Accounting scandals in the U.S. have proved to be a boon for Global Relay’s electronic message archiving business
Warren Roy is one of those people who just get things.
With no background in architecture, he developed a successful design-build company and built dozens of homes. Then, in 1999, after reading a book on the Internet, he decided to start a software company – Global Relay – which has grown from three people in 2003 to 160 today. The company, with a worldwide customer base of 14,000, now posts annual earnings of approximately $20 million.
Remarkably, Roy has built one of Vancouver’s most dynamic software companies with zero background in computer science. In fact, he doesn’t even have a university education.
“Because I don’t have a technical background, I learned the industry from the ground up,” said the 47-year-old entrepreneur.
Shannon Rogers, Global Relay’s president and general counsel, said Roy simply grasps things quickly and is conversant in all aspects of the business.
“He thinks bigger than anyone I know,” she said. ”He gets concepts so quickly.”
Born and raised in Ontario, Roy moved to Vancouver in 1990. Despite not having gone to university, he ended up running a design-build company. As part of that business, he learned computer aided design (CAD).
From there he picked a fundamental knowledge of computers, and when the Internet came along, he “dove” into software development.
Initially, Roy and his co-founders – Eric Parusel and Duff Reid – developed electronic data management for the architecture, engineering and construction industries.
“We could not give away the services,” Roy said. “Nobody wanted to buy them.”
But then a door opened when U.S. firms like WorldCom, Enron and its auditors, Arthur Andersen, were ruined by financial scandal.
In the wake of those scandals, U.S. regulators like the Securities and Exchange Commission passed new laws. Among them were tighter electronic message archiving and supervision requirements – a niche that Global Relay managed to exploit with great success.
The company provides secure storage and supervision of all electronic data for things like e-discovery (forensic auditing of email, instant messaging, web transactions, etc.)
Roy realized that the data-archiving software his company had developed for the architecture, engineering and construction industries could be retooled to meet the new financial services regulations.
“We realized we had the perfect product for the wrong industry,” Roy said. “So we jumped from the architecture-engineering world to the financial services world.”
The company – then just three people – refocused and managed to reinvent itself with no outside investment.
“We had no money, no venture capitalist backing, the economy was unbelievably bad because the whole dot-com world imploded,” Roy said.
“It’s one of those success stories,” said Bill Tam, president and CEO of the BC Technology Industry Association. “It’s three guys working off their credit cards trying to build something in the compliance space. I think they defied just about every textbook manoeuvre in setting up a multimillion-dollar success story, and they proved that it could be done on the back of tireless effort and just sheer willpower.”
Once the company had retooled its software, Roy approached the Financial Industry Regulatory Authority (FINRA), the largest securities firm regulator in the U.S., which helped Global Relay tailor its software to the new U.S. compliance-reporting regulations. One of its first big customers was Thomson Reuters.
“We picked a few good distribution partners, and Reuters was one of them that we teamed up with early on,” Roy said. “As their partner, we were able to get credibility that we wouldn’t otherwise have had because of our size.”
Another early customer was Bell Canada, which required archiving to be done in both official languages. Learning how to archive in languages other than English gave Global Relay an edge over competitors, because as other regions adopted stricter data-archiving rules, more countries needed those services in other languages.
Roy added that simply being a Canadian company had its advantages.
“Canadian privacy laws are quite strong globally, so financial firms outside of the United States generally prefer to deal with a Canadian company because our privacy laws are just at a higher standard than U.S. privacy laws,” Roy said. “And that’s really helped us grow in Europe.”
Global’s worldwide clientele includes some of the world’s biggest banks and is one of Vancouver’s fastest growing companies. It currently ranks No. 19 on Business in Vancouver’s top 100 fastest growing companies list (see issue 1142; September 13-20).
Most of Global Relay’s growth has occurred in the last two years. The company is owned by a core group of employees. Less than 10% of Global Relay is owned by outside investors.
The company managed to bootstrap itself to the position it’s in today without borrowing or seeking venture capital because the core ownership group worked for next to nothing.
Global Relay’s Vancouver headquarters – two floors of the Leckie building at 170 Water Street – looks like a typical Gastown high-tech company.
There are no cubicles, which gives the office an open-collaborative ambience.
Employees sometimes log long hours, but they can always blow off steam by going to the company’s lounge, where they can play foosball or table hockey, and pour a free beer from the company’s draft beer tap.
In addition to its Vancouver headquarters, Global Relay has offices in New York, London and Singapore. Because most of its clients are in the U.S., the company is virtually an unknown in its hometown. (Only 5% of its revenue comes from Canadian customers – 85% comes from the U.S.)
“Nobody in Vancouver knows who we are,” Roy said, “but in New York City, literally everybody in finance knows who we are.”
In addition to providing archiving and data retrieval for things like e-discovery, Global has developed search applications that would allow employees within a company to tap into the wealth of archival data generated by them or colleagues.
It has also created mobile search technology that allows employees to use their BlackBerrys or iPhones to do internal searches.
“Every email ever sent to or from anybody is on record with us and you can leverage that as an employee,” Roy said.
The company recently broke ground on a new $14 million data centre in North Vancouver, and it has plans to build a mirror data centre in Newfoundland. •