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Company: Mint.com
Started: October 2006
Located: Mountain View, California
Geography: North America
Market: Online Personal Finance Management
Products: Money Management
Customers: Over 1 million users
Website: Mint.com
Blog: Mint Blog
Recent News:
Mint.com Adds 1 Millionth User
Mint.com Finds Savings for More Americans with Enhanced – and Now Public – “Ways to Save” Feature
Mint.com Partners with TaxACT to Simplify Online Tax Filing and Maximize Deductions
I asked Aaron Patzer, Mint.com’s Chief Executive Officer a few questions about his business and his view of the SaaS market in 2009.
Did you start out as a Software-as-a-Service company?
No, Mint.com started out as - and primarily is - a consumer facing website. Simply because of the way it is built - to scale to millions of users, open source platform, and web services backend - it is quite easy and natural to do SaaS.
Why do your customers use Mint?
Mint.com lets users see all their bank accounts, credit cards, investments, and loans together in one place. Without any data entry (or cost… because Mint.com is free), users can see how much money they have, how much they owe, where their money is going, get bill reminders and alerts, track their investment performance versus the market, find lower interest rates on their financial products and better prices on the things they buy most.
What do you see as the key trend emerging in the SaaS industry?
Almost all software will eventually move to the Cloud. Personal finance has been no different.
What is your outlook for 2009?
Good. Because of a bad economy, more people need to track and manage their finances. That means our sign up at Mint.com rate has tripled since the financial crisis hit.
I listened to an interesting panel discussion at the Opsource, SaaS Summit a few days ago and I thought I would share what I heard.
Venture capital panelists were from Intel Capital, Emergence Capital Partners, CrossLink Capital and Hummer Winblad Venture Partners and Merrill Lynch.
New Investments
Seems like there was no agreement from the panel about what stage of investment was the most popular given the downturn. There were several Series A and Seed investments that were mentioned including Crowd Factory and Zuberance. One bright spot for investors was the fact that OpenTable has filed for an IPO, which would be a good step in the right direction given 2008’s anemic IPO performance.
Zombie Venture Capitalists
Most of the panelists had done some investments in the past six months but it is clear that SaaS entrepreneurs need to be on the look out for Zombie VC’s, who are still operating but are no longer making investments. These walking dead have their lights on, they have websites, and cash to support existing investments but no longer have enough cash to add new portfolio companies. In writing this post I even discovered that peHUB publishes a list of these Zombie VC’s. If they haven’t made any new investments during 2008, then I would be careful about wasting any time with these firms.
Flat is the New Up
One phrase that was uttered more than once is that ‘Flat is the New Up’. Although when it comes to Software as a Service… it appears that ‘Up is still Up’. Even in 2008, most publicly traded SaaS companies have bounced back from their lows by an aggregate of 20%, which is much better than the S&P 500. Apparently Wall Street likes SaaS companies and now are valuing them at 3 to 3.5 times their recurring revenues, unfortunately at the beginning of 2008 that number was closer to 8x. Keep in mind that this is better than a lot of public firms that are currently trading at their cash values. Other Wall Street analysts are valuing SaaS firms at 12x their cash flow but it is difficult to understand if there is a consistent valuation metric that firms or investors should be using.
Another interesting development is that Venture firms are now forced to value their private portfolio the same way they would value a portfolio of publicly traded stocks due to new accounting regulations (FASB 157). Based on the discussion this new regulation, it will only create more company valuation compression on top an already tough market for portfolio companies.
What Does a Good Investment Look Like?
So what are the VC’s looking for in an attractive investment in this market? Apparently the same things they were looking for in the past; a game changing idea, the team, the product and a big market. If you are a software company you better be offering a real SaaS solution or be leveraging the Cloud Computing to even be considered.
They are also looking for new portfolio companies to be more conservative about spending their precious cash. There is now an overt trade-off between the rapid growth rates of the last five years and capital efficiency to provide a longer runway for portfolio companies. The panelists indicated that they would like to see their new Series A companies, for example those who might raise $4 million, to survive at least for 18-24 months before going out for their next round! With the difficult market dynamics it is important for SaaS firms to form a strong syndicate when raising capital because your next round will be an insider round.
