XBRL Innovators Interview: Rivet Software

We believe that there are two semantic technologies that are crossing the chasm from academia to the commercial mainstream - RDFa and XBRL. We have written about the reasons XBRL is important here and looked at the next wave of innovation here. Our full coverage of XBRL is here.

We spoke to Patrick Quinlan (CEO) and Kevin Berens (VP, Products) to get some insights into what is happening in XBRL land.

Making Money Today And Positioning For The Future

Great companies pull off the difficult trick of squeezing the cash cows while investing to create tomorrow's cash cows.

Today the primary source of revenue in the XBRL market is in preparation software & services. This comes first as companies have to meet the regulatory mandate. So the initial driver is simply "get our accounts prepared so that we meet regulatory mandates".

There are two vendor approaches. One is to offer tools for in-house teams to us. The other is to offer the total service on an outsourced basis. Rivet offer both. They make some big claims on market leadership:

"Rivet expects to work with over 50% of Fortune 500 companies by the next filing period."

The pace is accelerating as more companies have to file and as the larger companies have to do more detailed tagging (such as footnotes). As Patrick Quinlan told me:

"Detailed tagging separates the men from the boys".

This preparation wave is fairly mature. We are now in a battle for market share phase that is already moving to a consolidation (M&A) phase (an example is the recent merger of UBMatrix and Edgar Online).

Roots In Internal Systems

Rivet actually started building internal accounting systems. So it is natural for them to plan for the next phase of the market. This is what we are calling the XBRL Triple Play: Business Intelligence + Investor Reporting + Regulators

They recently merged all their product lines into a single platform called Crossfire. If you had to sum up the pitch it is:

"Stop cutting and paste date between masses of separate spreadsheets".

Patrick Quinlan gave an example of where this matters. Suppose you are managing a public company that is close to the end of a quarter. There is a last minute change to inventory, maybe cause by a supply chain shock. You have to report to investors and regulators. The ripple through effects are big. Any error will be really bad news. This kind of high pressure stuff is the norm. It cost some time and money to get it right and costs a LOT of time and money if it wrong.

Imagine a single change in the inventory system that rolls all the way through internal management reports, 10Q reports for investors and regulatory reports. That is the promise o XBRL that Rivet is starting to deliver on.

SEC Uses Rivet's Rendering System?

Patrick Quinlan mentioned that the SEC is currently using rendering systems that Rivet built for them exclusively. Rendering is a technical term meaning simply how humans get to read the output. So rendering matters a lot.

Patrick indicated also that Rivet is in negotiations with the SEC to purchase Rivet’s Crossfire. They would leverage the Crossfire platform to do a custom project.