Sunny Gupta

Apptio CEO Sunny Gupta has been talking for some time now about building the next big enterprise software company in the Northwest. On Tuesday, we got some details on just how far the entrepreneur has come in attaining that goal.

Speaking at the WTIA’s TechNW event in Seattle, Gupta noted that Apptio is on course for bookings of $50 million to $60 million this year. (Editor’s note: This post has been corrected to reflect the total bookings at Apptio).

I knew Apptio was growing fast, with the Bellevue company noting at the time of its $20 million venture round last year that it was experiencing year-over-year bookings growth of more than 300 percent. But Gupta’s comment at TechNW was the first time I’d actually heard numbers disclosed for Apptio, which has developed an online system to help CIOs better analyze IT costs.

The scope and size of the four-year-old company, which has grown to 205 employees and raised some $41 million from the likes of Greylock, Madrona and Andreessen Horowitz, is certainly impressive.

To put the $50 million to $60 million run rate in perspective, Zillow — the Seattle online real estate company that completed an initial public offering last July — recorded $27 million in revenue for the first six months of the year. (As a software-as-a-service business, Apptio accounts for revenue on a month-to-month basis rather than when the full deal closes, which is the bookings number. Like many growing SaaS businesses, Apptio’s revenue trails its total bookings).

Bryan Mistele of Inrix, Jeff Seely of Sharebuilder, Sunny Gupta of Apptio and Dave Roberts of PopCap

Of course, Apptio and Zillow share little in common, other than a desire to build category-changing businesses from their Northwest roots. Gupta stressed that desire once again on Tuesday. He was joined on a panel — appropriately titled “How to Build ‘Em Big” — with Inrix CEO Bryan Mistele, former PopCap Games CEO Dave Roberts and former ShareBuilder CEO Jeff Seely.

“We are trying to build something of substantial scale,” Gupta said. “We run our business like we wanted to build a great product, a great market, a great new category as opposed to thinking about an exit.”

Gupta has been on the go-big-or-go-home campaign for some time now, telling GeekWire at the Seattle 2.0 Awards in May that building the next big IT company in the Northwest will have a “move-the-needle type of impact.”

On Tuesday, Gupta echoed those comments. “From the get go, I felt like: ‘Hey, there’s an opportunity cost, you got to really think big.’ Because, if you don’t think big, it is hard to build a big business.”

He continued:

“But, along the way, we were also trying to be realistic. Because sometimes you can think big, but you may not have the right product-market fit, you may not be able to attract the right kind capitalization and so forth, and in that case you may have to change trajectories a little bit. In our case, we were thinking really big. And we felt like we wanted to build a free-standing public company. We have a long way to go to achieve that vision, but we are on the path.”

Previously on GeekWire: Inrix CEO: Seattle tech scene gets solid A (with one exception)Sujal Patel’s call to action for the Seattle tech community

Comments

  • Bill

    Is Apptio counting one year of revenue as bookings or are they counting the term of an agreement as bookings, which could be three years of revenue? Great growth either way.

    • Richard H

      Under SaaS you typically ‘book’ the total value of an agreement with a customer. So a customer that agrees to take your service for twelve months at a price of $100k per month will show a booking of $1.2m at the time the agreement is signed. However, the year in which that shows as revenue depends on when the booking took place. If it happened in the last month of the financial year then the revenue will not show until the next financial year.

      You could estimate revenue very roughly by saying on average customers will book for 12 months and on average the booking has six months still to go in the current year so $50m in bookings may translate to $25m in revenues for the year in which they were booked – to which you would add the revenues from prior year’s bookings to get the total revenue for the year.

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