FireSpout, Inc. is not a familiar company to most of us, but the Belmont, Massachusetts-based company was founded in 1999. It has spent the last 2 years quietly developing its software and working with beta customers in somewhat of a stealth mode. Now it has officially announced its core product, FireSpout ETL Engine Version 2.0; spent the last several weeks briefing analysts and press; and in essence, launched the company as well. In addition, the company reported the closing of its Series B round of financing totaling $5 million.
In its announcement, FireSpout is calling itself "the ETL for Enterprise Content company." According to Bob Craig, FireSpout's vice president of marketing, the company is borrowing terminology from the transaction-processing and data-warehousing worlds in expressing how it works with content. The ETL process, for Extract/Transform/Load, when applied to the database world, transforms structured content to another format to allow queries. Craig says that FireSpout is delivering a new category of software that does the ETL process on unstructured content for enterprises.
The FireSpout software extracts unstructured enterprise content from Web sites and text file systems (including word-processing files and Adobe PDF) and analyzes it using a machine learning system. The technology then transforms it into a structured XML format that makes it easier for users to identify and locate relevant content. The content can then be loaded into a variety of distribution environments, including search engines, enterprise portals, online publishing tools, and customer-management applications, using industry-standard interfaces.
The software analyzes a file or Web page in the context of other files on the site and uses a collection of over 100 gigabytes of content from SilverPlatter as its machine learning database. FireSpout also works with customers during testing and installation to add industry or site-specific information to improve output quality. After analyzing and determining patterns, concepts, and relevance; scoring the content; and generating the XML content, the software's FireLinks technology then dynamically adds the distilled content to a site, such as a generated title or key sentences, and can add action buttons, such as go, save, help, or purchase.
"FireSpout is squarely addressing the burgeoning market need for technologies that increase usability despite the rapidly increasing volume of unstructured enterprise content. Through our unique ETL technology, FireSpout helps companies distinguish relevant information from noise in their unstructured content," said Simon Dao, CEO of FireSpout. "In effect, the FireSpout ETL Engine provides leading global companies with a content infrastructure solution to successfully leverage the full value of their unstructured data."
You might notice the repeated use of "unstructured" in Dao's comment. In the press announcement, this is actually used seven times in the first four paragraphs. The FireSpout technology is not designed to work with fielded data but to analyze words, though it can handle context, frequency, positioning, proximity, and patterns, etc. Customers with specific document formats and requirements would work with FireSpout staff when doing their individual site customization to accommodate these needs.
The company currently has one paying customer, ZDNet. Craig indicated that it has a number of industry-leading companies now acting as beta sites, including a global provider of online news feeds, a global investment banking firm, and a national government agency. He said FireSpout expects to announce additional key customers in the next few weeks.
The company's horizontal markets include not only enterprise information portals and Web search portals, but also Web commerce sites and customer service and self-service applications. Targeted vertical markets include online publishing, high-tech, government, pharmaceutical, medical, legal, and financial services.
Craig said that the company's licensing model is based on the number of documents that will be handled by the system. He noted that the average base license would cost about $150,000 to $200,000 a year, and would include their professional services, support, and training the ETL Engine for the site.
The additional capital investment of $5 million came from FireSpout's lead investor group, Boston CommonAngels (http://www.commonangels.com), and several private individual investors. This latest round of funding will be used to expand technology developments, drive national sales and marketing efforts, and extend the company's partner channel. Boston CommonAngels is a group of 50 leading private investors and three-dozen limited partners who have founded and managed high-tech companies in New England. In addition to this latest funding, CommonAngels led FireSpout's Series A round early this year that netted approximately $3.5 million.
This is certainly a tough economic climate in which to launch a new company, though the need for accessing and managing enterprise content is certainly a key area for potential growth. The announcement from FireSpout cites a Yankee Group report that predicts the amount of unstructured information stored in computers will grow by 200 percent a year into the foreseeable future. In addition, IDC Research predicts that Fortune 500 companies will lose $31.5 billion by 2003 due to duplicated work combined with an inability for employees to find the information they need to succeed at their jobs. Looks like these companies will be crying out for a solution. However, FireSpout faces certain competition from other companies in the enterprise content space, including Inxight, Applied Semantics (formerly Oingo), and Invention Machine. And, these days, a company needs to have more than a good or even excellent product—it needs to do everything else right as well.