digiMine wastes no time starting up

If most Web companies move at Internet speed, then digiMine.com Inc. is moving at warp speed.

In a little over a month, three former Microsoft executives made their exit from the Redmond software giant, formed a company, capitalized it with $5 million and made an acquisition that brought a fully-staffed development team into their ranks without doing so much as a job interview.

The new Bellevue company, formed in March by Usama Fayyad, Bassel Ojjeh, and Nick Besbeas, intends to manage and host data storage and analysis for business-to-business e-commerce firms on a subscription basis.

At the same time, digiMine has managed to get a group of CEOs and investors behind the firm that read like a Who’s Who of the Seattle-based Second Avenue Fund, co-founded by former Microsoft Corp. president Peter Higgins; Sam Jadallah and Robert Pollan, managing directors of Internet Capital Group; Hames Voelker, former CEO of Nextel Communications; John Cunnignham, president of Kellet Investments; Kirkland based Cedar Grove Investments; Deutsche Bank Technology Fund; Silicon Valley Angels and Kellet Investments.

The deal closed March 10, seven days after Fayyad, who serves as digiMine’s president and CEO, left his position at Microsoft as head of the Redmond software concern’s data mining and exploration group.

Prior to his four-year stint at Microsoft, Fayyad, who holds various degrees in computer and electronic engineering, worked in NASA’s Pasadena, Calif.-based jet propulsion lab.

Within a week, Fayyad’s firm acquired digiMine, a Redmond-based e-commerce data mining consulting firm, including its company name and the entire nine-person development team. Fayyad, Besbeas and Ojjeh then set up shop in Bellevue, where the firm’s administration and marketing will be housed until it moves to larger facilities in Kirkland in May.

With its capital base in place and the acquisition completed, digiMine can concentrate on getting to market with the software that will provide the backbone of its service package.

“The beta release for the product should be done within two and a half months,” Fayyad says. “We’re looking to release version one in six or seven months.”

The market for data storage and analysis services is a huge one, he says.

“Companies today are paying huge amounts of money for data mining and storage solutions,” Fayyad says.

Using data to understand customer behavior and to manage customer relationships and marketing campaigns is imperative to an e-commerce company’s survival, he says.

As an applications service provider (ASP), digiMine plans to save its e-commerce customers money on the cost of buying a large data mining software package and the teams of information technology workers that are needed to run them.

“The costs are very low with digiMine,” says Chris Birkeland, a partner at Cedar Grove Investments. “There are no up-front implementation or systems integration costs.”

He declined to disclose the size of Cedar Grove’s equity in digiMine.

The competition in the data mining and storage space includes heavy hitters such as IBM and San Mateo, Calif.-based E,piphany Inc., Birkeland says. But digiMine sees such companies as potential allies.

“digiMine’s ASP would make a great application for integration into (IBM’s) or (Microsoft’s) ASP models,” he says.

digiMine officials say the firm plans to close on a $50 million venture capital round within the next six months.

By: Jeff Meisner

Source: Eastside Business Journal


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