theCUBE is the world’s leading live interview show covering enterprise tech, innovation and the people who imagine, create and implement the technologies that are changing our world. This year, they joined IFS in Miami for IFS Unleashed 2022. Below is the transcription of an interview with Michael Ouissi, the group’s COO of IFS. Enjoy!
theCube: Hey, welcome back to theCUBE’s coverage from Miami of IFS Unleashed 2022, Lisa Martin here with you. We’ve had great conversations today with IFS execs, customers, partners. Our ecosystem is quite robust and quite strong. And we’ve had some alumni on, I’ve got another alumni who’s back with me, Michael Ouissi, the group’s COO of IFS. Michael, welcome back to theCUBE.
Michael Ouissi: Thanks for having us, my pleasure.
theCube: It’s great to be back in-person.
Michael Ouissi: Absolutely.
theCube: It was great to walk into the keynote this morning and see a full room. I was talking with Darren Roos, your CEO earlier this morning and I said, it must have felt great to walk out on stage and actually see a sea of people and customers and partners who want to engage and get that relationship with IFS just turbocharged.
Michael Ouissi: Absolutely, I mean, it’s been three years, we haven’t had this buzz, this energy, and the opportunity to actually see all our customers and also show our customers who we are, how we are evolving and how we’re becoming a different company over the past four years.
theCube: And it’s impressive what IFS has done in that timeframe. All the conversations I’ve had today, really reflect the strategy, the strong strategy and vision that this company has. But I was looking at some of the financials and saw that your first half of 2022, which ended in June, there was tremendous growth. ARR up 33%, I think they’re recurring revenue is in the 70 percentiles now. Lot of new customers, a lot of of trust that existing customers are showing to the company.
Michael Ouissi: Yeah, absolutely. Look, and I think the secret sauce is that we have focused on where our strengths are, we haven’t gone astray, we haven’t tried to actually capture growth in any other vertical. We are really very religious about where we’re going and there, where we are going, we are going deep, and we really are trying to be the best version of ourselves for our customers and for those customers’ business transformation needs.
theCube: Talk a little bit about that vertical specialization. It’s something that we don’t see very often but throughout all of my conversations today with your executives, IFS executives, with customers, with partners, that domain expertise, really the granularity of the domain expertise is really resonant that IFS has achieved that in those five key verticals in which you have such specialization.
Michael Ouissi: Yeah, look, I mean, I would love to take credit for having been the person who has done that, but IFS has over the past 35 years, really had this very strong focus. But what actually was important when you try to double a business in the space of four years, not to be tempted to go away from that but actually double down on exactly that and see the opportunity in those verticals and make sure that our customers actually are getting the attention and the functionality they deserve.
theCube: Let’s talk about customers. Over 10,000 customers right now. I was also in the keynote this morning where Christian Peterson was sharing that, in its first 18 months, IFS Cloud has over 400,000 users. So, the growth is tremendous. The customer loyalty is ostensible in those verticals. Talk about customers and their influence on the company, the direction the technology goes, the evolution, that kind of stuff.
Michael Ouissi: Yeah, I mean, look, as I said, we are all about the depth of the functionality and that means that we need to listen to our customers, we need to listen what’s going on in the industries. We also need to not just listen, but we need to think forward.
Michael Ouissi: We need to have some thought leadership on what we think is going to emerge and then test that with our customers again. So, our customers are at the core of everything we do. When we engage with a customer, we start with trying to understand their business in depth. We’ve got our own methodology around that, and we don’t just try to push technology onto them, but we are trying to understand what their business drivers are and then actually try to apply technology to what enables them to deliver on those business transformation objectives they’ve got.
theCube: What are some of the changes or the waves that you’ve seen, especially the last couple of years during the pandemic when we saw so many customers pivot, we need to transform digitally to stay alive, and then those that did that well enough to be competitive and to thrive, talk to me about some of the changes as the group’s COO that you’ve seen.
