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Company: Marketo
Started: 2006
Located: San Mateo, California
Geography: Global
Market: Marketing Automation
Products: Lead Management and Sales Insight
Key Customers: Allegis Group, Aricent, Avocent, D-Link, EMI, Hughes, Kelley Services, Knology, MSC Software, McKesson, Reed Business, Sharp, SumTotal, Software AG, Southco and Sentient Jet.
Website: Marketo
Blog: Modern B2B Marketing
Twitter: @Marketo
Recent News:
Marketo Surpasses 500 Customers in Just Two Years
Marketo Raises $10 Million in Series D Funding
Marketo Earns Global Enterprise Status in Independent Research Firm’s Demand Creation Provider Grid
Marketo Teams with Symplified to Extend Enterprise Security
I asked Jon Miller, Marketo’s Chief Marketing Officer a few questions about his business and his view of the SaaS market in 2010.
Did you start out as a Software-as-a-Service company?
We definitely started out as a SaaS company after myself, Phil Fernandez our President and CEO as well as David Morandi our CTO, emerged from our experience at Epiphany.
Our collective vision for marketing automation was to remove as many barriers to product adoption as possible. The market is littered with failed marketing software companies, especially on-premise firms. We wanted to build a world-class marketing automation solution that was easy-to-buy, easy-to-own and easy-to-use for all types of front office functions.
We knew that it was almost impossible to get big capital budget dollars for marketing automation systems, in fact, the marketing department was usually the last in line to get any money, but they did have large discretionary operating budgets. Our customers needed to have a marketing service that you can stand up quickly and show rapid value because marketing executives can’t afford to hire people to make the system work, they had to push a button and then run their first campaign.
Why do your customers buy from Marketo?
Marketo’s target customers are mid-market and enterprise divisions of large business-to-business companies. In the last two years we have sold to more than 500 customers. Marketo is serious enterprise software and not just a pretty user interface. In fact, 25% of all our customers are enterprises, not just small or medium businesses.
Over the last ten years customers have purchased complex marketing products that were dependent on buying from sales and then getting installed and trained by consultants. The current expectations have changed about marketing software and marketing and sales executives now want immediate access to all the information related to their customers and prospects. Many sales and marketing processes have not changed but there is clearly a new buying process that many companies are following. Marketo helps our customers align their selling processes to these new buying processes.
For example, today’s demand generation best practices now requires a much wider funnel of potential buyers, behavior-based lead scoring, lead nurturing, with analytical tools that can save precious time and deliver better qualified leads. With this focus on efficiency, it is now possible to unlock the value of our customer’s existing lead databases and their sales teams can close more business.
With Marketo, customers can map out their own unique buying process, team selling approach, define multiple touche campaigns and make marketing and sales much more of a science than an art. We re-imagined how the marketing professional could map out their campaigns, without having to use Visio, because the process would be more conversational, even object-oriented. Marketo campaigns are listening to various sales and lead processes and then have agents kickoff automated actions. This makes our products easier to learn and our customer’s marketing campaigns more relevant and efficient.
We also offer smart integration with Salesforce.com is a huge advantage for us. For example, a customer can add a new schema objects in Salesforce and Marketo will make the update automatically. Marketo has developed our API natively for Salesforce but we can also work with other CRM systems like NetSuite, Siebel and Microsoft Dynamics.
Our products include Marketo lead management, which is marketing-focused and Marketo Sales Insight is sales-focused and is built on top of Salesforce.com’s Force.com platform.
A newer capability of ours is around social networking, where we can provide real understanding about what our customer’s prospects are doing on-line, like the pages they have visited, search terms they are using, but we can also help to understand what prospects are doing off-line, because that is equally as important. Marketo has integrated into Twitter and now customers can track activity, and follow-up with prospects using traditional methods like email or the phone, and in the future they can even send direct messages back through Twitter.
What do you see as the key trend emerging in the SaaS industry?
