people all profess to provide solutions to these problems. By-and-large the solutions have
been fraught with problems. Case in point, the FBI last year cancelled a project to build
a data warehouse for case management after it had spent $180 million trying to build it.
It failed for some of the reasons that I just mentioned in terms of the architectural
flaws with building data warehouses. We have been out successfully deploying this type of
an architectural solution for distributed virtual warehousing for a number of years now.
We have repeatedly demonstrated that it works. We are now seeing other companies come into
that space, so in a sense, we have kind of defined it. Gartner Group (Gartner, Inc.-NYSE:
IT & ITB) recently identified a major area in the integration arena called Enterprise
Information Integration, or EII, which speaks to the sweet spot for our product
line.”
CEOCFO: How do you reach
your potential customer and how do you decide whom to target?
Mr. Trivett: “We solved the disparate database problem
and what that means is that our customer base is disparate as well, which presents obvious
sales and marketing types of problems. We have addressed that by targeting specific areas.
We have key anchor accounts in King County Washington, here in home territory British
Columbia with Prime Corporation, in Contra Costa County California, and the east coast in
Charlotte/Mecklenburg County in North Carolina. We reference those into new initiatives
that we find out about or who find us, because now we will come up on web searches for
people that provide disparate data integration solutions. There is the web marketing,
direct contact marketing by our sales force; we also have a partner strategy and we are
aligning ourselves with the law enforcement sector as an example with some of the
companies that are currently providing application solutions to those 18,000 agencies.
Virtually all of those agencies are actively looking for ways to solve what they view as
their most pressing problem and that is integration of information. Our partners represent
a channel for us through to those people and we find out through our partner channel where
there are projects kicking off to solve the problem and we will go in and join with them.
We are also working with some of the big SIs like Computer Sciences Corporation (NYSE:
CSC), Lockheed Martin Corporation (NYSE: LMT), The Boeing Company (NYSE: BA) and others.
Although we do not have formal agreements with them, we are in the process of looking at
opportunities that we can work on together.”
CEOCFO: What is the
revenue model and what are you selling?
Mr. Trivett: “We sell a combination of things. The
target revenue model is across the various verticals that we will address with our
products and services, so we have a products and services model. The target revenue
breakdown would be 50% for our product licenses; so that is a very high margin business,
and 30% would come from services contracts and I should add that those services contracts
would be highly specialized services that would command a higher margin. That will be
profitable business as well, but not as profitable as the license revenue. The final
component will be a recurring maintenance fee that would add up from the license fees that
we sell over the years. Each of our product license fee contracts carries with it a 20%
recurring revenue that goes on year after year. That is the product services maintenance
profile for the revenues. We are addressing certain verticals and our expectation is that
our two largest verticals will be law enforcement and healthcare. We are also looking at
financial services, the oil and gas patch and government services and other interesting
and potentially lucrative vertical application markets for our markets for our
technology.”
CEOCFO: Will you tell us
about your ‘software factories’ R&D effort?
Mr. Trivett: “The issue in delivering complete solutions
is that there is a value chain that you have to complete for your potential customer and
the value chain starts with the realization that there is a set of disparate data in the
enterprise or across enterprises that are sharing information amongst themselves that have
a lot of value in them. You need a technology that allows you to go in and retrieve that
value from the various disparate locations in a unified standard space way. At the end,
you need a way to display and use the data and make it useful from a human consumption
point-of-view. We have identified that in order to be effective in delivering against the
whole value chain, which deals with those three important links, is the identification of
where the data is, the ability to retrieve it, and the ability to see it and use it. There
is also a lot of room for improvement in the adaptability of the user interface layer. We
identified this project to go out and allow us to build on the notion of ‘software
factories’ so that we can rapidly deliver configurable applications that consume and
use the data from a user perspective. We are very active in that area and we have some
promising internal early results on how we can deliver and make the data useful,
configurable, and manageable from the user level. The ultimate idea is to remove the
dependence on having complex programming activities in that loop. The ultimate would be
that if you let a disparate data network and you can see and use and manage the data in
that disparate data network through an excel spreadsheet.”
CEOCFO: How much of your
efforts are involved in R&D?
