Sometimes, you need to think smaller in order to think bigger. After almost six years as CFO of global information technology at $3.5 billion stock-exchange operator NYSE Euronext, Krish Venkataraman hopped to a new employer that may presently be only about 2 percent of that size.
Sound crazy? Not really. Now Venkataraman is the CFO of a whole company, and there’s a significant wild-card factor in the potential opportunity in front of him. It is big — as in, Big Data.
The smaller company, Syncsort, is not a new one. In fact it’s more than 40 years old, having started out as a developer of sorting software for mainframe computers. In recent years Syncsort has transformed itself, applying its sorting expertise to Big Data platforms like Hadoop.
The company does not discuss its size, but recent reports by Wikibon and Forbes estimated its revenue at $75 million, all of it derived from Big Data products and services. But its eye is on Big Growth.
What will lead to success for a CFO in the Big Data field? We discussed that with Venkataraman on Thursday, less than two weeks after he took up his new job. An edited transcript of the discussion follows.
Why did you move from a big public company to a small private one?
It’s all about timing. Syncsort is at a critical stage. We are perceiving a very aggressive growth agenda. Having so much data has become a big problem for companies in the past few years, but it also has massive potential.
People are always talking about monetizing their data, but there are few companies and products to help them do it. The Big Data world is very early in its evolution, but there’s going to be a tremendous amount of change, and there will be some really clear winners with valuable strategies for helping companies monetize data.
What experiences are you bringing to the table as the CFO to assist in that mission?
I did not come from a traditional audit background. I understand numbers given my experiences, but I’m not a pure numbers guy. I’m a CFO who understands technology as well as finance, and I know how to be a champion of innovation.
At NYSE Euronext we had almost 2,000 technology engineers. I had a very strong understanding of what they did for a living. When one of them came to me with an idea that would need financing, I didn’t look at it as a cost-line item like some CFOs would. I would look to see if we could create a lucrative investment out of it.
I could really smell a bad investment, but I converted a lot of cost-line items into significant profit lines, using our internal technology to create products and services for companies in our pipeline, like hedge funds and banks. We slowly started becoming more of a combination exchange company and services company.
I also had the pleasure of hitting 24 consecutive quarters of revenue and cost targets during a rough time when the financial world was in disarray.
What’s your biggest priority going to be at Syncsort?
Given my background of helping drive an innovation agenda, I’m here to help the executive team with their strategy. With all the market changes going on in the Big Data world, understanding which markets we should play in, and not play in, is going to be critical.
My understanding of technology will help me know what products we should build in-house and what products or companies we should buy in order to close some of the product gaps. How we go about partnering with other technology companies [to address those gaps] will also be critical.
How much of your growth will be organic, versus acquisitions?
Our board and our CEO [Lonne Jaffe, who joined the company last July] have been very clear. Our strategy will be two-fold. Because technology is changing so dramatically, [Big Data] companies that only play on one side or the other will find it very hard to win.
What should CFOs of non-Big Data companies know about Big Data?
That this evolution is here to stay, and that Big Data is a problem CFOs need to tackle and understand. It hits three critical areas they should be focusing on: innovation, how to maximize revenue from an existing cost base and how to convert traditional cost aspects into revenue generators.
It comes down to two things: your management’s will and your ability to take on the problem. CFOs are used to being champions of the cost story, but now they have the opportunity to convert that to an innovation story. It’s a great evolution for CFOs, and you’ll see a lot of them taking on that challenge very well.