Analyze this | A Portland technology firm brings a whole new dimension to forecasting
Photo/David A. Rodgers
Peter Murray, co-founder of Portland technology firm Quantrix, says his company's software allows users to focus more on business and less on debugging spreadsheets
It’s been eight years since Peter Murray and Chris Houle founded Quantrix, a technology company in Portland that develops business modeling and analytics software to help companies with financial, risk and other planning. The company started by targeting the financial services sector, recruiting customers from the ranks of big Wall Street investors and Fortune 500 companies, which helped Quantrix increase its sales sevenfold from 2004 to today, according to Houle, the company’s CEO.
But as the financial services sector took a dive last year, Quantrix watched its target market shrink and decided to move fast. The company has started offering new tools — such as ways to track and compare past and future business performance — to help attract customers from other markets, including the business and mortgage sectors. Though the company “certainly felt the effects of the contraction” as some of its financial customers started receiving federal bailouts, its ability to diversify has allowed it to increase sales in other areas, says Murray, the company’s chief technology officer. “We just completed our best January on record,” he says. Houle said the company’s revenue is between $1 million and $5 million.
The company’s recent work has caught the attention of local and national industry leaders. In 2008, TechMaine, the industry trade group, named Murray its CxO of the Year, citing his “technical expertise, combined with his ongoing efforts to promote and advance Maine’s technology community.” And this year, Intelligent Enterprise magazine named Quantrix one of 36 companies nationwide to watch in its 2009 Editors’ Choice Awards in its performance management category for the company’s work helping businesses make future projections.
In his Fore Street office, Murray sidles up to his double-monitor computer and demonstrates just how the Quantrix Modeler works. At first, the program looks similar to Microsoft Excel, a two-dimensional spreadsheet with lettered columns and numbered rows. But then, Murray begins plugging in data. He renames the columns and rows to reflect their real-world designations – Quarter, Sales and Total, for example. He writes formulas in a pane at the bottom of the screen instead of in the cells themselves, which makes them easy to see and follow. He adds more variables – Year, Region, Type of Product – and the program carries the formulas through without having to copy and paste the formulas into each cell. Murray then uses the mouse to easily reorganize the data by any variable, without having to retype the formulas or manually cut and paste the cells. The program is multidimensional, Murray explains, making it more effective and versatile than Excel and reducing the chance for errors.
The program helps companies see how changing dynamics in the marketplace and their own businesses would affect future growth in less time and with less effort than traditional spreadsheet technology, according to Murray. One of Quantrix’s customers, an investment bank, used to spend three weeks every quarter updating its 20 25-megabyte Excel spreadsheets of real estate holdings, a cumbersome process that tied up four employees. The Quantrix Modeler reduced the information to one five-megabyte file that was easily updated by one person in one day’s time, freeing the staff to focus on business development and “more interesting things than banging their heads against Excel,” says Murray.
Software with multiple applications
Houle and Murray joined forces after being introduced through venture capitalists. Houle had just moved to Maine with his wife and children after spending 11 years running Scala, an enterprise resource planning software company based in Amsterdam. Murray, a Portland High School graduate, had already started working on a prototype of what would become the Quantrix Modeler, a project inspired by his two-year stint as CTO of the now-defunct Portland-based business-to-business seafood startup Gofish.com, where he watched the CFO and accountants toil over Excel spreadsheets long into the night as they prepped for board meetings. “It seemed like there was an opportunity to take a look at modern software and hardware and create something that would allow the user to focus more on the business problems and less on debugging spreadsheets, a tool that would allow them to do more with the technology available today,” Murray says.
The pair financed the company through a combination of angel investment, Maine Technology Institute grants and their own personal investment, and launched their first version in 2002. Since then, they’ve released three major revisions and eight minor ones, and are in the process of releasing version 3.2. Since then, Quantrix has grown to serve 750 customers in 50 countries, says Houle. Though a big portion of the company’s customers are financial analysts, the software is also used by engineering, retail and telecommunications professionals. “There’s even a guy in England who says he has used it to more accurately model the first few nanoseconds of the Big Bang,” Murray says.
The struggles of the financial sector have led to a decrease in Quantrix’s work for the industry, from about 60% of its portfolio in 2007 to 40% in 2008, according to Houle. Though the rocky economy has shaken up some of the company’s usual markets, businesses’ need to better predict future growth amid ever-changing conditions has helped to boost Quantrix’s sales. “Managers and executives aren’t comfortable with the static applications they’ve been using in the past, and they need a more dynamic, flexible way to do modeling,” Houle says.
The housing bust has opened up a new market for Quantrix. The company has started doing mortgage modeling that will show how mortgage loan portfolios would perform over time based on various changes to the economy, and recently signed two new customers in that area. As a marketing tool to show off the software’s capabilities, the company also plans to launch a website based on this model that will allow people to enter their information to see what kind of mortgage they could afford and how they could renegotiate a delinquent mortgage. In 2008, Quantrix’s sales in the mortgage arena tripled from 2007, and though it likely won’t increase that much again this year, Houle says he expects that area to continue to grow.
The company also plans to introduce new products this year, including high-speed analytics software to go along with the Quantrix Modeler that will allow businesses to analyze large quantities of data even faster. Despite the recession and the challenges of attracting venture capital in Maine, Houle and Murray are optimistic that Quantrix will continue to grow. “I think the challenge for us is doing a lot with just a little boot-strapping, because we have to compete with some large companies for business,” Murray says. “But there’s a lot of depth there for us. There are multi-billion-dollar companies that do this, so there’s plenty of growth for us.”
Mindy Favreau, Mainebiz staff reporter, can be reached at mfavreau@mainebiz.biz.
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