We think the Marketing Cloud initiative is a something really interesting. Salesforce has left some white space around marketing because it is such a diverse functional universe and Marketo has worked to put together an alliance of complimentary marketing technologies.
The Marketing Cloud partnership includes Demandbase, Jigsaw (which was just purchased by Salesforce.com), PR Newswire, Jive Software, Clickability and Conductor. There are ten SaaS companies in our alliance, which is the vision of the future marketing integration.
For example, a customer can do a search with Google which is optimized by Conductor;
· Then you see an add you like and click on it and then you land on a Marketo landing page,
· Then Demandbase knows the prospect’s industry,
· Clickability helps target a specific industry and then promotes a webinar,
· ON24 manages the webinar, sends reminders attend, and
· then you close the loop using PivotLink analytics.
Over time we will be able to support more and more composite marketing processes.
What is your outlook for 2010?
During 2009, most SaaS firms did well, but we did really well because our solutions are easy-to-buy. Our 2010 is on fire! We are on track to be on par with leading SaaS firms like Omniture, NetSuite, and Taleo’s and their growth numbers. The SaaS market continues to explode and we just need to continue to execute to be successful.
As Zach Nelson kicked off last week’s Netsuite’s Partner and Developer Conference – SuiteCloud 2010 in San Francisco, there was a real focus on the importance of their platform as a way for partners to play a critical part in helping to take his company to the next level.
They kicked of the special launch event that featured a video of some of their key partners including TrueCloud, InsideView (who has been profiled in this blog), Aria, Hein & Associates, PaceJet, RootStock Software and Demand Solutions Group.
I think it is great with companies are building their business around their partners and creating a cool ecosystem where everyone can make money… more on that in a minute.
Zach then covered some Cloud Computing trends;
· Fake SaaS – He compared the NetSuite offerings, which are Cloud-based to Microsoft’s GreatPlains offering which is just a hosted version of their same on-premise offering. Still single tenant, version locked and requires Citrix to make it work like a true SaaS application. These types of business models will find it almost impossible to make money using a Fake SaaS. Other vendors mentioned here were Lawson and SAP.
· SaaS-based Financial Systems Are Popular. He showed a Gartner market slide (from 2008) that showed NetSuite as the fastest growing FMS provider.
· Traditional License Software Firms Are Hurting – This is nothing new because Saugatuck Technologies, Ray Wang from Altimeter and Montclair Advisors have all written about this but this slide says it all…
Customers are moving away from the old software model.
· The Cloud can now handle complex business processes. This has been demonstrated by vendors like NetSuite, Workday (Flextronics), Amazon AWS and SuccessFactors (Siemens) servicing very large and complex clients.
· Customization is no longer the Achilles heel of Cloud applications. In fact, it was argued that customization with NetSuite is now a killer feature of their Cloud offerings.
· Channels are emerging as an important component of a successful Cloud business model.
· The Cloud is getting social. With applications like Twitter, Facebook, LinkedIn, blogs, Fluid, Mzinga, InsideView, applications are more focused on communities and content than ever before.
There was a funny segment that discussed the complexity associated with the development of years of on-premise software, which he called an infrastructure hairball. It is much more cost effective to manage a single architecture, database and system of record. He mentioned that the cost of managing an SAP system (ala hairball) was approximately 3% of a company’s revenues, while operating their system was only 0.1%.
Then Zach got back to the partners and referenced a number of applications that are being built on top of the NetSuite platform – SuiteCloud , like RootStock Software’s MRP application. Other providers who have integrated into SuiteCloud include Amazon Web Services, Google, InsideView and HostAnalytics.
I thought the most interesting part of this session was when they brought IRON Solutions and NewHolland on stage to discuss the vertical application they had built on top of SuiteCloud.
New Holland has approximately 9,800 customers and they wanted to automate and enhance their relationship with their partners/distributors. They started working with NetSuite in 2007.
IRON Solutions is the Kelly Blue Book of agricultural equipment and offered a very complex product configurator along with CRM capabilities that allowed distributors better create and manage pricing and leads. They launched their new products built on NetSuite, IRON HQ for new product promotions, IRON Builder for pricing and lead management, IRON Guides for appraisal and trade and IRON Search for promotion and sales.
