Sermo is getting a technology makeover. The Cambridge, MA-based provider of the country’s largest social networking website exclusively for physicians is planning to launch a revamped version of its site called Sermo X, intending to improve the online experience of its users and customers, company founder and CEO Daniel Palestrant tells Xconomy.
When CEOs tell me about product upgrades, I typically hold back yawns and try to change the subject. Yet it was clear during my meeting with Palestrant at his firm’s Kendall Square offices this month that the new version of the website has real business implications, a big one being that the tech makeover is expected to lower the startup’s operational costs as it seeks to generate its first profits in the near future.
Sermo is within months of releasing a revamped website written in the Ruby on Rails open source Web programming language, replacing the Java-based software the firm has always used. Without getting into too much inside geek baseball, the Rails-based site won’t require as much heavy lifting from a technical support standpoint, according to Palestrant. He says the switch from Java to Ruby was precipitated by a trip he made some years back to the West Coast, where he figured out that other Web startups’ use of Ruby on Rails was enabling them to operate with leaner teams than his own, among other advantages.
Indeed, Sermo’s technical changes factored into the significant layoff it made in December, because two-thirds of the people whose jobs were cut were engineers for the firm’s Java-based site and software, says Palestrant. (He declined to specify the exact number of employees who were cut, but sources have told Xconomy, which was the first to report the layoffs, that about 30 workers at Sermo were let go.) The CEO says he is not out raising money right now, in part because the cutbacks will help his firm conserve its existing cash in the bank. Sermo has raised $39.2 million through three rounds of venture capital investment.
“Part of the reason we did the restructuring was because we didn’t want to
