Netezza is the leading data warehouse appliance vendor. Its products enable companies to analyze data at incredibly high speeds
while minimizing power consumption.
How a first-time CEO managed two successful companies through a series of dramatic changes.
In 1984 Jitendra “Jit” Saxena was running software development at Data General. The software industry was still nascent, and companies such as Microsoft and Oracle were not yet public. “I had an idea for writing software for open systems. I thought it was going to be the next big wave in computing so I left the company to pursue it,” he says.
Jit founded Applix, which created graphics software as well as a spreadsheet and word processor. He raised capital from a few firms including Matrix Partners, and Paul Ferri, founder of Matrix, joined the board.
The business started out strong, but a number of things did not go according to plan. The market did not develop as expected. Jit founded the company thinking Unix would become the standard operating system for the desktop. However the PC became the dominant desktop model, and Unix was relegated to a niche market.
As a result, Microsoft and Lotus, the leading makers of word processing software on PCs, took off. Whenever Microsoft or Lotus came out with new features for Word or Notes, Applix had to scramble to build a comparable offering on Unix.
“It is very hard for a small company to keep up with that level of competition. The bar kept getting higher and higher, and the company was struggling,” says Paul.
One by one, all of the initial venture investors in Applix lost interest in the company and left the board. Paul was the only venture capitalist who remained on the board and followed through on his commitment. Paul helped Jit recruit new talent, as well as find non-traditional financing so that Applix would have the resources it needed to affect a turnaround. Meanwhile, Jit overhauled the management team and led them to rebuild and reposition the product.
“If you don’t have the support of your investors and the flexibility to change your strategy after you realize you are going in the wrong direction, it can destroy your company,” says Jit. “Very few startups get a second chance.”
Jit was successful in resuscitating the company, and took it public in 1994. Paul advised him to begin planning for the day when he would someday retire, and they recruited a new president who would take over when Jit was ready to step down. Jit continued to run the company until the year 2000 when he became chairman.
After only a few months of leaving Applix, Jit was back to the entrepreneurial white board. He decided that rather than focus strictly on software this time, he would integrate hardware and software in an all-in-one appliance that would handle processing, memory and storage. When Jit was ready to fund the business, the first call he made was to Paul at Matrix Partners.
“Paul stayed on my board for sixteen years,” says Jit. “We went through a lot together, building not only a successful company, but a trusted bond and a long-term relationship.”
Matrix invested in Jit’s new company, dubbed Netezza (Urdu for “results”), in December 2000. “Partnering with Jit a second time was a no-brainer,” says Paul. “People who have achieved great things will always find a way to be successful, no matter the challenges.”
Jit’s resiliency was tested a second time. Just as Netezza introduced its new data-warehousing appliance, the tech market crashed, and few enterprises that could afford million-dollar appliances were willing risk buying mission-critical technology from a startup, particularly when established players such as IBM offered alternatives. Paul helped Netezza attract top-tier managers, as well as provide credibility to the young venture, and one by one, Netezza began signing customers such as AT&T Wireless, Amazon.com and Virgin Media.
Netezza continued to grow under Jit’s leadership, and the company went public in 2007. Jit stepped down as chief executive in early 2009, and Jim Baum, whom he brought on as president a few years prior, became chief executive. Paul Ferri remains on the board of directors.
“It takes a lot to create something where nothing existed before,” says Jit. “We have probably created more than $1 billion in salaries over the past twenty years. In order to achieve that, your investors have to believe in you, your customers have to believe in you, and you have to keep at it.”
Netezza is a data warehouse appliance leader, combining storage, processing, database and analytics into a single system that delivers 10-100x the performance, at half the cost and one-third the power of other approaches.
Acquired by IBM for in July 2007.
Applix was the provider of a business analytics platform, allowing enterprise users to access, manage, analyze data from various database inputs.
Matrix Partners Board Members