The panel indicated that they are looking for operating executives who know how to manage cash and scrub expenses. Another observation was that many of the early stage companies that they are seeing now are much more mature and well run than they were just a few years ago.
There also won’t be any more Salary.com (NASDAQ: SLRY) IPO’s of $15 million companies. IPO candidates will need to be $50 to $70 million in revenues and ideally profitable before filing their S-1.
For public SaaS companies you are going to see a slow down in the rapid growth rates we were seeing from companies like Salesforce.com (NYSE: CRM) and SuccessFactors (NASDAQ: SFSF). Public markets want to see profitability first and growth now comes second. Momentum stocks, those with high growth rates were trading at 8-9 times revenues, like Salesforce and SuccessFactors, are giving way to slower growth companies that are profitable and are given a multiple on cash flows.
Customer Acquisition Costs
When building your SaaS business model, it is important to assume that for every dollar of recurring revenue you will probably need to invest $.50 to $1.00 in your Customer Acquisition Costs (CAC). It is important than ever to have an active program of testing various CAC channels and tactics to maximize your investments. Then you need to have a smart statistical framework that you can explain to your investors.
Smart firms like EchoSign and YouSendIt are creating leads virally by infecting their customers and they are finding that they are finding 1/3 to 1/2 of all of their leads are generated organically. It is also important to leverage distribution channels, especially companies that have access to large customer bases like Salesforce.com, Google, and Intuit. Take more of a focused approach to your customer acquisition efforts by targeting a vertical market and use the power of your customer referrals because ‘word of mouth’ is the least expensive and most effective lead generation engine. Keep in mind that your sales process needs to be as easy as possible, in other words it needs to be ‘friction-less’. When your prospects sign up for a trial, it only takes a few minutes and weeks and they can do it without any involvement from your company. Give them a free trial, a sandbox a free version.
So I came away from this panel discussion with the following advice for companies looking for funding in this environment:
- You need to still need to have a great idea, product and team but you might need to have reduced risk for your potential investors.
- Demonstrate your company knows how to stretch a dollar as far as possible. Fewer employees is better… think Craigslist.
- Show traction. Number of transactions, members, customers, revenues, profits.
- Shop carefully for your potential investors and don’t waste time with Zombies.
Good Luck!
Company: QuickArrow - has been acquired by OpenAir, a NetSuite company
Started: 1999
Located: Austin, Texas
Geography: Global
Market: Professional Services Automation
Products: Project Management; Resource Management; Time, Expense and Billing Management; Strategic Business Analytics
Key Customers: Salesforce.com, Genesys, Borland, HP and Symantec
Website: OpenAir
Twitter: QuickArrow Twitter
Recent News:
QuickArrow Unveils Next-Gen Integration with Microsoft Outlook®
QuickArrow and RTM Consulting to Host Webinar on Maximizing Services Business in a Down Economy
I asked Kevin Bury, QuickArrow’s Chief Executive Officer a few questions about his business and his view on the SaaS market in 2009.
Did you start out as a Software-as-a-Service company?
Depends on the buzzword… We started out in 1999 as an “ASP”. Then we were “On-Demand” for a few years, and now we’re “SaaS”. But yes - we’ve always offered a hosted solution, and since we got in ahead of the curve, we were able to avoid the challenge of transitioning delivery models that so many traditional software vendors are contending with these days.
Why do your customers buy from QuickArrow?
The short answer is: To reclaim their personal lives.
The vast majority of services businesses are still running on spreadsheets, and the time spent compiling manual reports is mind-boggling. Anyone who has ever worked in services knows that most of the time, nights and weekends are spent playing catch up. QuickArrow automates the process, and provides much better business visibility than any spreadsheet ever could.
What do you see as the key trend emerging in the SaaS industry?
