Future bright for Manchester software company
MANCHESTER - Software company Newforma is positioning itself to take advantage of a brightening construction industry by raising money from investors to accelerate hiring.
The Elm Street company - which helps architects, engineers and construction companies manage and share information more easily - hired 60 people in the past year and expects to hire that many again in the next 12 months, essentially doubling its worldwide workforce from 130 to about 250.
After three years of decline, the industry has come back to life, CEO Ian Howell said Thursday.
"Customers are ringing us for the first time in three years, and saying, 'Can we have 10 more licenses please? We just added 10 people,'" Howell said. "We haven't seen that for a very long time."
The privately held company, which was chased from its Millyard location by the Mother's Day flood of 2006, raised an undisclosed amount of money from investors last summer to boost hiring quicker than orders otherwise would have dictated.
"That's our response to the fthat
that the industry's come back to life," Howell said. "Customers have got project pipelines, and we wanted to be sure that we are well positioned, so we went back to our investors in August last year, saying, 'Hey, we can see that the head winds are slowing, and we may even have some wind in our sails, let's set the spinnaker (a type of sail) and go really hard and really fast."
Newforma is hiring and training workers so it is prepared if the construction industry sees a continued upswing, Howell said.
Hitting double milestone
The company celebrated a big day last Monday, on Cinco de Mayo, marking its 10th anniversary and when three company executives - Howell, Dave Plunkett and Bob Batcheler - were honored by the New Hampshire High Technology Council as entrepreneurs of the year.
The company's initial round of financing "came into our bank account on Cinco de Mayo 2004, so we've chosen that to be the company's birthday, and every Cinco de Mayo we celebrate our birthday," Howell said.
"We celebrated (in 2004) because we started getting paid again," joked Plunkett, a co-founder and current executive vice president of development.
The company initially was conceived in a conference room across from the State House in 2003, and initial startup cash was pledged based on the experience of the founding team, many of whom worked at either Autodesk or Softdesk.
"We did not have a single line of code; we didn't have a prototype; we had no software," Howell said.
"The pitch was would you please give us the money so we can go hire the engineers, so we can write the code because here's the product idea, here's 130 customers you can call who really want that product. That was essentially the business model," he said.
Starting with simple plan
The company's first product was simple enough: help manage the endless stream of paperwork generated in an architect or engineering company.
"We index everything that's on their company network and allow them to search it just like you would search the Internet using Google," Howell said. In the past seven years, Newforma has indexed 2.9 billion documents.
A company buys an enterprise license for all its workers based on the company's workforce size. The annual subscription can run from $15,000 to hundred of thousands of dollars.
"We have to earn your business every single year," Howell said.
Nearly 100,000 people in more than 1,000 companies worldwide are authorized to use the Newforma software through enterprise licenses.
Plunkett said the renewal rate is 98 percent, a figure they trumpet to obtain new clients.
With acquisition of a Denver company, Attolist, Newforma now can put all the documents involved in a construction project in the cloud, so architects, engineers, contractors and subcontractors can all access and share information.
Hosting fees vary from $5,000 for a small project to a "couple hundred thousand dollars" for something much larger, such as a hospital construction project, Howell said.
Another acquisition, Tap Tapas of Portland, Maine, has helped fuel the company's work in making information available on tablets and smartphones, providing more convenience to clients and saving time and money.
"It's really taking the company for a single stream of revenue to three streams of revenue as part of how we're going to sort of fund our future growth," Howell said.
Over each of the past three years, the company has seen revenue gains of around 30 percent.
"We ran the business to cash-flow break right through the recession, so every dollar that we were able to generate we put back into the business," he said.
Harvey Construction in Bedford used the Newforma software at an architect's request during a $10 million-plus project to renovate Phillips Hall at Phillips Exeter Academy in 2012.
Harvey will use it in another PEA project this summer.
"One can say the project management system, Newforma, really helped organize" the various parties and tasks associated with that project, said Rob Prunier, Harvey's executive vice president.
Batcheler, a company co-founder and now executive vice president of strategy, was in Dallas on Thursday talking to potential customers on a "building the future" networking tour that executives are hosting in 11 cities, including San Francisco and San Diego this week.
"I'm pretty sure we pushed a couple across the line" in Dallas to buy Newforma software, Batcheler said by phone.
About half of Newforma's 190 employees work out of 1750 Elm St. Today, it counts offices in Dubai, Singapore, London and Sydney.
"Maybe in our wildest dreams we hoped for global success," Plunkett said, thinking back to the earliest meetings. "But 10 years ago, we were worried about the first customer, shipping any product at all."