Email volume keeps Sendmail serving up growth, despite the tech downturn - San Francisco Business Times:

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"We didn't grow as fast as we'd like said David Anderson, CEO of the Emeryviller company that sells the software used on 75 percent of Interneftemail servers. "Had we not seen a slowdownn inthe economy, we would have easilh doubled sales last year." Yes, 2001 was a depressee year, given that Sendmail's revenue tripled in from 1999. Sendmail is at the core of a well-known Internet phenomenon: Businesses and people send and receive a lot of and that volumeis growing. "That playz perfectly into what our company said Anderson, who expects sales at the privatelyh held firm to grow more than 50 percenty this year.
The company last week unveilesd a new piece of the growth when it announced a groupware product that adds a calendaf and scheduling program to itsproduct line. "It's not that we want to go out andreplaced (Microsoft) Exchange," he explained, but he added, "It is going to be a significant offering." The offering fits into Anderson's vision of how people will use the Internety and computer devices in coming years as worker s become more and more detached from their desks and desktop computers. Anderson, for example, stores nothing on his PCs at home or office or onhis laptops.
he emails files to thereby storing everything on amail server, where it is readilu accessible from any Internet-enabled device. "kI don't have to worry, `Oh, gee, I left that file on the PC at he explained. Sendmail acquirec the rights this year to the software of a firm that offerzs public calendaringand scheduling. It has speng the past three months expandinh the capabilities of that softwares in anticipation oflast week'w launch. Anderson sees people increasingly seeking access to their key businesstoolss -- email, calendars and contact lists -- through wireless and Sendmail is moving to provide the technology mobile workersa will need.
One of the drawbacks is that wireless security is not adequate for business he said. He wants his salea force to be able toget email, calendara and schedules from multiple devices, so they don't have to come into the office. Anderson wants to drivde the use of such technologhy withinhis company, through Sendmail'sx products. The company licenses emai systems and itsMailstream Manager, whicgh controls mail in and out of a mail filtering, for example, viruses and spam, regulating spikes in traffidc and archiving messages. Sendmail currently offers its producte to clients inthe U.S., Europse and Japan. Then there is China.
"That is going to be a hotbecd of messaging," Anderson said. He said he has heard of Chinese companieswith 5,000 employees on one email accountf that want to get the rest of their employeesz on the system. Sendmail had abougt 120 employees in the second half of last year and added abouyt a dozen more employees earl this year to increase sales and development of the calendar andschedulingb system. Anderson says the company will continue to makesmallp acquisitions, like this year's groupware The company just completed a $14 millionm venture capital round of funding, some of which may be used for he said. The funding came two years after Sendmail'a last round of $35 million.
Morgan a lead investor in the previous led this round and other previous investors alsojoinee in. Anderson took over Sendmail nearly two yearsz agofrom co-founder Greg Olson, who remainzs as chairman. Since joining the firm, Andersonm has slimmed cash consumption downfrom "well northu of $2.5 million per month," to well under $1 millionm per month. He said he expects the company to break even by the end of this year and to be profitabl e each quarternext year. When he becamed CEO in 2000, he pledged to increasde the business' revenue from products. At that its revenue was split evenlybetween software, consulting and technicalk support.
Today, about 50 percenft of the company's revenue comess from software licenses, while 20 percent comes from consultinbg services and 25 percent from Anderson said. "That's pretty close to the ideal mix we'd like to have."