There are several interesting trends taking place, like Platform-as-a-Service, and Integrations-as-a-Service, but ultimately, I think the biggest trend we’re seeing right now is that SaaS adoption is reaching the tipping point, or about 15%. That’s the point at which you typically see the hockey stick effect kick in. And lately, it’s easy to understand why the “pay as you go” message is resonating so well.
What is your outlook for 2009?
One of the critical drivers for SaaS success is retention. You have to protect the annuity while driving new sales to ensure predictable, steady revenue growth. So this year, we’re really focusing on ensuring that any initiatives that hit the roadmap are good not only for new sales enablement, but also for our existing client base. And thanks to our SaaS model – if we can do that, we should see continued growth in 2009.
Thank you to Kevin Bury and Thomas Meredith for contributing to this profile.
Company: Workday
Started: Founded in March 2005 by former PeopleSoft executives Dave Duffield an Aneel Bhusri
Located: Pleasanton, California
Geography: Global
Market(s): Software-as-a-Service
Products: Human Resources, Payroll and Financial Management
Key Customers: Flextronics, Chiquita Brands, H.B. Fuller, Salesforce.com,
McKee Foods
Website: Workday
Blog: Workday Blog
Recent News:
-Workday Delivers Pay for Performance and Worker Spend Management
-More than 30 Companies Live on Workday
-Workday Passes 50 Customer Milestone
I asked Workday’s Chief Technology Officer Stan Swete a few questions about Workday and the Company’s view of the SaaS market in 2009.
Did you start out as a Software-as-a-Service company?
Since its inception in 2005, Workday has always been a Software-as-a-Service company. Our co-founders, Dave Duffield and Aneel Bhusri, both spent many years in the on-premise world and identified the opportunity for industry change. Business software that was designed in the 80s and 90s had become far too complex and expensive to deal with, and it wasn’t meeting the needs of contemporary organizations. There was a big opportunity to scrap all traditional software, start from scratch and take an entirely new approach. Just 3 years out of the gate, Workday delivers Human Resources, Payroll and Financials – all via SaaS.
Why do your customers buy from Workday?
First, low cost of ownership and fast time to value are huge right now. Companies that are using on-premise applications are looking to get out from under the maintenance burden and many are turning to SaaS. And, since SaaS can be implemented quickly, many Workday customers are measuring fast returns.
Second, customers are looking for innovation. As I mentioned earlier, most on-premise software was built in the 80s and 90s. Workday is new - built from the ground-up on modern Web-based technologies. We’ve incorporated search, links and tags throughout the application, making it intuitive for the user. And, by the nature of the SaaS model, the product is always getting better.
Finally, and we take this very seriously, we are committed to being a trusted partner. Our customers are our most valued and important partners, and in fact, our product is a direct reflection of their feedback. Workday has recently achieved a 100 percent customer satisfaction rating, and we attribute this to our commitment to them as partners.
What do you see as the key trend emerging in the SaaS industry?
Especially because of the hassles associated with on-premise maintenance and upgrades, companies will continues to replace their current traditional systems with SaaS. I think the bigger driver over the next 18 months may be that companies start really looking at how to emerge from the tough economic environment in a strong leadership position – having a modern technology footprint will be a central part of those efforts.
What is your outlook for 2009?
SaaS is ready for the enterprise. We’ve hit a tipping point, and “Enterprise-Ready SaaS” will continue to prove itself this year as large companies continue to go live on Workday and other best-of-breed providers. Mid- and large-sized companies will continue to select SaaS for many of the reasons I’ve outlined above: lower cost of ownership, faster time to value, continued innovation, and vendor commitment to be trusted partners.
Thank you to Stan Swete, Jeff Pulver and Christine Cefalo for contributing to this profile.
SMB Financial Productivity Software
There is an increasing number of Software-as-a-Service (or SaaS) firms jumping into the smallest end of the Small and Medium-size Business (SMB) market, and they are offering a variety of office productivity solutions. This is the fastest growing segment of the economy according to the Bureau of Labor Statistics there are up to 21 million self-employed consultants and small firms in the US.
