Constant Contact Opens NY Office, Makes Big Shift in Tech for Creating Marketing Tools

7/20/11Follow @gthuang

If there is anything constant about Constant Contact, it is change. The online marketing company (NASDAQ: CTCT), based in the Boston area, is announcing today it has opened a new office in New York City. That by itself isn’t big news, but it’s part of a larger strategic shift in the firm’s technology approach—what is being called the biggest evolution in its 13-year history.

Constant Contact’s New York office, a 2,850-square-foot space in Tribeca, is expected to house more than 10 employees within the next year. For now there is a small team of five, brought over in the firm’s $15 million acquisition of Bantam Live, announced in February. Bantam focused on “social CRM”—social media technologies for helping businesses do things like add new customers, retain them, and better understand what they want, especially in online communities. The New York office, which is currently hiring engineers, apparently will be the hub for integrating social CRM into all of Constant Contact’s marketing tools and services. (The company, with more than 800 employees, also has offices in California, Colorado, and Florida.)

Indeed, the firm’s newest space is symbolic of bigger changes happening under the covers. It’s all part of the broad innovation strategy that CEO Gail Goodman laid out for me last month, as Constant Contact transitions from being known mostly as an e-mail marketing company to being known as a more diversified software-as-a-service firm.

That sounds kind of abstract, but here’s one concrete aspect. Bantam Live uses Ruby on Rails, a popular Web programming framework, for its software development. Constant Contact uses mostly Java, which is older and more established (especially for large-scale backend stuff), for its software and database systems. It’s a challenge—albeit not a unique one—to integrate the two. The goal is to make it so that Bantam’s social software for managing sales contacts, for instance, can talk to Constant Contact’s account management, security, and e-mail and social media marketing systems. As newer social features permeate older technology stacks, this issue is bound to become more widespread.

For Constant Contact, the integration (and a lot more) falls under the domain of Stefan Piesche, the firm’s chief technology officer. Piesche, who joined the company two years ago from Cobalt, oversees an engineering team of about 150, roughly half of them software engineers. “The company is changing its tune vertically and horizontally,” he says. “This requires a different approach on the technology side. But we’re not rewriting everything.”

Rather, newer pieces of code written in Ruby are being embedded, rather cleverly, into existing Java applications so as to maintain a “very cohesive user experience” where “customers don’t see the difference,” he says. The end result: the user sees one unified product, even though it’s made up of multiple sets of products and new features.

Imagine performing this integration on the scale of 450,000 business customers and 8,000 partners (including hundreds in the New York area), and you start to get a feel for the magnitude of the task before Piesche and his team. The company plans to release its new social CRM product for small businesses in the first half of next year. But that’s not all.

Constant Contact is also revamping how it stores and accesses its huge and growing stash of data—things like customer e-mail addresses and status updates that take up about a petabyte of storage. Basically, the firm’s existing databases (DB2) are too clunky and expensive to manage as it grows bigger. So it has started migrating its data to Cassandra, an open source database system that is “faster, cheaper, and more nimble,” Piesche says. (For you football fans out there, it’s sort of like a team trying to get younger and faster on defense while remaining competitive in all aspects of the game.)

The question remains exactly how the company will balance the changes to its infrastructure while continuing to manage its existing products and systems. A big part of the strategy involves using a “private cloud” for internal software development and testing, says Piesche. (“Private” meaning a proprietary, closed network operated by Constant Contact, as opposed to a “public cloud” like Amazon Web Services or Google App Engine on the open Internet.)

Without getting too deep into the nitty-gritty, Piesche says using a private cloud could “ultimately allow us to decouple the IT processes from the engineering processes.” That means instead of having fixed release cycles where 15 different development teams have to be ready on the same day every month, he says, “We want to be in the position that teams are decoupled enough that they can release whenever they’re ready.”

All of this adds up to “a very fundamental shift in the way we’re doing business on the engineering side,” says Piesche, and “it’s going to take a while”—probably three years or more—to implement the new model across the board. In the meantime, Constant Contact will face increasing competition from the throng of smaller companies trying to get ahead in social media analytics, monitoring, customer relationship management, and other marketing tools.

Interestingly, Piesche says his firm’s internal approach is “more in line with Google and Facebook than Microsoft.” As a company, you have to “hit the tech strategy with what your business is trying to accomplish. A startup is different from us. We are different from Microsoft. Things change over time,” he says.

Perhaps this quote from Piesche sums it all up: “You have to constantly rethink the way you do business and engineering.”

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com. Follow @gthuang

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