Weis: Profitable Sonic Foundry now led by industry veteran
By Brian E. Clark
During his long career in the technology industry, Gary Weis, 64, has worked for such giants as AT&T, IBM and British Telecom.
At IBM, he was general manager of IBM Global Services. He was also CEO of Concert, a joint venture of AT&T and British Telecom.
Now Weis, who commutes to Madison from his home in a northern Chicago suburb, is focusing his efforts on Sonic Foundry. A board member since 2004, he took over as CEO in April, replacing Rimas Buinevicius. Buinevicius moved to become executive chairman and chief strategy officer before departing the company this week as board member Mark Burish was named the new chairman.
As part of April's executive suite shake-up, it was also announced that founder and CTO Monty Schmidt would leave “to pursue other interests,” but continue as a “consultant and friend of the company.”
WisBusiness audioThe April moves surprised some observers because Sonic, which sells Mediasite webcasting platform and services, had only recently become profitable for the first time in years and its stock price had surged. For the third quarter of 2011, it posted record sales of $7.1 million.
Others, however, said the arrival of industry veteran Weis – who is expected to further improve its market position and sales – is a logical step in a shareholder push toward selling the firm to a larger company.
Weis, who calls himself the “senior citizen at Sonic,” says his stint at the helm of the Madison-based company won’t be brief.
“I see myself doing this as long as I need to do help the company succeed,” he said during an interview in late September. “So you shouldn’t view me as a short-timer. I’m here for the long term.
“I’m extremely excited about the staff that we have, the enthusiasm of the people and the capabilities that they have. I’m proud to lead them forward into continuing the success of Sonic Foundry.”
Mike Niehuser, founder of Beacon Rock Research in Portland, Ore., said he has been following Sonic for six years and praised the company for its evolving state-of-the-art technology.
He said he would not be surprised if Sonic is sold because “all companies are for sale for the right price.”
Conversely, he said the board could have brought in Weis to grow the company.
“In a world where technology is changing in what seems like every second, Sonic has kept improving,” he said. “The management team in place now could make it ripe for sale or to make the company even stronger under current ownership.”
Weis, an engineer who speaks in a level monotone, said he believes Sonic is moving in the right direction. He said its success in 2010 and 2011 led to changes in management.
Last quarter, he said the company had largest revenue in its recent history, posting a 23 percent gain over last year during the same period.
“We’ve also become cash-flow positive and profitable over the last year to 18 months,” he said.
“I think the composite of that led to investors having more confidence in the company and the (stock) price, at least earlier in the year, was beginning to run up,” he said. Shares were selling for as high as $15 earlier this year and have since settled in to the $12 range.
He said there are no major plans to change Mediasite, which permits lectures and presentations to be viewed via the Web or recorded and played back later. Some have called it a “TiVo for the classroom.”
But he promised that continuing innovations will be coming after Mediasite 6.0 is released in November. He said 6.0 will permit Mediasite to present captured presentations to iPad and iPhone devices using new technology.
Weis said more than half of Sonic’s sales are to colleges and universities.
“But we also have a large presence with corporate customers,” he said, noting that the company’s event services businesses component is growing.
He predicted Sonic’s sales to businesses will increase, but said its “entry-level position” with universities means that area should remain dominant because of the growth potential.
“They will simply install more of our technology in more of their classrooms,” he said. “But I also see corporate and event services growing rapidly.”
Weis declined to name major U.S. universities using Mediasite because of what he said is their sensitivity to publicity. But he said business schools have been some of the first areas in colleges to use the technology.
In addition to sales in the United States, Weis said universities from the Middle East to Asia are using Mediasite, including the Princess Nora Nursing School and King Abdullah University in Saudi Arabia.
Weis said the market for webcasting is nowhere near mature, though he could not cite figures for Sonic’s market share.
“The way we sell isn’t tracked the same way by all the analysts who try to define the market,” he said. “We’ve penetrated a large number of educational institutions, but we have not come anywhere near significant penetration into the eligible classrooms. There is a lot of headroom left in the market.”
Weis said the response from students has been positive.
“We’ve seen a number of studies that indicate that students love it because it frees them up from taking high-precision notes,” he said.
But the Sonic CEO said Mediasite webcasting is not a substitute for attending class. Rather, he believes it is best used as a vehicle for students to be able to go back and review a lecture without having to take meticulous notes as they are participating in class.
Weis said knowledge retention is enhanced with Mediasite and that the company is working with customers to collect data to substantiate that theory.
“We get feedback from students who say that is a very positive feature of having lectures captured."
Weis said the company now has around 100 employees, with the majority in Madison and others spread around the United States and the globe. Sonic is continuing to grow, he said, and is in the process of hiring a small number of engineers.