This has traditionally been the sweet spot in the market for companies like Microsoft. Although most customers are somewhat happy with their offerings, Microsoft offerings tend to be cumbersome, packed with way too many features, hard to use and upgrade.
A new set of SaaS providers has emerged with products designed specifically for the small business owner. These packages are all delivered through the Internet as a service, so no more visits to Best Buy were required. Many of these new software services are very low cost and some were even free, and because of this, the adoption of these products has been rapid.
This Sector Report is only covers the incumbent software provider and the promising new SaaS suppliers.
Office Productivity Suite Profiles
Word, Excel, Outlook, PowerPoint and many other productivity products.
Microsoft has owned the SMB office-based software market for at least the last ten years. Their suite is large and includes all the main office productivity software modules.
Microsoft Office has been delivered as shrink-wrapped software. Microsoft is now experimenting with delivering their products through the Cloud along with using their Azure operating system. Most alternative office solutions are SaaS-based.
There are millions of Microsoft Office customers.
Public company (NASDAQ: MSFT)
New Alternatives
On-demand documents, spreadsheets, calendar, presentations, email and more.
Some applications are very similar to the depth of functionality you would find in the Microsoft Office suite of products. Other Google Apps offer very lightweight functionally and don’t appear to be very useful. All Google Apps are delivered through the Cloud as a subscription offering. Google provides for free usage for up to three users and then offer the applications for $50/user per month.
Approximately 10 million users and 1 million customer companies.
Estimated 3,000 companies are signing up for Google Apps per day.
Public company (NASDAQ: GOOG)
Zoho Productivity and Collaboration Free and $
On-demand documents, spreadsheets, calendar, presentations, email and more.
Most of the Zoho applications have similar functionality to Microsoft’s products and provide many other capabilities beyond their Office suite. The Zoho application suite has better functional depth than Google Documents. All products are delivered through a SaaS subscription model.
Estimate 1.2 million users/customers.
Private company based in California and India. 250 employees.
Zimbra Collaboration Suite Free and $
Hosted documents, calendar and email.
Hosted, open source applications that are less functionally rich than Microsoft, Google or Zoho offerings. One concern with using Zimbra is that if Microsoft finally purchases Yahoo! they might shut Zimba down and force their users to use Microsoft Office.
Estimate hundreds of thousands of users/customers.
Public company (NASDAQ: YHOO)
Other players in the SMB Office software market include Sun Microsystems StarOffice, Apple’s iWork, and Corel’s WordPerfect suite. Small businesses have many choices when considering an Office productivity suite and many of the best options are for free.
Small businesses are actively looking for ways to save money and using any of the SaaS-based office productivity tools will very quickly pay dividends. For example the City of Washington D.C. decided to switch from using Microsoft Office and related software to Google Apps and is now saving nearly $3.5 million annually.
Given the current state of the economy, many individuals are now setting up their own businesses. Using these new subscription-based Office Productivity tools can not only be very affordable for start-up your businesses but also give the consultant or SMB many of the same capabilities they had at their larger firms.
The good news is that there is no shortage of SaaS-based Office products out there to choose from and this is just a top line summary of what is available. Many of these products are available at very attractive price points, including many who are free. Given the experience that the City of Washington D.C., using these solutions not only can save a lot of money but also make SMB’s more competitive in this tough economic environment.
Company: Bill.com
Started: 2003
Located: Palo Alto, California
Geography: Global
Market: On-Demand Accounts Payable
Products: Accounts Payable Management
Key Customers:
Website: Bill.com
Blog: Bills 2.0
Recent News:
Bill.com CEO René Lacerte Named to List of Accounting Industry People to Watch in 2009
Bill.com Wins ‘Awesome Add-on’ Award for QuickBooks
Bill.com and Intacct Get Together on Financials
I asked Rene’ Lacerte, Bill.com’s Chief Executive Officer a few questions about his business and his view of the SaaS market in 2009.
Did you start out as a Software-as-a-Service company?
