Jericho prospers as recession bites

Key Business Insights:

On-demand computing is commonly seen as suiting large organisations. But email marketing service provider Jericho, which has 26 staff, proves it is also of enormous benefit to small, dynamic companies.

Jericho schedules the sending of millions of email marketing messages a month for clients, yet can handle unexpected campaign requests in as little as an hour by switching on additional capacity at utility computing provider Integral.

On-demand computing also means Jericho can add big new customers quickly and without having to invest capital in new computer hardware.

Key Innovation

Email marketing service provider Jericho can turn computing capacity on and off like a tap to cope with a growing volume of marketing messages from customers fighting the economic downturn.

"For Jericho it's been a good year, no doubt in part due to being able to scale our offering to meet client demand."
Jericho creative director Andrew Kay

Jericho

• Company formed in 2000
• Profitable since 2004
• Has 26 employees — six more than a year ago
• Recession-proof profit growing faster than 25 percent
• Handles millions of customer emails a month
• With on-demand infrastructure, has boosted capacity 500 percent

Small Auckland company Jericho is living proof of the benefit of treating computing resources in the same way as electricity or water supplies. It is in the happy position — despite the recession — of having an expanding workload, but is coping without the costs and delays of setting up new infrastructure.

Instead, Jericho — an email marketing service company — merely asks its on-demand computing provider to allocate the necessary IT resources to cater to the peaks and troughs of its business. With the economic downturn forcing businesses to work harder to bring customers through the door, Jericho is busier than ever managing their email marketing campaigns from conception to delivery.

"People are looking a lot harder at their marketing dollar and how they can extract more visibility from that investment," says Jericho co-founder and creative director Andrew Kay. As a result, many of the firm's clients, particularly retailers, are upping the frequency of their email contact with customers, and also varying the content.

"That's resulted in an increase across all facets of our business — from the design and production department through to the end result of more emails."

The core of Jericho's business is SmartMail, its email marketing campaign management and reporting software. Big clients, which include Telecom, Ezibuy and Fly Buys, typically have a full-service arrangement with Jericho, which means Jericho designs the content layout, manages despatch, and reports the results.

Computer grunt is required for message sending and reporting, and for that, Jericho relies on on-demand computing provider Integral Technology Group, an IBM® Business Partner. It's a year-old relationship that has given Jericho the flexibility to take on a major new client, The Warehouse, without having to spend large sums on additional computer hardware.

Winning The Warehouse business was a direct result of the partnership with Integral and IBM, Kay says. "It was due to our scalability — being able to quickly increase our sending capacity to meet The Warehouse's requirements."

The new business means a 10 percent increase in email volume, but Integral's on-demand model ensures that doesn't come at the cost of Jericho's other customers. Kay says it's merely a matter of activating virtual servers at Integral to deal with the added demand.

Equally, when any client has an unscheduled need to do a big email send-out, as had happened half-a-dozen times in the first few months of the year, additional capacity can be provisioned within as little as an hour for as many as 500,000 messages.

"The relationship with Integral is very fluid so that when we get new clients on board, from signing contracts to the first emails going out can be a turnaround of about a week."

That contrasts with the couple of months it would take to set up and test new systems in-house when added capacity was needed for a customer of The Warehouse's size.

Integral's utility delivery model also means a significant cost saving, says Kay. "We're really starting to see that cost benefit coming through, especially when adding new clients doesn't mean having to invest in new hardware."

That's not to say that Jericho's expansion hasn't required some investment. In the past 12 months, during a time when many companies have had to lay off staff, it has increased its headcount by 30 percent to 26 full-time employees.

"For Jericho it's been a good year, no doubt in part due to being able to scale our offering to meet client demand," says Kay, who sees no negatives in the utility computing model.

"So far, in the year we've been running it, we haven't seen any downsides. For us it really has been a plus."

Key Benefits

With computing delivered on-demand, Jericho can start providing email marketing services for major new customer The Warehouse within a week.

Integral's utility computing model, based on IBM Blade, Storage and VMware technology, boosts Jericho's capacity in as little as an hour to cope with spikes in message volumes.

Jericho can take on big new customers without having to shell out for computer hardware.

Jericho's flexibility is a drawcard for new customers.

Jericho wins the Excellence in Business Support Award for the 1 to Many Business Services category (< $5M t/o) at the 2009 Vero Excellence in Business Awards.

http://www.marketing.org.nz/cms/News/5425

Jericho took the top prize at the 2007 IBM Business Partner Awards:

Integral Technology Group's utility computing solution for email design and delivery specialist.

http://computerworld.co.nz/news.nsf/news/8E9A7C35D3DC91F8CC25739B00774EF4

IBM

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