SpiritSoft, by its CEO’s own admission, does not do anything new. “We’re focusing on an already mature market,” Kevin Gibbs explains. “Instead of a new idea that we have to explain to everyone, the idea has already been around a number of years.”
The London-based company’s ‘old’ idea is Java messaging. Standards for sending messages between Java programs have been around more or less since Java’s creation in the mid-1990s, but SpiritSoft uses those standards for enterprise application integration (EAI). In common with other EAI vendors, it has ‘adaptors’ that create interfaces to applications, connecting them to a message broker that mediates and redirects messages to other applications. The differentiator, says Gibbs, is that his company’s technology is accessible to Java developers using standard techniques.
Using SpiritSoft’s software, developers with no specialised training can integrate applications in a few days, he claims. The SpiritSoft broker is also capable of handling messages from other messaging applications, such as IBM’s MQ Series and Tibco’s TIB bus. Says Gibbs: “If we went into Goldman Sachs and told them they’d have to rip out their messaging systems in favour of ours, they’d show us to the door… after they’d stopped laughing.”
SpiritSoft, originally a consultancy, developed its technology as part of a project for Nomura, the Japanese investment bank. Although not initially focused on finance, SpiritSoft found messaging in widespread use in the financial services market, removing the need to educate potential clients.
To take the product forward, the company raised £2.5 million (€4m) from venture capitalists in 1999. It raised a further £8 million (€12.7m) at the end of 2000 to expand into North America. SpiritSoft now has a roster of about 90 clients including Amazon.com, the online retailer. Its revenues are up 50% from 2001, and the company is set to break even in the first quarter of 2003.
The company may be focused on old ideas, but new ones remain a threat. Gibbs, however, believes that new communication and integration technologies are not yet ready as a competitor. “Web services is not guaranteed. It’s not secure. If you’re doing a $10 million trade, you have to know it’s got there and it’s gone quickly. If it’s not got through, why hasn’t it? You can’t tell with web services.”
But as web services technology becomes mature, SpiritSoft may have to find a new selling point to differentiate itself.