We built Bill.com as a SaaS solution from day 1. I have been a huge believer in software as a service model since my days at Intuit, well before the term was even used. When I left Intuit, I started PayCycle, the first and largest SaaS payroll company. With the huge customer satisfaction we enjoyed at PayCycle, it became clear to me that there is no better way to build software. Once you go SaaS you never go back. As such, I designed Bill.com from the beginning to take advantage of “Cloud Computing” both for our customers and for us—Bill.com operates 100% SaaS for our internal systems.
Why do your customers buy from Bill.com?
Our customers buy from us because we are the easiest and most affordable way for businesses to streamline the entire bill management process from bill receipt through payment and reconciliation. We call it collaborative online bill payment, and it drives huge efficiencies both within organizations and between accountants/bookkeepers and their clients. Our paperless workflow approach combined with online payments allows our customers to save over 50% of the time and money they currently spend on A/P.
What do you see as the key trend emerging in the SaaS industry?
I think a key trend is the need for SaaS companies to deliver on the “Service” part of the name. Software in the cloud is great but it is just software. To me the power of the cloud is that it creates an unprecedented opportunity to “service” your clients. At Bill.com that not only means creating a “WOW” experience when customers call, but it means leveraging the data our customers entrust to us to constantly provide them with services they couldn’t otherwise easily (or affordably) get, such as connectivity to banking and payment systems (both online and offline), fraud protection, and unlimited digital financial document management.
What is your outlook for 2009?
Even in these tough times we are gaining speed and momentum, so I am optimistic about 2009. More than ever, businesses need ways to become more efficient and save money, but they need to be able to do it quickly, inexpensively, and without long term commitments. That bodes well for SaaS applications that are laser-focused on improving real world business processes. Once you try SaaS, it becomes clear that it is the only way to build and use software. In fact, I don’t think anyone will be buying retail applications to run their business in 5 – 10 years. That means there is a lot of growth for SaaS this year and for the next decade to come.
Thank you to Rene’ Lacerte and Jeff Schultz for contributing to this profile.
SMB Financial Productivity Software
There is an increasing number of Software-as-a-Service (or SaaS) firms jumping into the smallest end of the Small and Medium-size Business (SMB) market, and they are offering a variety of financial productivity solutions. This is the fastest growing segment of the economy according to the Bureau of Labor Statistics there are up to 21 million self-employed consultants and small firms in the US.
This has traditionally been the sweet spot in the market for companies like Intuit. Although most customers are somewhat happy with their offerings, Intuit’s offerings tend to be cumbersome, packed with way too many features, hard to use and upgrade.
A new set of SaaS providers has emerged with products designed specifically for the small business owner. These packages are all delivered through the Internet as a service, so no more visits to Best Buy were required. Many of these new software services are very low cost and some were even free, and because of this, the adoption of these products has been rapid.
This Sector Report only covers the incumbent software provider and the promising new SaaS suppliers.
Financial Productivity Software Profiles
QuickBooks Free and $
The clear leader in providing Financial Productivity solutions for small businesses is Intuit. They have now also wrapped a set of small business services to help newly formed companies including payroll, website and logo development. Intuit is now offering a free single user version of QuickBooks, Intuit Online Payroll and Intuit Websites (from the Homestead acquisition) to encourage small businesses to use their financial and business productivity products.
Intuit has been trying to move more of their offerings to a subscription model for several years, without a lot of success. But they are continuing to push SaaS and you will see more SaaS offerings in 2009-2010 including QuickBooks Online.
Estimate millions of Quicken and QuickBooks users/customers.
Public company (NASDAQ: INTU)
New Alternatives
Online money management and budgeting software service. Free
This company has been adding 3,000 customers a month and have been a SaaS company to watch. Mint’s service is delivered through a subscription model but their software is free to use. To set up Mint’s money management service takes about 5 minutes, compare that to other industrial-strength solutions which require outside assistance and offer too much functionality for a small business.
Estimate 850,000 users/customers.
Private company based in California. 30 employees.
Online invoicing, time tracking and expense management.