New Holland wanted to balance both the science and art of their business to move more of their customers to the web. Darwin Melnyk, CEO from IRON Solutions and David Greenberg from NewHolland whipped out their iPads and demonstrated their new applications.
Increasingly these type of vertical partner applications are going to be popular with customers looking for more tailored solutions for their specific businesses. NetSuite has more than 200 channel partners and sales through their channel has grown by 40% on a compounded annual basis. Which is quite healthy given our recent recession.
New partner announcements included;
· ISV/OEM’s – JCurve Solutions
· Systems Integrators – Hein & Associates (a Top 50 CPA firm), Fujitsu that is forming a strategic relationship for Japan with NetSuite and WIPRO who is building a practice around NetSuite OneWorld.
· BPO – GenPact is building an ERP Outsourcing business on NetSuite
I mentioned at the beginning why working with partners like NetSuite can be really profitable and with their new SP100 program, channel partners can get 100% of their first years revenue when they move older client/server applications to NetSuite.
Overall, it is nice to see major players embrace their partners and give them an opportunity to build their business and help their partner - a real win-win for everyone.
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Company: Cloud9 Analytics
Started: 2007
Located: Redwood City, California
Geography: Global
Market: On-Demand Performance Management Solutions for Sales
Products: Cloud9 Pipeline Accelerator Suite and Cloud9 Analyst Suite.
Key Customers: Aspect, Avaya, Beckman Coulter, Inc., Carestream Health, Inc., D&B, Jigsaw, MySpace, Rolls-Royce, Schneider Electric, Siemens Enterprise Communications, Splunk, Thermo Fisher Scientific, Thomson Reuters Healthcare
Website: Cloud9 Analytics
Community: Cloud9 User Community
Twitter: @Cloud9Analytics
Recent News:
Cloud9 Achieves Breakout Performance in 2009
Karen M. Steele Joins Cloud9 Analytics as Vice President, Marketing
Cloud9 Analytics Integrates Goals, Bookings and Sales Data For salesforce.com Customers
I asked Swayne Hill, Cloud9 Analytics CEO a few questions about his business and his view of the SaaS market in 2010.
Did you start out as a Software-as-a-Service company?
Yes, from its inception, Cloud9 has been a 100% multi-tenant platform for performance management applications like sales pipeline management and forecasting. The company is also SAS-70 certified.
Why do your customers buy from Cloud9?
Cloud9 Analytics provides SaaS performance management applications designed for customer-facing front office functions including sales, operations, marketing, services and support. Cloud9 solutions help companies optimize revenue by providing real-time visibility into what’s changed in key management processes such as managing the sales pipeline or managing the forecast. Cloud9 solutions deliver sales leaders and executives with actionable insight into the state of their business with a single, consistent and flexible view. Unlike other business intelligence tools designed for the IT department to build Ad Hoc reports, Cloud9 provides domain-specific analytic applications delivered through a software subscription, that are immediately relevant and consumable for line-of-business users. Using Cloud9 solutions, customers report increased win rates and forecast accuracy leading directly to increased revenue.
What do you see as the key trend emerging in the SaaS industry?
As Cloud Computing platforms such as Salesforce’s Force.com, Amazon AWS, Google’s App Engine, Intuit’s IPP and others emerge for Cloud Computing development, there will be greater opportunity for ISVs to provide solutions and broaden their reach.
What is your outlook for 2010?
Cloud9 sees continued rapid expansion of SaaS business analytics, driven by trends like:
Technology: Smarter automation support for key management processes that are currently bogged down by today’s disconnected manual approaches.
Data Transparency: Businesses need to stem the flow of disappearing data from transactional systems like CRM and put that data to work on the front lines.
Economic Turnaround: The economy will expand again and business will invest in technology that creates competitive advantage - SaaS will become the model of choice with minimal upfront costs and quick time-to-value.
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