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IQNavigator attacks new verticals

By Alex Goldman on July 10, 2009 2:54 PM

Any company that has had 33 consecutive quarters of revenue growth has to be doing right. For IQNavigator and John Raeder, Jr., its president and CEO, that would be offering software as a service, or SaaS (define).

The company has offered a SaaS platform for private markets (a concept not unlike what Ariba was designed to offer) since its inception in 1999. I has adapted to market conditions, helping companies manage hiring sprees during the boom, helping them manage outsourcing and the SLAs attached to outsourcing initiatives (such as offshore call centers) from 2001 to 2005, and it is now helping companies manage their most valuable contractors, the lawyers and consultants.

"Companies know their head count, and they know the amount of money they spend on PCs, but they don't know what they spend on services," Raeder told InternetNews.com. "There is no software or team assigned to manage the delivery of services."

IQNavigator helps companies make sure that services contractors are adhering to their SLAs by incorporating those rules into its software. In addition, it offers a double-blind benchmark, allowing companies to see whether they're getting as good a deal as their competitors.

The company focuses on the largest enterprises. It takes a percentage of their annual services budget as a fee. Raeder said that on average, customers save $5 million to $10 million per year with IQNavigator. Customers include Home Depot, Alcatel-Lucent, and Accenture.

"We pioneered a business model ten years back that didn't require us to extract large licensing fees," said Raeder.

"We charge the supplier firms, and take a percentage of their revenues," he explained. "The suppliers like it because they get paid in 30 to 45 days."

Law firms and consulting firms may not want to be in a market where their fee structures are easily examined. "We are lifting the cloak down to pay rates," said Raeder.

He added that while Accenture is a customer, it is not eager to become a supplier, and have its fees scrutinized. "They are incentivized to seek ugly, bodacious SAP and Oracle implementations; we are incentivized to get in and get out," he said.

Raeder worked at Oracle before founding IQNavigator, as did Salesforce's CEO Benioff. Raeder said that IQNavigator has benefited from Salesforce's massive and constant marketing of the SaaS concept. "We have drafted behind the Benioff PR machine," Raeder said.

He added that IQNavigator runs on Oracle and that its CTO also came from Oracle. "Our CTO John Martin was an original Oracle kernel developer and designed IQ Navigator to be a truly multi-tenant SaaS platform," he said.

Raeder said that IQNavigator's customers don't leave, and that given low churn and continuing profits, the company is looking to grow by acquisition as well as through organic growth. The company recently raised $200 million and therefore has the means for making acquisitions.

"I expect IQNavigator to be a billion dollar company based on rational valuations," Raeder said.

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