FreshBooks has had a lot of momentum coming out of 2008 and offers a subscription invoicing service that is designed exclusively for freelancers and small businesses. Their focus is to provide products that are very simple and easy to use as well as integration to other productivity tools like 37Signals Basecamp project management software. FreshBooks offers a free service for a single user and then an incremental pricing structure based on usage.
Estimate over 700,000 users/customers. 60% in the US and 14% in Canada.
Private company based in Toronto, Canada. 30 employees.
On-demand business management suite; marketing, sales, operations and finances.
NetBooks offers a one-stop location for a small SMB to get all of the necessary business services they need to run their company. Their offerings are similar to the breadth that Intuit’s QuickBooks is now offering. NetBooks offers its software on a subscription basis and targets very small SMB’s.
Private company based in California. 30 employees.
Online accounts payables and bill management.
Bill.com provides a simplified way for SMB’s to manage their payables using their SaaS based platform. The company appeals both to SMB’s but also to accounts who can use the Bill.com service to simplify their client’s payable processes.
Bill.com has just formed a partnership with Intacct and integration to QuickBooks.
Private company based in California.
Online account system; banking, invoicing, payables, expenses and contacts.
Xero’s core is a set of financial products with some added contact management and reporting capabilities. Definitely targeting the small business owner with a very simplified SaaS offering. Support for firms in UK and Asia-Pacific. Nice user experience and Mac-friendly.
Estimate over 4,000 customers. Signed up more than 1,000 during December ‘08 and January ‘09.
Private company based in New Zealand. 50 employees.
SaaS-based accounting software.
Kashflow has been in business since 2002 and offers a very simplified online global accounting service. Provides a 60 day free trial and then pricing is based on a per user per month model.
Private company based in the UK. 9 employees.
On-demand income management, expenses and taxes.
Outright used to be gobootstrap.com and targets its products to very small SMB’s by offering dead simple financial products. Outright is offering its products free of charge during its beta test phase. Has integration partnerships with FreshBooks and Shoeboxed.
Private company based in California. 5 employees.
Workday $$
On-demand financial management, expenses, procurement and ERP.
Workday provides a complete financial suite of SaaS-based products that scale for SMB’s and large enterprises. Their ERP suite also provides HR, payroll, benefits, procurement and expenses. Workday solutions require professional services support to install and configure. Dave Duffield, the founder of PeopleSoft is also the founder of Workday.
Private company based in California. 320 employees.
On-demand financial management and accounting software. $$
This product suite is designed for the small business that has outgrown QuickBooks. The suite includes general ledger, purchasing, order management, inventory, contract and revenue management. Intacct has available integration into Saleforce.com, OpenAir, QuickArrow and many industry-specific solutions.
Estimate over 2,500 customers.
Private company based in California. 100 employees.
On-demand corporate travel and expense management.
Although one of the original Software-as-a-Service companies, Concur is focused on the high-end of the SMB segment all the way up the Fortune 500. Deep functionality requires outside consulting assistance to set up. Pricing is a monthly subscription based on usage. Probably not a good fit for a small SMB company.
Estimate more than 6,000 customers.
Public company (NASDAQ: CNQR).
Netsuite Accounting and ERP Suite $$$
On-demand accounting, time and billing, order, purchasing and inventory management.
Netsuite is designed for the company who is looking for a modular on-demand ERP suite. The suite also includes Customer Relationship Management (CRM), eCommerce and Business Intelligence modules. All products are offered in a SaaS format. Company also offers a Platform-as-a-Service (PaaS) framework for Netsuite developers who want to build their own applications.
Estimate over 5,000 customers.
Public company (NYSE: N).
Given the current state of the economy, many individuals are now setting up their own businesses. Using these new subscription-based Office and Finance Productivity tools can not only be very affordable for start-up your businesses but also give the consultant or SMB many of the same capabilities they had at their larger firms.
The good news is that there is no shortage of SaaS-based Financial productivity products out there to choose from and this is just a top line summary of what is available. Many of these products are available at very attractive price points, including many who are free. Using or switching from older solutions not only can save a lot of money but also make SMB’s more competitive in this tough economic environment.
