Mike Johnston: 'I think we’re set up for exponential growth.'

Mike Johnston: 'I think we’re set up for exponential growth.'

Though the pandemic has made REDspace’s 20th year a strange time, CEO Mike Johnston believes his company is well positioned to thrive as the economy improves.

The Bedford, NS, software development company, which celebrated its 20th anniversary last week, builds flexible platforms for global enterprises, with special strength in video platforms. In the past few years, it’s experienced strong growth with the advent of streaming services like Netflix and Disney+.

Like most companies during the pandemic, REDspace had to send its staff home and was concerned about the effects of COVID-19 on its business. But as the world adjusted to the pandemic, something unexpected happened: new clients began to contact the company.

The entertainment industry had been forced to pause during the lockdown, and executives were using it as an opportunity to review and upgrade their IT platforms, said Johnston. Many in the industry had heard about REDspace and were reaching out.

“We had a lot of interest from a diverse group of new customers,” said Johnston in a phone interview last week. “So we’ve been hustling to bring in some of these new customers.”

Johnston and a partner started the company in 2000, just as the dotcom bubble was bursting, initially concentrating on building corporate eLearning systems for IBM. Soon the focus was on the entertainment industry and the company was building a growing stable of blue-chip clients.

Today, REDspace says its three main verticals are entertainment, learning and defence, and its website’s list of clients includes such household names as NBC, MTV, and WarnerMedia.  It has grown strongly in recent years as streaming services have boomed.

In 2019 alone, revenue increased 45 percent and REDspace added 86 employees, bringing its current total to 224, many of them recruited to Halifax from other parts of Canada and the world. “It’s a workforce we’re really proud of and want to hang on to through the pandemic,” said Johnston.

During the discussion, Johnston referred to the entertainment industry as being in “this weird dark zone” categorized by great strengths and great weaknesses. On the plus side, demand for streamed content has skyrocketed. “The entire world is stuck at home,” said Johnston. “Everyone [in the entertainment industry] is trying to carry out their strategic plans, so there’s a lot of demand to get apps on their networks.”

But the advertising that underlies the entertainment sector has taken a hit as airlines and other industries have suffered and cut ads. Johnston said his clients are in the unusual situation of viewership soaring while ad revenue has declined.

REDspace has continued to work on some existing accounts, and begun working on a few new ones. It has seen less explosive growth this year than last year, which Johnston said has actually helped its research and development efforts. The company usually spends $2 million to $5 million annually on R&D and this year there were more hands available to work on new projects.

The company has reopened its 23,000-square-foot headquarters and is adding 14,000 square feet of space, which Johnston said will “give us just a hair over an acre.” He’s looking forward to the staff returning to the offices and continuing to grow the client base in coming years.

“We’ve seen more interest from new customers this year, and hopefully we’ll get some of these projects going and grow that organically over time,” said Johnston. “I think we’re set up for exponential growth. I remain pretty bullish that the next couple of years are going to be growth years.”