It’s not often that a chief executive’s first year in charge coincides with a once-in-a-generation pandemic. But that has been the reality for Informatica CEO Amit Walia, who has juggled the outbreak of Covid with his first year leading a business.
The enterprise cloud data management firm appointed Walia in January 2020. He gave his first UK interview with Verdict in London just weeks before the World Health Organisation formally declared a pandemic.
A lot has changed since then. Technology has redefined the world of work. Ecommerce adoption has soared. Walia has lost the bushy beard.
For any CEO, the first year is a chance to put their stamp on the company and set out its future direction. Walia believes last year in particular was a test of leadership.
“There was obviously a personal journey, being in the CEO role for the first time and navigating the company through such a big global pandemic,” he says over Zoom.
“It tested me. It obviously brings out who you are as a person. I think leadership is not just about leading a business for economic return. I’m a big believer in empathetic leadership.”
Doing business the Covid way
To steer through the workplace challenges posed by Covid, Informatica gave employees an allowance to improve their home working setups, more flexible days off and other wellness benefits. On the communication front Walia started doing regular “all hands” meetings and biweekly business-wide emails.
Most of Informatica’s employees are still working remotely, while the Australia office has reopened. This month Informatica is piloting the reopening of its headquarters at a 10% capacity and, when appropriate, do the same at its other offices in EMEA, the Americas and Asia-Pacific.
Will Informatica make a full return to the office once Covid is over? For Walia – like many tech executives – the future of business is hybrid.
“I don’t believe in either of the extremes,” he says. “I don’t think we will go back to 100% working in the office or 100% working from home. There is no substitute for people interacting.”
While Walia would much rather do business over an espresso in a coffee shop, he says he has been able to have many more meetings over Zoom from the time saved not travelling.
That included making his first acquisition “95% over Zoom.” In June 2020, Informatica bought metadata management business Compact Solutions for an undisclosed sum. Other than the due diligence team visiting the company’s Poland office shortly before Covid sprung, everything from negotiating to introductions was conducted via video software.
“You can do a transaction over Zoom, but an M&A is like a marriage,” he says. “You know you’re going to be with the other person.”
In August, Walia got the chequebook out a second time to snap up GreenBay Technologies, a machine learning business. Are there more acquisitions on the horizon? Walia doesn’t rule it out.
“We don’t do crazy, big acquisitions,” he says. “We are very methodical and diligent about it. We’ve done [acquisitions] regularly every year for the last couple of years. So we keep looking.”
He adds: “Nine and a half times out of ten we say no. So to get to a yes you have to do a lot of hard work.”
Walia remains bullish on revenue goal
When we last spoke Walia had an ambitious goal for Informatica – to double its revenue levels from when the business was taken private in 2015.
That goal was made before Covid landed a sucker punch to the global economy. Despite this, Walia’s goal remains the same.
“Digital transformation continued to grow unabated,” he says, explaining that the pandemic has accelerated the rate at which companies embraced the cloud and other digital tools.
This, says Walia, translated into more demand for Informatica’s products, which include data visualisation, data masking and data replica solutions.
“I did not meet a single company that said to me ‘I’m going to slow down [our] digital transformation’ or data management as a part of it. Not a single company,” he adds.
Even companies in the hardest-hit sectors show no sign of slowing down their technology spend, according to Walia’s experience.
In April 2020, he was “shocked” when “one of the largest airline companies in the US” bought Informatica’s data governance solutions – despite all its flights being grounded and haemorrhaging cash.
The customer, according to Walia, said it continued with the investment because it knew travel would resume eventually and wanted to be better equipped when that day came.
“Some may spend a lot, some may spend a little, but everybody was accelerating their digital transformation,” he says.
Over the past five years Informatica has switched from selling its software on a licence basis to a cloud subscription model. In 2020 the business completed this transition and now draws “pretty much 100%” of net new business revenue from subscriptions.
In Informatica’s last year as a public company, it reported overall revenues of $1.05bn. According to its own figures shared with Verdict, Informatica’s 2020 annual subscription revenue stood at $594m – a 26% increase on 2019.
Overall annual recurring revenue in 2020 totalled $1.15bn, with the difference made up from maintenance costs, professional services and other legacy revenues. Between 2018 and 2020 Informatica’s subscription revenue has grown at a compound annualised growth rate of 40%.
“That’s one of the big changes any software company has to go through, of bringing licensing down and growing subscription,” he explains.
However, total revenue at Informatica is “more than $1.3bn”, which suggests only a modest increase from the fiscal year 2019 revenue, and that Walia has a lot of work ahead to meet his goal of passing the $2bn mark next year.
Walia sees cloud partnerships with the likes of AWS, Microsoft Azure, Google Cloud and others as a key part of Informatica’s business strategy.
“Customers choose many of these providers, but they want us to be able to manage their data across these platforms, and that’s why we continue to invest heavily in these cloud partnerships.”
For his second year in charge, Walia plans to continue riding the digital transformation wave and fully launch Informatica’s new cloud data management platform by the end of 2021. He also plans to continue expanding into new markets around the world.
“Needless to say, [the pandemic] was a complete curveball for all of us,” Walia says. “But I’d say where our customers are going, where the market is going, it has been a blessing in disguise.”