Michael Ouissi: Yeah, so when you go back, I mean, there’s two types of transformation, business and digital transformation but they are the same thing, they’re just a different side of the coin. And when I talk about business transformation, what we’re seeing a lot is, and there’s this big buzzword servitization out there, but customers going service and customers trying to build an end-to-end business that is more viable, more sustainable, more successful in how they develop great moments of service for their customers, that is something we are seeing a lot. And during this business transformation, digital transformation has become a means to that end. And that is something where customers have matured a lot, where in the past we have seen a lot of the IOT, AI, machine learning, cloud, everything was a means or a purpose in itself and that has changed. It’s now become actually a means to an end. It’s become a means to actually deliver a business transformation and a business outcome that is meaningful for their customers.
theCube: Has to be meaningful for their customers. I love how IFS talks about enabling your customers to deliver those moments of service. And when we think of, in our consumer lives, many of us flew here, and you think about what’s the moment of service for an airline? Well, it’s being able to get on that plan on time, have it leave on time and meet my expectations as a demanding consumer. But regardless of if we’re talking about aerospace, energy, manufacturing, engineering, the customers on the other end expect to have an integrated seamless experience that’s not fragmented, that is able to deliver moments of service that then help drive up their revenue. So what IFS is doing is so embedded in what your customers are able to deliver to their customers.
Michael Ouissi: Yeah, absolutely. And look, if you look at all the things that have to come together to actually have a plane taken off at the right point in time or if you take any other examples, but there’s so many things that need to go right. Crew scheduling, you need to have the right crew at the right point in time. You need to have them actually with the right experience to fly the right plane. You need to have airplane maintenance going right to have the plane available at the right point in time and no technical failures and so on and so forth. And we look at that as between customers, the people, and the assets that an organization has, you need to coordinate between all those dimensions in everything you do to make sure that this one moment of service where your plane takes off on time, you actually catch your connecting flight at the other end, that this actually is being delivered. And that’s what drives us, that’s what customers are driving into our product development, into how we embed AI, machine learning and so on in our technology to make it relevant to exactly that moment of service.
theCube: That’s what we as those consumers want. We want relevance, we want personalization, we want that relationship to know who we are and how to serve us best. Let’s dig into the Jotun case study. He was going to join us, our CEO was going to join us, couldn’t make it. Talk to me a little bit about Jotun, what type of business is it and then let’s kind of start unpacking how they’re leveraging IFS technology.
Michael Ouissi: Yeah, so Jotun is the seventh largest paints and coatings manufacturer in the world. And they’ve got obviously a home decoration part of the business, but they’ve got an industrial part of the business where one large part of the business is also a marine’s part. So, they actually provide paints, coating, for all sorts of large ships and it’s quite astonishing what you learn about that customer. I mean, we are now partnering with them for more than 20 years, so we are very intimate with that customer obviously. But when you see all of a sudden, three, four years ago, they started going onto a journey where they looked at apart from paint and coating, what actually can I provide to my customer in the marine industry to actually make their business more efficient, to actually make it easier for them to get a ship from A to B in an efficient way, in a timely way and so on.
And they developed something called Hull Skating Solutions and those Hull Skating Solutions are integrating all sorts of weather data, all sorts of other data and provide them to the marine companies that actually then help them drive this… Well, actually get this ship in a more efficient way from A to B. And at the same time, also where there’s predictions as to when you need to clean that ship, and they’ve got Hull Skating Solutions, which then actually clean the ship automatically as well. So, it’s quite an astonishing thing for a paints and coating manufacturer to then think about what do I need to know about my customer’s business to provide that additional service to my customer? Great solution and great way of dealing with or delivering that great moment of service to their customers.
theCube: Absolutely, the evolution of that business from paint manufacturing into the marine industry is not a stretch based on how you described it, but it’s very innovative. How is IFS enabling them to do that and do it well?
Michael Ouissi: Well, one, they went on a modernization program for all their factories for all these kinds of things that they need to integrate then deliver to their customers. And we are in the central part in being that agile partner that actually delivers those technology solutions that enable them to, well, first of all think about that service, provide that service to their customers and make sure that they run a very efficient, very integrated version of IFS and can actually harmonize globally to make sure that wherever the customer is, they can deliver on that promise.
theCube: Fantastic, let’s talk a little bit about from your team’s perspective, the go to market. We talked about the five verticals in which IFS specializes energy, aerospace and defense, engineering, manufacturing and there’s one I’m missing.
Michael Ouissi: Utilities.
theCube: Utilities, of course.
Michael Ouissi: Yeah.
theCube: In terms of the domain expertise, are there vertical teams that are focused? I imagine that there are, talk to me a little bit about that specialization from that lens.