Mr. Trivett: “I have been around this industry for a
long time and I believe today that this company has in my opinion one of the most
visionary chief technical officers that I have had the pleasure of working with over the
various companies that I have been involved with. We have a lot of ideas about things we
can do that are novel, patentable, and paradigm shift in a way in terms of how one goes
about developing and delivering value to the end users of software technology. We have a
great vision that involves us going out and making a difference of how people get at,
deliver, and consume data within the enterprise of government. Therefore, we are working
on a number of things and I don’t want to get into too much of an account, but I want
to give you a sense of what we are doing on the ‘software factory’ user
interface front. We are being innovative in other areas that are important to the
effective delivery and use of disparate data in the areas of trust. If you are going to be
providing the disparate trust data, there has to be effective trust mechanisms built into
the delivery mechanisms. It is a very complex area. We are on the leading edge and as
advanced as anybody in the world. We will continue to be there because of the investment
that we are making in these areas going forward.”
CEOCFO: Is the
international component important for you outside of North America?
Mr. Trivett: “Our focus is in North America. We
inherited some activity in the UK from the law enforcement application facial recognition
era of the company. However, that activity subsided. We continued to be interested in the
European network and how we convey the reputation and activity in the UK to go forward. We
are also interested in China and Asia and see that as a high growth opportunity, but
complex to sell to; so we are making very modest investments in those markets.”
CEOCFO: Is reaching the
investment community a focus?
Mr. Trivett: “If we could be faulted for anything, we
have not done a great job with our investor relations program. I have spent a fair amount
of time there addressing groups of investors. We have been quite successful in raising the
money that we need to build and sustain the business, but we have not been successful
building sufficient investor interest to have a stock price today that reflects the value
of our business. I think it is a great opportunity for investors right now. The stock
price that we have is a byproduct of the fact that we have not done a great job with
investor relations. It is something that we are focused on now and we will be doing a much
better job going forward.”
CEOCFO: What do
potential investors miss about Visiphor that they should know?
Mr. Trivett: “The ones that come in have been drawn in
by the fact that we are in the right place and the right time with the right technology.
We have a technology that addresses a huge and pervasive problem in many industries that
are focused on finding solutions for this problem: Healthcare, for example, wants an
integrated health record. Law enforcement wants an integrated view of disparate data
across many of the information systems that exist in that area. Financial services need a
way to get consolidated views of worldwide data. There is a great need for what we do, and
we do it as well – if not better – than anyone else in the world. We are smaller
and haven’t gotten two of the critical mass that I think is important for rapid
sustained referential growth.
What I think investors have been missing about the way we have performed is the fact that
we have performed and done what we said we would do. We have rapid revenue growth and we
have demonstrated that we are creating the business that will be profitable by the end of
the year. In rough terms, a 1, 3, $8 million revenue growth over three years if it is only
$8 million this year, which is the low end of what we are projecting, is pretty
impressive. I do not think that people are looking closely enough that we are in the right
place at the right time with the right technology. We have the right team in place. We are
performing against the revenue and performance numbers that we said we would. There has
been a lot of interest in the last year in the energy sector and I think that has taken a
lot of tension away from the high-tech sector. People just have not been looking for
high-tech opportunities, so interest has drifted. I see now a resurgence in interest. The
energy sector opportunities are starting to soften and fall back. I think it is a great
time for people to look at alternative investment strategies. Most everyone I have talked
to thinks high-tech is going to resurge. It is a great time to get in. The readership of
this article is getting an advantage because this is the place where there should be some
growth.”
CEOCFO: Any final
thoughts?
Mr. Trivett: “We have a great team and a new entry as
the result of the acquisition that we did last fall of a company that specialized in the
healthcare industry, which is part of our strategy to expand our reach from the law
enforcement focus into the healthcare arena. We are starting to get some traction there
and delivering revenues. We are recognized as one of the leading providers of architecture
consulting services for the healthcare industry in British Columbia. We have projects in
the US and other parts of Canada. We are active in Washington State, Maryland, Ontario and
Alaska. We are on the go with our Healthcare plan. That opportunity space could deliver
explosive growth.”
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