Qumu is in a whole new ballgame this year. Its video platform is in high demand as it scuttled a previously announced merger while under new leadership.
Minneapolis video software firm Qumu has new CEO as product takes off
The company backed out of an announced merger to concentrate on its growth.
September 8, 2020 at 11:57PM
The Minneapolis software company in July hired its new chief executive, TJ Kennedy — a former firefighter, paramedic and state trooper who migrated to the technology side of emergency response.
Kennedy stepped into a situation where the demand for Qumu's main product has skyrocketed since the coronavirus pandemic forced telecommuting and virtual meetings to the forefront.
Video platforms now are an essential corporate function that draws direct attention from the CEO and chief financial officer level, not just IT teams and their managers.
"CEOs now care about their video platforms," Kennedy said.
Qumu has already signed more new customers through July than it did in all of 2019.
"I believe we are taking three to five years of future growth and jamming it into the next year," Kennedy said. "I think that from an enterprise level, we have had to change as companies embrace more video, more remote communications, more remote collaboration and more use of technology to do things we weren't expecting it to do."
Kennedy replaced Vern Hanzlik, who has started a blockchain infrastructure firm since resigning from the company.
A University of Utah graduate, Kennedy became involved in the public safety systems for the 2002 Salt Lake City Winter Olympics and later worked in Greece, installing a number of security technology systems for the 2004 Athens Olympics.
He then went on to working for Fortune 500 companies such as SAIC and Raytheon. At FirstNet, he eventually became president and helped build out a public safety broadband network eventually adopted by all 50 states.
Most recently, Kennedy was CEO of Allerio, a Duluth-based technology startup working to improve communications between emergency medical-service teams and hospitals.
Kennedy came on board the month after Qumu pulled out of a merger with Buffalo, N.Y.-based Synacor Inc., a cloud-based software and services company.
Qumu paid Synacor a $250,000 termination fee and, if it is acquired within 15 months by another company, will have to pay Synacor an additional $1.45 million.
Qumu's main product is a cloud-based video platform. Traffic on the platform during the second quarter regularly exceeded 8 million viewers, a 360% increase over the first quarter of this year, the company said.
Industry experts believe any eventual shift back to an office environment and business trips will decrease reliance on virtual conference platforms. However, they believe the technology trends will not go back to pre-pandemic levels but become a part of everyday corporate life.
"COVID has driven a fundamental change in how enterprises think about and use video and we see substantial tailwinds to the business and room for upside to forward estimates," wrote Jeff Van Rhee, a senior research analyst with Minneapolis-based Craig-Hallum Capital Group, in a research note after Qumu released its second quarter results.
Qumu's growth is also happening when Software as a Service (SaaS) as a business model has been growing across different industries for several years.
"It's exciting for me to join Qumu at a time when video and the move to SaaS in the cloud is such an important thing that is going on. I could see the future of what was happening both before COVID, during COVID and now as we continue to go forward with enterprise video and just what an incredible part of our lives it is today," Kennedy said.
Qumu is still small. Its annual revenue for 2019 was $25 million, and it hasn't been profitable for eight years.
"Qumu continues to suffer from a lack of scale and needs to demonstrate a clear path to sustainable profitability," wrote Steven Frankel, an analyst with Colliers International Securities, in a research note after the company's second quarter results were released.
As a new CEO, Kennedy is using Qumu's capabilities much like its customers, using the company as a case study. As Qumu's workers have also been working from home, Kennedy has been doing live video conferencing with employees in Minnesota and California, Hyderabad, India, and London with live polling and Q&A sessions.
"It's a complex video endeavor and something that Qumu does very, very well," Kennedy said.
Qumu's platform allows companies to conduct live broadcast video at scale — up to 100,000 users on an event with capabilities for slides, questions and polling to go along with the videos. It also offers security layers and detailed video content management. Kennedy is in the middle of a 90-day process with his managers to develop a multiyear strategy.
"That strategic road map is going to guide us and will be a living document," Kennedy said. "It will give us some very specific milestones over the next several years for us to go after and exceed."
Patrick Kennedy • 612-673-7926
Bremer has been rumored to be up for sale after a legal settlement in July.
