Roger Bushell, director, vitalSoftware

CRN: How have you been going with vitalSoftware?

Bushell: Pretty good. When we launched it, we started in a retail-based environment and it quickly became obvious that there was corporate interest in the product. We started to get law firms picking it up. We had to take a deep breath and establish a corporate environment. Now we are totally a systems integration group as well as being a software developer - to the point where we've moved upmarket from the people that just want to upgrade Outlook to being a full CRM system where we can go out and compete against some of the higher end products like Microsoft CRM for example.

A lot of development has also been done on a case-by-case basis, which we then are able to incorporate in the finished product. We'll go on forever developing the product with new enhancements.

CRN: Tell me about the history of Tracker.

Bushell: I bought Tracker in 1992. I then went to live in Minneapolis for 18 months to run Tracker in the USA. In 1995-96 we took it from nothing to do $10 million to $12 million a year. I then took it public on the Vancouver Stock Exchange. We raised money and went into five or six countries. We were acquired by a competitor [Maximizer] who wanted to get into Australia and they subsequently dropped the whole Tracker branding out of the market, which was surprising to me at the time.

With the funds from there, Computer Hardware of Australia (CHA) came along and I partnered with a couple of people and we bought CHA, which was a regional Toshiba distie. We went from $15 million to $100 million a year.

At the time Ingram Micro came into the country, CHS Electronics (a US-based distributor) came in and had a go at us. They did actually buy us and then they hit the deck themselves.

It was late 1999, the CHS deal fell through and we never fully recovered from that acquisition. And then the dotcom thing happened and CHA's cash flows got hit so hard because credit got tighter. I'd never been in a business that was contracting. Parallel to this I was thinking 'CHA doesn't have a future'. That's when I started thinking about ContactTracker and I knew the original developers of Tracker. We got back together and started kicking off another environment. Paul Dodd [original Tracker developer] came up with a strategy for developing under Windows 2000 and XP and he'd really sussed out what our competitors were doing and gone on from there.

So CHA started to fall, banks pulled in and vultures gathered. It just became too hard. Steve [Rust] from Ingram threw us a good lifebelt and took over Toshiba distribution. He took me on and all the staff.

CRN: What are the main features of ContactTracker these days?

Bushell: In its real basic form it's a contact manager. I used to be involved with a company called Tracker and we went public. Tracker was a simpler environment then - and about 60,000 Tracker copies went out in various means around the world. This was up until about 1996.

The company got acquired by a competitor. This is why we came back as vitalSoftware - the competitor came in and dropped the whole branding out of the market. And as CHA developed [Bushell was a director of distributor Computer Hardware of Australia] it became obvious that when you're working at 3 percent gross product [in distribution], I was considering doing this [selling Tracker] and I would have done it through CHA if things had been different. The product was based around the old Tracker scenario, which is multiple contacts, by company. Then we bought out the new version which links into Microsoft Office, so it uses word processing, links into Outlook contact and calendar and it's SQL-based. You can add documents to it and it tracks all your emails.

Rather than being user-based email management, this is company-wide or contact wide. We've got asset tracking as well where we link to third party databases - the MYOBs et cetera. Fuji-Xerox, for example, tracks all the photocopiers sold, Telstra Stores tracks all the mobile phones sold. That asset tracking environment is probably our strongest competitive edge.

CRN: How many customers have you picked up?

Bushell: We picked up Smorgon Steel early on. A lot of these used to be the old Tracker users. We made a couple of announcements that we were back and there was some pent up demand from the past. And surprisingly enough some of these old copies were lying in some pretty big corporates, which we didn't even realise.

We've gone from strength to strength, we're doing a million [dollars] plus and we're doing some pretty serious corporate selling now. That's from a zero base - we didn't spend a tonne of money, it was all done on a very low budget but we've been able to get good people and consultants and gone from there. Our biggest customer is the ANZ Bank. They're using it for their lead generation, they have about 300 copies.

CRN: Are doing all that through the channel or direct?

Bushell: We're doing a lot through the channel from the other side - for example, when somebody's got a back-end financial system and has come to us to work together. All the Telstra and Fuji-Xerox stuff is done with channel partners. It's a full one-solution sell, and going through partners is the way that we will develop over the years. We started off in distribution but had to take a deep breath and go, 'Whoa - hold on, let's go back and sell direct and start nurturing good channel partners'.

Even though we talk to the [distributors], the first thing that happened there [when the product was sold through Ingram] was suddenly our retail price got hit. Suddenly our price point had disappeared and system integrators were saying 'there's no money in it!' We have to work with people [resellers] that can hold the price. We want to develop another 15 to 20 integrators in Australia.

CRN: Who are you using at the moment?

Bushell: Our main partner is Signature Software; we're just starting to work with Brennan IT. [City Software in Melbourne and Hyperdriven in Sydney are also partners.] We tend to be where you get some sort of vertical where we can train, get them up to speed and they can see it's a good value add to their product set.

CRN: How do you compare what you're doing these days to your days at CHA?

Bushell: It's very different. Where's it's great is the contact database. I'm working with Toshiba at the moment from the old CHA days. They got us into the National Australia Bank. Where it works for Toshiba is sometimes they have trouble getting into a site but they can put the badge on there and say 'Hey I've got some CRM software do you want to talk to us about that?' It gives them another string to their bow.

We're working on about 30 corporate customers together and I go out with their corporate sales rep and we do [a bundle]. That's something that's developing quite well. It's totally different. Under distribution the sales cycle was about 20 minutes. Now I can be six, seven, eight months into a decision and not being the most patient bloke on the planet I've had to adapt to a long-term sales cycle.

High margin - being a developer the margins are infinitely better. I'm on a low cash flow business whereas I used to have a high cash flow. Getting a handle on your business when you're at startup is so much easier when you take over a business and it's going at a million miles an hour and you've got to pay millions of dollars in bank bills every month.

Also staff, you've got to take on staff with a higher skill set and you have to do a far more consultative sell. It's a lot harder but it's far more rewarding because once you start the process with a corporate it keeps moving.

CRN: Do you miss distribution?

Bushell: I miss all the networking opportunities that there were with distribution - the vendors that you dealt with, I miss that a little. At CHA I never really got involved in selling - I was only really involved in purchasing. It was vendor relationships, I never met a customer. Whereas here, it's definitely [about] customer relationships.

CRN: What are your thoughts on the Ingram/Tech Pac merger?

Bushell: The Tech Pac/Ingram partnership is so powerful. There's always been a competitor to Tech Pac. If this combined entity can get their information flow through the website, they could just wack their costs.

From the point of view of buying from a distie, you just want to know what it is, have they got it in stock and if it will be delivered tomorrow.

CRN: You've got a UK office - how are sales going over there now?

Bushell: Tracker used to be in the UK as well - they've picked up the same deals [over there]. And just recently we picked up a really neat Italian distributor, Walter Cassini, and they have a network developed based on movies and they have come into software. We've just done an Italian version. That's turning out to be a top relationship.

CRN: Do you have much time outside of work these days?

Bushell: To be honest I don't find it [vitalSoftware] overly stressful. I feel totally in control of the business. Under CHA it moves so quick, it was like riding a bucking bronco. I'm not going to die of a heart attack I wouldn't have thought.