Segue Software, Inc.

Forward Motion Equals Success

Planning means everything at Segue Software, Inc., a company named because of its expertise in helping companies test conversions from one platform to another. The concept not only works well for its customers, but it has helped Segue through challenges to become a top contender in its class.

In 1997, Segue was plagued by lackluster performance and slow growth. To solve the problem, the company brought in a new senior management team headed by CEO Stephen B. Butler, a 20-year veteran of the high-technology software business, and set about redefining its vision, recasting its objectives, redirecting product development, and outlining strategy.

The revitalized Segue has since made a "segue" of its own - from that of a floundering organization to a redefined outfit focused on growth.

Headquartered in Lexington, Mass., Segue maintains offices throughout the U.S., Canada and Europe and is a leading provider of electronic business (e-business) testing solutions to an impressive clientele of high-volume transaction and service-oriented organizations such as Fidelity, Reuters Information and Disney Online.

Most recently, Segue Software began selling monitoring and testing software to IBM Global Services under an exclusive, 3-year pact. Big Blue will use Segue products at all its hosting facilities to remotely track its clients' Web site performance as well as analyze network, server and database functions.

"This agreement provides enterprises with seamless world-class solutions, from companies with best-in-class specialization, to help them ensure the reliability of their applications," says Steve Butler, Segue's president and CEO. It also expanded Segue's relationship with IBM.

Putting It Into Action

Segue's big-name contracts and partnerships are the outcome of much planning and a redefined direction that's propelled Segue to the top of its class. Founded in 1991, the company's main business was the development of testing tools for client/server environments.

During its first five years, Segue experienced steady growth and in March 1996, went public. An initial splash saw its stock price spike from $16 to $40/share, however, when first quarter sales didn't meet Wall Street's ambitious projections, the price dropped to the $10-$12 range.

Under the gun, Segue had two choices: Shore up the business well enough to be sold or nail down a strategy that would put the company back on a growth track. The company opted for the latter, hired Butler and began focusing on e-commerce. It drew on what it knew best - applications testing - and became the leading provider of testing solutions in the emerging arena of e-business.

Segue also sought to distinguish itself by developing products and services that simulated real-life scenarios, customized to the client's needs. In doing so, it developed LiveQuality, a three-product suite that creates and executes scenarios enabling clients to anticipate and avert potential e-business problems. The application allows a retailer, for example, to learn how to manage sudden high volume on its Web site, while a financial-services firm could program and plan accordingly for unexpected stock market changes.

From Old to New

Michael Maggio, senior vice president of marketing and alliances with Segue Software, is the only senior manager to have made the transition from old regime to new, watching along the way as the company shifted from static to the dynamic. The main distinction, as he sees it, lies in the new group's focus on planning.

"There was more planning than I'd ever seen in this company before," Maggio says. "By the time our bread-and-butter product suite, LiveQuality™, was launched, we were all on the same page."

But that was just the beginning of Segue's intensive planning process. The public company went on to release many new products and significant enhancements to existing products to round out its offerings to provide full life cycle testing and monitoring of applications from development to pre-deployment and into production.

Also during 2001, Segue refocused its efforts on its channel partners and resellers, through its new SilkElite partner program, as a means to increase Segue's sales presence in mid-tier customers, through an expanded indirect channel.

Even Segue couldn't escape the technology slump, however, and in 2001 the 220-employee company reacted quickly to a revenue slump that dropped its sales.

To combat the industry-wide downturn, Segue executed two restructuring plans, including an approximate 34 percent reduction in workforce, and the closing of the research and development laboratory in the Los Gatos, California, office with a shifting of some resources to Segue's Austrian facility.

The company also consolidated space in its Lexington and Los Gatos facilities and replaced its inside sales organization with a new enterprise-oriented sales model and process. Thanks to its makeover and constantly updated planning process, Segue -- which was purchased in 2006 by Borland Software Corp. -- is well braced to grow and prosper in years to come.