Company: Taleo
Started: 1999
Located: Dublin, California
Public: NASDAQ: TLEO
Geography: Global
Market(s): Human Capital and Talent Management
Products: Taleo Enterprise Edition - Talent Management Suite which includes Sourcing,
Recruiting, Onboarding, Goals Management, Performance Management,
Succession Planning, Compensation Management and Development Planning.
Taleo Business Edition - Talent Management Suite which includes Recruiting,
Goals, Performance Management and Employee Website solutions.
Key Customers: Whirlpool, Hyatt, Macy’s, JP Morgan Chase and HP
Website: Taleo.com
Blog: Taleo Blog – Talent Management Solutions
Recent News:
Taleo Provides Q4 Business Update; Caps Powerful 2008
Taleo Positioned in Visionaries Quadrant for Employee Performance Management Software
Global Businesses Embrace Taleo’s Performance Management Software in Tight Economy
Taleo Named Talent Management Software Leader in Leading Market Research Firm Reports
I asked Al Campa, Taleo’s Chief Marketing Officer a few questions about his business and his view of the SaaS market in 2009.
Did you start out as a Software-as-a-Service company?
In 1999 we were incorporated as Recruitsoft, established our headquarters in San Francisco and launched our Recruiter Web Top product. From the very beginning Taleo has been committed to the SaaS delivery model and was one of the pioneers in SaaS. We provide a comprehensive suite of on-demand talent management applications for businesses of all sizes, across all industries around the world. Taleo was the only SaaS company to design its product from the start for the largest, most complex companies in the world. Most SaaS companies start by meeting the needs of small companies and then work they way up-market.
Why do your customers buy from Taleo?
Three things come to mind – the ROI of talent management, the value of on-demand solutions and the strength of our competitive positioning.
· Even in a down economy, companies continue to see a high level of turnover. And turnover is expensive. Our talent management applications help companies save millions of dollars by reducing or eliminating agency recruiter fees, reducing cost per hire, reducing on-boarding costs, and increasing the effectiveness of candidate sourcing.
· As many organizations are being forced to do more with less, the benefits of using an on-demand solution become clear. Compared to on-premise solutions, our applications cost less, are quick to deploy and provide a rapid ROI.
· As for our competitive positioning, we are one of the few vendors to offer a truly unified talent management solution…we organically developed our recruiting and performance management applications on a single architecture. And we offer scalable, on-demand platforms for enterprises and SMB’s. Plus, we are profitable, growing and have a strong balance sheet.
What do you see as the key trend emerging in the SaaS industry?
The best part of the SaaS model is that it presents opportunities to provide types of innovation that are just not possible with solutions that are installed behind the firewall. The emergence of the concept of Web 2.0 or the next version of the internet is all about collaboration, combining different solutions to make new ones and leveraging aggregate data generated by thousands or millions of users. People see this type of power everyday in the form of the iPhone and it’s ecosystem, Wikipedia, YouTube, and Facebook. Taleo has embarked on an initiative that we call the Talent Grid to leverage new technologies and the aggregate talent management knowledge of millions of talent management practitioners from 3,900 customers as well as a broad ecosystem of partners and subject matter experts. The Taleo Talent Grid will enable customers to collaborate with each other and with Taleo to find solutions to the most pressing talent management and business challenges they are facing.
What is your outlook for 2009?
As we move further into 2009, we believe the overall economic environment will remain difficult and pose challenges. However, we are very optimistic about Taleo’s future and our growth strategy is well defined. Our recurring revenue business model gives us a high degree of visibility, which in turn allows for flexibility in budgeting. We plan to compete in more deals and we also expect our win-rate to improve. We will also compete more in standalone performance management deals and take advantage of international expansion opportunities with our customers. This strategy will allow us to continue to succeed and meet our goals throughout the year.
Thank you to Al Campa, Didi D’Errico and Jaime Spuhler for contributing to this profile.
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