October 31, 2003

Xaffire smoothes wrinkles in network applications

SUPERIOR — If you’ve ever abandoned a virtual shopping cart before clicking the “charge” button, you’re not alone. Both Boston-based industry analyst firm Boston Consulting Group and online-rating company BizRate.com estimate about one-third of attempted online purchases fail.

Even worse, if you’ve ever had to call a company’s help desk because its Web site was slow or down, you’re actually in the majority. According to a July Network World/Packeteer survey, 73 percent of companies first learn about Web performance problems from end-user calls to the help desk.

Xaffire Inc. to the rescue.

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Superior-based Xaffire is an application performance management company that measures network performance and helps information technology staff members fix the problems inherent in running applications over networks.

Xaffire was founded by entrepreneurial wunderkind Rich Schmelzer. The company president and chief executive has founded and sold six high-tech companies during his career. His most recent success was the $75 million sale of Boulder-based Worldprints.com to the now-defunct Excite in 2000.

Application performance management is an area of software and services that has taken off during the past few years.

As more companies rely on Web-based applications to perform more business processes, keeping those applications running smoothly becomes more important to the bottom line. But as those applications become more complicated — negotiating a complex web of application servers, Web servers, database servers and legacy mainframe computers that runs over a tangled worldwide network — managing them becomes complicated, time-consuming and expensive.

“It’s an area that’s getting a lot of attention because companies are needing to assure and improve performance of online applications,´ said Audrey Rasmussen, vice president of Boulder-based analyst firm Enterprise Management Associates. There are a lot of players and a lot of competition, she said.

Competition doesn’t scare Schmelzer, because he says he’s focusing on a niche that most of the big boys –Sunnyvale, Calif.-based Mercury Interactive, Palo Alto, Calif.-based HP OpenView, Houston’s BMC Software Inc., Islandia, N.Y.-based Computer Associates International, Inc. and Austin, Texas-based IBM Tivoli — aren’t addressing.

Xaffire is targeting the small- to medium-size e-commerce player.

“We fill a niche that is poorly served,´ said Tom Ohlsson, vice president of marketing. Xaffire’s target market includes regional banking, travel, local retail and other companies that have Web sites that might have two to 12 concurrent users, Ohlsson said. The Xaffire solution costs between $25,000 and $100,000, while the big-boy solutions can’t be had for less than $1 million, he said.

Xaffire came to be as a result of the April merger of Boulder-based Alignment Software and Austin, Texas-based Matrix NetSystems Inc. Alignment Software had an application management software product that identified and diagnosed problems in complex distributed application environments, and Matrix had a product that measured and optimized Internet performance. Both companies needed an influx of cash to continue operations, Ohlsson said.

“A board member of one of the companies knew a board member of the other company who represented two different VC firms. A couple of phone calls were made, and it seemed this could be a good mix,” he said.

The two-heads-are-better-than-one approach successfully raised $13 million from Superior-based Mobius Venture Capital and Denver-based Meritage Private Equity Funds.

The company’s flagship product, xFire 2.2, works by tracking “synthetic transactions” that simulate what a real user would do on a Web site. Ohlsson used the example of an online bicycle parts store where “you want to make sure your store is always open for business,” he said. An information technology staffer logs into xFire and creates a synthetic transaction — say, someone trying to buy a bicycle seat. Then she asks xFire to test the transaction by sending it to the bike shop’s Web site from one or more of Xaffire’s remote “transaction beacons.” Beacons are located in San Francisco, Los Angeles, Chicago, New York and Atlanta, and more are being added, Ohlsson said.

The synthetic transaction measures performance from the bike part shopper’s perspective. If there’s a problem, xFire provides an alert and “root cause analysis” — what the problem is, where it’s occurring and how to fix it — to the IT staff person. Proactive monitoring and repair should result in fewer end-user calls to the bicycle parts store’s help desk, Ohlsson said.

The next version, xFire 3.0, is “the next logical step,” Ohlsson said. “If you can run synthetic transactions, why not capture actual ones?” Rather than monitoring synthetic transactions, xFire 3.0 will monitor genuine end-user transactions. “It’s like when you call a help desk, and it says, ‘This call may be monitored for quality assurance,'” Ohlsson said. It should not only create a better Web experience, but allow merchants to comply with IRS or Commerce Department regulations requiring monitored transactions, he said. xFire 3.0 should launch the first quarter of 2004.

Xaffire has about 15 paying customers and should reach the $1.5 million to $2 million revenue mark by the end of the year, Ohlsson said. The company employs about 36 people, split evenly between Superior and Austin.

Schmelzer isn’t ready to discuss an exit strategy, yet. “I’m committed to delivering a successful company,” Schmelzer said. “We’re built to last, not to flip.”

Xaffire Inc.

100 Superior Plaza Way

Suite 200

Superior, CO 80027

(303) 642-4450

www.xaffire.com

Contact Caron Schwartz Ellis at (303) 440-4950 or e-mail csellis@bcbr.com.

SUPERIOR — If you’ve ever abandoned a virtual shopping cart before clicking the “charge” button, you’re not alone. Both Boston-based industry analyst firm Boston Consulting Group and online-rating company BizRate.com estimate about one-third of attempted online purchases fail.

Even worse, if you’ve ever had to call a company’s help desk because its Web site was slow or down, you’re actually in the majority. According to a July Network World/Packeteer survey, 73 percent of companies first learn about Web performance problems from end-user calls to the help desk.

Xaffire Inc. to the rescue.

Superior-based Xaffire is an application performance management company that…

Christopher Wood
Christopher Wood is editor and publisher of BizWest, a regional business journal covering Boulder, Broomfield, Larimer and Weld counties. Wood co-founded the Northern Colorado Business Report in 1995 and served as publisher of the Boulder County Business Report until the two publications were merged to form BizWest in 2014. From 1990 to 1995, Wood served as reporter and managing editor of the Denver Business Journal. He is a Marine Corps veteran and a graduate of the University of Colorado Boulder. He has won numerous awards from the Colorado Press Association, Society of Professional Journalists and the Alliance of Area Business Publishers.
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