The WordPress community in Norway is not very big yet, but it is growing steadily. I met Magne Ilsaas from the biggest WordPress agency in Norway. Currently Magne’s agency, Dekode, employs 18 people and has an annual revenue of 1.4 million euros (12.5 million NOK).
Dekode specializes in WordPress websites, but also works very closely with a Magento partner (Trollweb) delivering front-ends for large e-commerce websites. Dekode was very open with their numbers and pricing. Dekode’s annual revenue was a bit over 1 million euros (9.5 million NOK) in 2013. In 2014, Dekode’s revenue reached around 1.4 million euros (12.5 million NOK).
Dekode’s typical project price is around 25,000 to 50,000 euros with a typical hourly rate of 150 euros, but please note that the general price level is higher in Norway than in many other northern European countries. For example, a typical price for men’s haircut in Oslo can be between 60 and 70 euros. (See the Big Mac Index for more.)
Dekode is very much focused on WordPress and open source. They run the WordPress meetups in Oslo and actively support the community in Norway. Dekode also puts a lot of emphasis into making WordPress easy for the clients, to make them ‘feel at home’ with their CMS. That’s why, in a way, Dekode is not just a WordPress specialist, they are also ‘website management’ specialists that want to build tools that help customers succeed with their websites.
Where does Dekode come from? What makes Dekode special as an agency?
“I have a design background and worked closely with developers in agencies. The main idea when starting our own company was to build a place where design and development would somehow be tightly knit together.
Five years ago, not many people knew about WordPress in Norway. They chose us because they liked us as an agency, and we delivered cheap websites. That has now been turned completely upside down. During the last couple of years, clients have started asking specifically for WordPress—and right now we are the number one agency for even bigger WordPress projects.”
What kind of a staff structure you have?
“We have two ‘digital adviser’, two project managers, three designers and the rest, 10 people, are developers. I do a bit of everything.”
How much of your work is direct customer relationships and how much is being a supplier for a bigger agency?
“I’d say 50-50. That has been our strategy all along—to build both sides. We are happy to be partners for larger agencies. We see different styles of working and that also gives a lot of insight to us. For many agencies we are not just suppliers, we are also their ‘tech partners’. We are invited early on. We even pitch together for the client sometimes. One example of a good partner for us is Netlife.”
What are your typical project sizes? Say medium-size projects?
“A typical medium-sized project costs 200,000 NOK (around 23 000 euros), we do some that are smaller. I’d say that typically we are between 200,000 and 300,000 NOK (23,000–34,000 euros), for an implementation project (technical implementation only).”
You have grown pretty rapidly during the last years – any growing pains?
“Personally I don’t have a business background, so it has been largely learning by doing. But in many ways this has also been an opportunity to develop our own ways of doing. Naturally we have had our troubles with typical areas, such as project management and keeping the budgets.
Currently our biggest challenge is resource management. Our pipeline is growing much faster than we can deliver. Right now we are almost fully booked till summer. It is fantastic, but also very challenging. Especially serving old customers is difficult and we have to prioritize. We are hiring new talent, but also letting some customers go.
It is a huge step to go from two developers to ten developers. Suddenly you have different teams and a lot more communication challenges. For us, the jump from seven to 18 people has been quite a ride. It has been fun, but we’ve had our issues also.”
How do the clients see the market right now? Who are your competitors?
“Right now clients seem to think about just WordPress and EPiServer here in Norway. For us it is quite challenging, because these two systems are ‘worlds apart’. Selecting a CMS is very trend-based here. EPiServer has been the big CMS here for a long time.
EPiServer is pretty expensive to build on, so it is fairly easy for us to trump the price—and still have a good margin. ‘EPi guys’ are naturally bad-mouthing WordPress. But the truth is, EPiServer is a big platform that costs 70,000 NOK just for the license. With 70,000 NOK (8,000 euros) we are often already halfway there with WordPress.
Right now WordPress is the cheaper choice in most cases. It might be changing at some point, but right now that is a strong advantage for us.
Also, WordPress is the trendy choice right now. Open source is a trendy thing here, and also the popularity of WordPress globally has made it a pretty easy sell. A big step for us was also last year when we won our first public tender. After that the public administration and institutions have been much more interested.
We also used to be the flexible choice, but now that we are growing, we are getting more similar to more established agencies. We are transforming into a company that is somewhere between a small WordPress boutique agency and larger tech agencies. But we can still have our own culture, we can have an open source culture, we can have these locations.”
Note: Dekode is located in an old industrial facility site outside the city center of Oslo where many bigger agencies are located.
What it means to be a company that works with open source software?
“It has a lot to do with the culture of the company. Our developers have to be comfortable with working with a community. Also working with plugins is an important area. We mostly hire young graduates so we have to teach a lot of things to them. And the idea of sharing is one of the biggest things.
For us sharing is not just about code, it is about talking and presenting. We are organizing the WordPress meetups in Oslo. We are co-organizing and sponsoring the WordCamp Norway. And we want our people to talk at these events!”
Any other market trends or developments going on in Norway?
“Ad agencies are a bit confused right now. There is a lot of debate going on. Ad agencies and tech agencies are battling each other. Personally I think we are getting past the phase where ad agencies were the ones selling digital services. Right now more technically focused agencies are taking a bigger role.”
What are the most important plugins for you?
WooCommerce is also a big part of our work. WooCommerce makes e-commerce front-end fun again. You can make it nice, and easy for the client to maintain.
After that, the plugins are more or less specific to each project. We are very transparent toward customers about the plugins we use. If a customer wants to use a specific plugin we always evaluate it before we install it. Customers are not allowed to install plugins by themselves.”
How much of your revenue and projects is related to WordPress?
“WordPress is always there in our projects. Even for large e-commerce projects, WordPress is the front-end even though Magento would be involved also. And Magento parts are always done by Trollweb, not by us. We have built a very nice integration between the two systems, so WordPress can do all the CMS work.
Personally, I see that e-commerce is going to be more and more about building a brand, doing campaigns and working with your website. I expect even more of our work to be related to e-commerce in the future.”
How do you handle hosting for your clients?
“We use Rackspace for all of our WordPress sites. We have our own virtual servers where we handle everything.
Typical hosting in a shared environment is around 160 euros per month. If the client wants their own server, then it’s 280 euros per month. Those two are the most typical choices.
We handle all the updates and backups for our clients, but currently we don’t charge extra for that. All that is included in the basic hosting fees. So we don’t have a special maintenance charge, clients pay for the hours.
I know that when we grow we need to be better in finding recurring revenue sources, but I strongly believe that being a partner means charging only for work actually done.”
What is your hourly charge for clients?
“We charge 150 euros (1,250 NOK) per hour.”
How do you see the future of WordPress – any special hopes and wishes?
“I’m hoping for more and productized integrations and add-ons to systems and services related to e-commerce. The market for e-commerce is growing fast, at least in Norway.”
PS. I will be visiting Oslo couple times during 2015. If you run a WP agency and would like to talk, let me know.