Jim Clark arrived at Martello as the publicly traded company, which makes software that enhances the performance of cloud-based business applications, was mired in a sales funk.
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If Jim Clark was looking for new career challenges, he’s certainly encountered his share of them since moving to the National Capital Region four years ago.
Just as the world was coming to grips with a global pandemic, the executive who’d spent most of his career in the Greater Toronto Area relocated to Ottawa in 2020 to assume the role of senior vice-president of finance at Gatineau-based cannabis producer Hexo.
Two years later, he was on the move again as the company went through a major upheaval that included the departure of co-founder and original CEO Sebastien St-Louis.Â
Clark – whose career has included stints as a senior finance executive at IT consulting giant CGI and payment processing provider Symcor – immediately returned to the tech sector as CFO of Kanata-based Martello Technologies to replace Erin Crowe, who left to take on a similar role at the Ottawa Senators.
It’s been an interesting ride to say the least.Â
Clark arrived at Martello as the publicly traded company, which makes software that enhances the performance of cloud-based business applications, was mired in a sales funk.
While revenues boomed during the pandemic when demand for its wireless network troubleshooting products soared, Martello has struggled to maintain momentum.Â
Its revenues declined two per cent year-over-year in the most recent quarter as sales gains in its emerging Vantage DX product line for Microsoft Teams users failed to offset losses in legacy products that Martello is phasing out.
Four months ago, Clark’s career took another twist. Martello chief executive John Proctor left the firm after six years at the helm, and Clark stepped in to replace him on an interim basis.Â
The Concordia University commerce alumnus hasn't wasted any time putting his stamp on the business. OBJ caught up to Clark this week to find out why he thinks Martello can turn things around and how he’s trying to help the company get back on track.
This is an edited transcript of that conversation.Â
OBJ: What’s your overall outlook on Martello’s future?
JC: The opportunity is fantastic. The appetite to provide any type of tools to help (managed service providers) or IT teams in large companies manage their employees’ unified communications experience is growing rapidly. And I don’t think it’s going to stop. The interesting part, and we’re just starting to get into it, is how AI is going to play into the digital experience monitoring space. In some people’s minds, (AI) is going to be bigger than the invention of the internet. We’ve identified some specific areas where AI is going to definitely complement our feature set and help our clients. We have some pretty exciting areas that we’re just starting to delve into, and we’ve had discussions with some AI experts and they’re going to come back with a proposal. So we’re definitely looking deep into the AI opportunity.
OBJ: What sorts of changes are you implementing to help the company take advantage of those opportunities?
JC: (Martello) is founded really on Mitel and Mitel performance analytics. The strategic direction years ago was to say let’s do that with Microsoft Teams, and it was a great wagon to hitch to because Microsoft Teams exploded. I believe they're over 300, 320 million users. It’s just exponential growth, and they’re putting a lot of pressure on the competition. We’ve brought in excellent new talent in terms of channel partner leadership and product marketing. I’m in the throes of bringing in some new product-specific people. Our demand-generation team has been revamped, and we’re using different expert vendors to help us with search engine optimization, our website.Â
There's a tremendous amount of change, and all the early indications are it’s driving what we need – which is always towards growth. The good news is the Mitel partners are pulling on us right now. They want Vantage, because their customers are not just Mitel customers. Those customers have all kinds of technology, and a lot of it is Microsoft-based. If a Mitel partner has a customer that needs support for Teams, we’re going to be selling them our Vantage solution to help them. We’ll be able to work both sides.
Right now, we’re in this zone where we’re making a tremendous amount of changes. I’m not a sit-still type of person. That’s building the energy in the company. I think people are pretty excited.
OBJ: What is your No. 1 priority at the moment?
JC: The objective to me is really (fuelling) growth (of Vantage). It’s going to be about the absolute annual recurring revenue growth. Obviously, the retention of your existing revenue is just as important, but the markets, in my view and according to (Todd Coupland, an analyst with CIBC Capital Markets who recently discussed the SaaS market with Clark), are going to look at that net new growth on your benchmark product as the leading indicator. They’re not going to look at your cash, they’re not going to look at your EBITDA, they’re going to look at that (ARR) growth, because that’s where we are in the market. They’re basically saying, ‘You should spend to grow right now, because it’s probably going to help you a year or two out.’
OBJ: What would you say to investors who are wondering when Martello is going to start seeing significant revenue growth again?
JC: I challenge the team and myself constantly with this. The Mitel business still remains our largest component – it makes up 45 per cent of our revenues, and it’s been very steady. And now we’re seeing growing interest in (Vantage DX). That’s a base with good growth opportunities. Mitel acquired Unify, and whenever a company of that size acquires somebody of their same size, it sends them into a transition period. We're continuing to work with them, and the Mitel partners are champing at the bit. So we’re lining up more capacity to meet with those partners and actually start building out their service offering around our (Vantage) solution. So that’s good news.
We’re now being extremely calculated in who we want to partner with. If the value isn’t there and they don’t see it, we’ll take a pass. Vantage growth is strong. The legacy products … still represent a pretty good chunk of the business, but they’re sunsetting. So that drag is what we need to outstrip through Vantage growth. I’m pushing extremely hard to make sure that the inflection point of net accretive growth between the legacy (products) and (Vantage) is coming soon. We’re going to hold ourselves more accountable. I’m very confident that we’re going to get the growth that the market needs to see to make us an attractive investment.
OBJ: Martello went through a major round of layoffs and other cost-cutting almost two years ago. Do you expect to start hiring on a large scale again soon?
JC: We’ve actually brought in new blood that we feel is much closer to our SaaS solution and how we need to market and sell it. The board is quite excited. They’re starting to feel much more energized about the (market) opportunities. I was tasked, along with the executive team, with (answering the question), ‘If you had additional resources, what would you do with them?’ That should be an indicator that the board is now looking at opening up those doors once the business case is validated.
