Splunk CEO Twice Zuckerberg’s Age Sees Stock Soar in IPO
Splunk Inc.’s Godfrey Sullivan doesn’t fit the profile of the young hotshot Silicon Valley executive. At age 58, he’s been in the technology industry longer than Facebook Inc. (FB)’s Mark Zuckerberg has been alive.
Investors are more focused on what the executives have in common: initial public offerings. Splunk, which makes software that helps companies analyze data, more than doubled in its debut yesterday, valuing the company at $3.28 billion. For Chief Executive Officer Sullivan, the IPO follows three decades in technology, including 11 years at Apple Inc. and the $3.3 billion sale of Hyperion Solutions Corp.
He isn’t slowing down. Sullivan took over San Francisco-based Splunk in 2008, the year after selling Hyperion to Oracle Corp. (ORCL), and he spent the next five years turning a search engine for businesses into a product used by more than 3,700 customers to collect, index and analyze data. Sales have jumped more than 13-fold since he joined, meeting demand from customers including Zynga Inc. (ZNGA) and Comcast Corp. (CMCSA)
“After Hyperion, I played about three rounds of golf and realized I wasn’t ready to join the graveyard of ex-CEOs,” Sullivan said in an interview yesterday. “I wanted to look back on my career and say I was able to take a young idea and turn it into a global company.”
Sullivan, a native Texan who studied real estate and economics at Baylor University, stands in contrast to the youthful entrepreneurs who have gained recent riches. He’s more than twice as old as Zuckerberg, the 27-year-old founder of Facebook, who’s preparing for the biggest Web IPO ever. Groupon Inc.’s Andrew Mason was 31 when his daily-deal site sold shares in November -- four years younger than Jeremy Stoppelman at the time of Yelp Inc.’s IPO in March.
“What I have to give back is 30 years’ worth of scar tissue,” Sullivan said. In addition to his executive roles at Splunk, where he is also chairman and president, he serves on the boards of Citrix Systems Inc. (CTXS) and Informatica Corp.
Splunk started trading yesterday on the Nasdaq Stock Market under the symbol SPLK, after raising $229.5 million in the IPO on April 18. It jumped 109 percent to $35.48 at the New York close.
The company was founded in 2004 by Erik Swan, Rob Das and Michael Baum. Sullivan was hired four years later to turn the startup into a potentially public company. He joined in September 2008, just as Lehman Brothers Holdings Inc. was collapsing, setting off the worst financial crisis since the Great Depression.
Adversity was a familiar setting for Sullivan, who had joined Hyperion in October 2001, a month after the Sept. 11 terrorist attacks on the U.S. Hyperion was also suffering from the failed 1998 merger of Arbor Software Corp. and Hyperion Software Corp. Sullivan helped surmount the downturn, creating a market called business performance management software. He rose to CEO in 2004.
Turning companies around and helping build them is what Sullivan lives for, said David Odell, who was Hyperion’s finance chief from 2000 to 2006.
“For Godfrey, it’s all good when you’re growing a company,” said Odell, 48, who retired the year before the Oracle deal and now lives in Park City, Utah. “The customers are happy, your development team is happy, your sales (SPLK) team is making money and you’re providing people career opportunities.”
Odell said Sullivan changed the trajectory at Hyperion by focusing on products that helped customers gauge whether they were meeting goals. He aligned the development, marketing and sales teams around that mission, lifting Hyperion’s market value more than fivefold by the time of the Oracle acquisition.
Sullivan began his career at Cupertino, California-based Apple in 1981 and spent 11 years in sales, marketing and operations. He worked under Bill Campbell, a former vice president and current board member, who gave Sullivan his first management role in the mid-1980s. Sullivan left for San Rafael, California-based Autodesk Inc. (ADSK) in 1992, where he spent eight years. After that, he was briefly CEO of a startup and then joined Hyperion in Santa Clara, California.
When not in the office or on an airplane, Sullivan could often be found in the mountains of northern California, participating in a little-known race called Ride & Tie. The sport involves two people and a horse, with the teammates alternating between riding the horse and running for as much as 100 miles. Sullivan said he raced for 25 years, before quitting two years ago to focus on Splunk.
“I had more fun doing Ride & Tie over the years than just about anything,” he said. “You see a lot of crazy things in the mountains.”
While Sullivan could have retired after leaving Hyperion, his former colleagues knew he wouldn’t. Brian Gentile, CEO of San Francisco-based Jaspersoft Corp., worked with Sullivan at Apple (AAPL) and overlapped with him again, when Gentile sold Brio Software Inc. to Hyperion in 2003. Gentile, whose startup helps businesses make sense of large amounts of data, said he and Sullivan meet for lunch on occasion to compare notes.
“You’d think he was 35, taking his company public,” said Gentile, who is 10 years younger than Sullivan. “He is so energetic after all he’s done in his career. He doesn’t look much different than he did at Apple.”
Since Sullivan took the helm at Splunk, its sales ballooned to $121 million in the year ended Jan. 31 from $9.07 million four years earlier. While revenue surged 83 percent in fiscal 2012, the annual net loss jumped to $11 million from $3.81 million a year earlier on increased spending for sales and marketing. Splunk’s largest customers include social-game company Zynga, cable-TV provider Comcast, Bank of America Corp. and Harvard University.
“It’s as if you’ve had the experience and leadership capabilities of a big-cap CEO from the time it was pretty small,” said John Connors, a Splunk board member and partner at Ignition Partners in Bellevue, Washington.
Splunk is the first of the so-called big-data companies to go public, capitalizing on demand for software that companies use to search, analyze and monitor the surge in data on their networks. The company has deep-pocketed competitors, including Google Inc. (GOOG) and Adobe Systems Inc. in the Web-analytics market, and EMC Corp. and International Business Corp. in business-intelligence software.
Silicon Valley is paying attention. Because Splunk is the first to debut for Wall Street, there’s increased pressure on the company to put up numbers, said Brooke Seawell, a venture partner at New Enterprise Associates, who serves on Informatica’s board with Sullivan. Startups developing big-data technology include Jaspersoft, Cloudera Inc. and Opera Solutions LLC.
“The spotlight will be on them,” said Seawell, from his office in Menlo Park, California. “I think they’ll do a good job, and that will pave the way for other big-data-oriented companies that are coming along behind them.”
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