Had Gerry Smith been a football or hockey star in high school rather than a good pole vaulter, the software entrepreneur might not be preparing to be honored tonight at a University of Toronto engineering department gala dinner.
Smith’s excellent math and science grades made his father point him in the direction of engineering. But the coach of the Canadian national pole vaulting team was also the coach of the UofT team, and thought the best place for him to be an engineer was there.
An IT executive with two software companies under his belt – one of which sold for $146 million — Smith is one of three people being inducted into the university’s engineering alumni hall of distinction for his accomplishments.
Although he graduated in 1987 as a mechanical engineer, he assumes he’s not for being honoured for working on smokestacks, as he did early in his career.
Rather, he thinks it’s for once being on the country’s Top 40 executives under 40 list, for co-founding and building a professional services software automation company, ChangePoint Corp. into a business big enough to be bought by Compuware in 2004, and for turning around Cirba Inc., which makes software that automates the efficient allocation of virtual machines in data centres.
Smith is CEO and co-owner of Cirba, which now has 125 employees throughout Canada, the U.S. and Europe. Customers include TD Bank, IBM, Cisco Systems, Dell, Bank of America and FedEx.
A genial man, it’s easy to believe him when he says, “I’m a very independent person — I like to sell, I like to talk, I like to present. Add that to solutions that help customers and you’ve got the formation of a software company.”
Although computer programming was part of his engineering training, He didn’t start out aiming for a career in IT, though. After graduating he worked for a year for Fibreglass Canada, then to an engineering firm for five years as a consulting engineer working on everything from water treatment plants to smokestacks.
But at night he and a friend were coding away on software, hoping, as he says, to be the next Bill Gates.
Instead, tired of working for someone else he and three others formed ChangePoint in 1992. It grew to 350 people, had customers ranging from Microsoft to MasterCard. It was sold in 2004 for $146 million to Compuware, which recently spun it out to a private equity firm.
He stayed to help integrate ChangePoint into Compuware, then left to play golf and help venture capital companies meet IT companies that needed money. Among the people he met were Andrew Hillier and Riyaz Somani, co-founders of Cirba, at the time a small company trying to build configuration management software.
Ultimately a VC was willing to put money into Cirba under one condition: Smith become an active member of the board. Instead he became CEO and a co-owner.
Within weeks of joining he realized the market for configuration management software was already consolidating and Cirba needed a new focus. “A lot of effort can be spent if you come up with a quick idea and try to market it too quickly,” he says. “So we spent a lot of time refining and refining how we present, who we present to, what’s our value proposition.”
Eventually applying analytics to making infrastructure more efficient was the new target.
As a man who talks to a lot of CIOs, he understands what causes them pain, including having to maintain their existing infrastructure and staff who aren’t interested in making things more efficient.
“You go in and you say (to IT staff) ‘We can save you 40 per cent,’ and you’d think they’d hug you. But they don’t care because it’s not their money. You go up to a CIO and they hug you.”
CIOs are also overwhelmed by the complexities of the systems they oversee and want help. “It’s a learning experience for me as a software guy to go in and pitch,” he says. “Dummy it down. Simplify. You want to talk about some nuance … (But) first of all you’ve got to say ‘we’re going to simplify your life’ That’s what they want to hear.”
As for why many Canadian IT companies are small, he repeats what others say: We’re too conservative. No Canadian would have funded Uber, he says, whose mobile app allows private car owners to work as taxis.
Cirba now is in good shape, he says, although not regularly profitable. His goal for the next year is to double revenue, increase staff, make the company profitable every quarter.
“I’m pretty aggressive, we want to grow … I could be making money (profit). I could downsize the company and then I’m making money because I got some great recurring long term huge customers — but I want to own the world. So I’m going to spend a little more, take some venture capital and grow.”
“I love building and growing a company I love building a software solution where success is a company signing a cheque. I’m happy seeing the company grow for the next three or five years. After that I don’t know.”