Michael Ouissi: So obviously, I mean, there are so many dimensions. There’s our sales teams, there’s our pre-sales teams, there’s our industry teams which actually are working with the customers on receiving their feedback, on actually providing thought leadership and then organizing the feedback loop into our development teams who are providing these solutions then that hopefully our customers will cherish. So, we are very specialized in that respect. We are driving the industry specialization. We’ve got a complete aerospace and defense business unit. We are in the market unit, specializing in the industries where we work in the various different territories with just those industry teams. We’ve got specialization in the pre-sales teams. So, we take that really deep down and very seriously to make sure that whenever we talk to a customer, we also have the understanding and we have also got the curiosity to understand more of the customer’s business, and that is something that is part of the IFS DNA.
theCube: It’s a differentiating part of IFS’ DNA that not only having the domain expertise, and a lot of people talk about, well, we got to meet the customer where they are, wherever they are digitally, wherever they are in business transformation. But you’re actually talking the customer’s language.
Michael Ouissi: Yeah.
theCube: By industry, which I would imagine really helps to not only solidify that relationship, but you actually get to really do a double click and get much more tightly connected with the customers and the outcomes that they’re wanting to achieve so that those moments of service happen.
Michael Ouissi: Well, that’s so true. And actually, this is not just while we are selling to the customers, but it’s actually throughout the whole life cycle of this application and the technology in Jotun’s case more than two decades. And we’ve got a lot of customers who are actually that long with us because we don’t run away once we’ve implemented a solution, but we actually stay close to it because first of all, we want to learn from our customers continuously. We want to actually give to our customers also what we are learning outside of the conversations we have with these customers. And we make sure that these customers continuously evolve how they think about their business, how they think about the application of our technology and then in turn, we can actually develop technology again, for their use cases.
theCube: It’s a flywheel.
Michael Ouissi: It’s a complete flywheel and that creates loyalty.
Michael Ouissi: That actually creates the longstanding relationships we have with many, many of our customers, yeah.
theCube: I was speaking with a number of your executives, Marne Martin was here, and we were talking about brand recognition and the loyalty, but that intimate customer knowledge that IFS really works hard to gain with its customers. ‘Cause as consumers, we bleed into our business lives and we have very little tolerance, very little patience. I think that was one of the things in COVID that went away. People were just not tolerating this rapid change and we had no choice. But I don’t know that patience is going to come back at the level in which we experienced it before COVID. So, customers expect businesses and brands to know them and help anticipate what’s next for me, how do I get there? And it sounds to me like IFS has really nailed that from a customer relationship perspective.
Michael Ouissi: As I said, I mean it’s really part of our DNA and we try to preserve that culture while we’re doubling our business and hopefully, doubling our business in the next three years again, because that is really the secret sauce to being that successful, and not only with our existing customers, but also with the net new customers. And we are driving almost 50% of our revenue, which is very, very much a benchmark in the industry from net new customers that we’re winning while we’re actually keeping or staying close to our existing customers and try to apply that knowledge to our net new customers.
Michael Ouissi: But it’s something that we absolutely have to preserve to be as successful as we’ve been in the past four years, also in the next four years.
theCube: So, coming off a great first half in the summer, when I teased Darren, “Any nuggets you want to say?” He said financials for Q3 are coming out in the next couple of weeks. And I said, I imagine that trajectory is up and to the right.
Michael Ouissi: Yeah.
theCube: What are some of the things, Michael, that excite you for where you’ve seen this company go in your time there and the rocket ship that it seems to be on today?
Michael Ouissi: Yeah, look, I mean, what’s amazing to me is… And if I look back, I joined four and a half years ago, and only the first one and a half years were under normal circumstances.
Michael Ouissi: The other three years were a major pandemic, now a major war and recession and we’ve got all sorts of economic and macroeconomic headwinds. And what what impresses me about the company, about our customers, about our employees is the resilience we’ve got to just carry on with what we’re doing. And I mean, I don’t give too much away when I say we had a pretty good Q3 as well, and we are looking forward to a really good 2022 as a full year, and there are no excuses that actually the organization makes, it has just taken along. And we are facing the economic headwinds and we are going through that time hugely successful. And I’m very optimistic about the year and about 2023 as much.
theCube: Fantastic, it’s kind of hard to believe that calendar year 2023 is literally around the corner. But Michael, it’s been great having you on theCUBE. Thank you for coming back, talking about what’s going on at IFS from the overall COO’s perspective, the customer synergies that IFS has, the work that you do to really get granular in those industries, it’s impressive and congratulations on the success. We’ll have to have you back next year to talk about what else is new.
Michael Ouissi: Thank you very much, Lisa.
theCube: All right, my pleasure.
Michael Ouissi: Thank you.
theCube: For Michael Ouissi, I’m Lisa Martin, you’re watching theCUBE’s coverage live from Miami on the show floor of IFS Unleashed. We’ll be back with our final guest in just a minute. (soft music)
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