At BoardVantage we do our fair share of product demos, during which we answer all manner of questions about functionality and how the portal is being used, standard demo stuff. Lately, another set of questions has entered the mix. Customers are now also asking about the board portal market itself, and how it has evolved. They’re more interested in our product roadmap and in the trends that have shaped the market as it exists today. It’s a departure from demos a year ago, but I think I understand why. There is a new dynamism in the space driven by a range of external and internal factors all the way from the iPad to the advent of social media, to the increased adoption of board portals beyond the board. Having been in board portals for almost eight years, I thought I’d provide a Cliff notes version of the space, and shed some light on how it might evolve from here.
All about Access: The Electronic Board Book
Unlike other recent business applications, board portals were not part of the Dotcom crop of the late nineties. They are a more recent phenomenon with the first vendors releasing products in the early 2000s’. BoardVantage was among them receiving our first round of VC financing in late 2002. Other early entrants received their funding around that same time, some from their corporate parent, and others from private sources.
There were two factors that propelled market development. The first was a cadre of progressive directors who, enthusiastic about technology and weary of bulky board books, advocated electronic access to meeting materials. The term used by them was “electronic board book”, an apt description given the rather primitive solutions in existence, which did not support much more than rudimentary online access.
The second driver was the passage of the Sarbanes-Oxley act. This major piece of legislation, written in response to the scandals of that the time (Enron and others), threw a spotlight on board portals as a vehicle to drive governance. At BoardVantage we recognized the value (Technology in Corporate Governance, 2008) in that area but never regarded technology as a substitute, recognizing that corporate governance is ultimately a matter of expertise, ethics and transparency. Taking a pragmatic approach to the role for technology, our focus was increasing director visibility and improving timely access to information. That meant investments in alerting, secure email and Web conferencing. This approach has been validated, as online access has proved its staying power while governance faded as purchase justification for board portals.
Demand came from surprising corners. Contrary to popular expectation it was strongest from brick-and-mortar companies, not the tech sector. Also, large enterprises, typically perceived as conservative, were among the early adopters. Despite this contrarian trend, overall demand remained modest because product functionality was inadequate for widespread uptake.
From Access to Process: The Board Portal
It wasn’t until 2005 that the category found its footing. Technology matured, buying criteria firmed up, and naturally deal flow increased. Right around this time the term electronic board book fell out of favor while the term board portal took hold and is in use to this day. This reclassification was an implicit acknowledgment that newer technology could do much more than provide simple electronic access to board materials. Driven by customer requests, BoardVantage made major technology investments to stay ahead of the trend. Product enhancements allowed capturing virtually all aspects of board process including written consents and director questionnaires. We launched the corporate secretary toolkit with dashboards to manage and tally director input. We shipped an agenda builder for creation of an online agenda and assembly of a board book from Word. By the time 2007 rolled around we had re-engineered our product from top-to-bottom and had Web-enabled all board process as it was practiced inside a typical Fortune-500. With this second generation portal a General Counsel could provide the board with access to board materials AND support process in meetings as well as in-between meetings.
Other material developments during that time included improvements in the process aspects of security architectures and the initiation of SAS70 audits. Also, during this time hosted solutions vanquished the on-premise model. In the early days it had been possible to purchase an on-premise license, but this rapidly faded when F-100’s and financial institutions broadly adopted the hosted services model, correctly perceiving security would be better and director support greater. With time, the vendor hold-outs of the old model dropped out, and as of this writing the market is exclusively based on hosted services. After this rapid series of advances the board portal space entered a maturing phase (temporarily as it turned out) where customers were satisfied to absorb the improvements in their organizational process.
By now some of the biggest companies in America had embraced board portals although often preceded by lively debate. On one hand there were “the progressives”, on the other hand “the traditionals”. This debate has carried on in many boardrooms and reached a stalemate for several years. It’s only recently that the balance has begun to shift.
From Process to Collaboration: The Cross-Over
Starting in 2007 we noticed a change in the demand picture. Whereas up until that time board portals were strictly used by directors, “inside the boardroom”, requests started to come in to deploy the service for applications “outside the boardroom”. Driven by a growing need to include senior executives in the boardroom conversation as well as the desire for executives to collaborate more closely among themselves, companies were reaching out for something better than email.
This might be surprising at first but on closer scrutiny it becomes clear that the way that boards work isn’t so different from the way most executives do. Like directors, executives, depend on a steady flow of information, are often on-the-go, and get their information from an eclectic network of sources. In an increasingly fast-paced world, getting timely access to that information is of growing concern. Compounding the issue is that the information is confidential and is held under some form of process control. To tackle this problem they have email, which had begun to fall short. A board portal on the other hand, with its built-in security, ease of use, and document management has obvious inherent advantages to address this need.
This new demand did however not come without its challenges. As much as there are similarities in the way that boards work there are also material differences. For example, as a group, executives are far more tech-savvy than board members. Also, whereas board process is a relative constant across industries, there’s significant process variation from company to company when it comes to executives.
Before long demand “outside the boardroom” outpaced demand inside. As it continued to grow the BoardVantage flagship product was no longer optimal so in 2008 we green-lighted an engineering effort to build an executive collaboration platform. This platform was equipped with a new UI, a new architecture and new functionality, while leveraging our expertise in security, ease of use and executive team workflow. We also integrated social media because it is increasingly a key component of any enterprise application. Our NextGen product was announced earlier this summer and is now in full production.
We now see ourselves at an inflection point as a company with the market itself on the cusp of a transformation. Of course customers still need online access to board material and Web-enablement of board process but they have also added executive collaboration as a new criterion. No longer is the platform just for the board. It now also includes the leadership team and beyond. All of this has shaken up the stalemate in the boardroom. Whereas before the two forces were at an impasse, “progressives” are getting the upper hand over the “traditionals”, at least that’s the way it looks to us judging by the rapidly growing demand for our service.
No discussion of this topic would be complete without commenting on the iPad. Only announced this spring but it has had the impact of turbo-charging the trends outline above. I witnessed the revolution in computing that emerged with the PC, and I see a similar dynamic here. Every single demonstration we perform includes questions about iPad support (iPad Fever) and it’s not hard to see why. As I wrote in my iPad Experiences, the iPad is the perfect way to review and approve content. Just as the PC needed client-server computing to provide access to centralized systems such as SAP and Oracle, the iPad (and the inevitable follow-on devices, which will be more direct PC replacements) works best with modern hosted systems such as BoardVantage.
These are exciting times for the board portal market as it transforms to a broader market while leveraging the very latest software application trends with the latest hardware in the shape of the iPad. I am pleased that BoardVantage is at the forefront of this wave of change.