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SuccessFactors – SuccessConnect 2011
Montclair Advisors did a SaaS business profile in April 2009 and recently participated in the company’s SuccessConnect 2011 in San Francisco, where we were able to hear from key members of their management team about recent news and a business update.
New Branding
SuccessFactors had changed their focus about two years to be corporate performance management focused. Darryl Dickens their new chief marketing officer announced that although Business X is still the core positioning, they wanted to reach back out to the HR buyer. Their new tag line is now more HR friendly; ‘It’s time to love work again.’ (… and by the way, I like the new branding).
With the new branding SuccessFactors wanted to re-focus their messaging around being a proven, visionary Cloud-brand for HR and business performance solutions. This new branding means there is a new logo, website, and icon system.
Part of the strategy behind the re-branding has to do with the new products and capabilities now available across the SuccessFactors product portfolio including collaboration (CubeTree), learning (Plateau and Jambok), reporting and analytics (YouCalc and Infohrm) and HRMS like Employee Central. The new brand is a laminate designed to put a logical wrapper around the suite, which can help to rationalize product bundles, pricing and packaging.
Employee Central 2.0
As customers have grown more comfortable with the Cloud, those who have older versions of PeopleSoft are now looking for alternative options for their core HR systems, and that is where Employee Central fits in. The Employee Central solution has been built for the BizX suite to integrate talent management, analytics, collaboration as well as employee services. Employee Central 2.0 was made GA in March 2011.
Most talent management providers have shied away from offering a system of HR system of record. SuccessFactors sees a real opportunity to integrate their offerings as well as a potentially large market for new Cloud-based HRIS offerings. As Workday offers not only core HR solutions but also talent management applications, both of these firms are chasing a growing replacement market in the SMB and enterprise markets.
Employee Central offers a basic system of record but stops short of a full HR and payroll system. SuccessFactors has decided to partner for payroll with Patersons, Ceridian and Meta4.
Plateau
The biggest news was that SuccessFactors purchased SaaS-based talent management provider Plateau Systems in April 2011 for $290 million in cash and stock. This was the largest acquisition to-date for SuccessFactors and marked the first time that the company had purchased a talent management application instead of an add-on technology. Plateau has a large and satisfied customer-base of both commercial and federal accounts.
Doug Dennerline, SuccessFactors new president (ex-Salesforce.com) was very clear that they were planning on getting very close to Plateau’s customers and assure them that they will allow them to do what makes the most sense for their businesses. Unlike the other learning-related acquisition, Jambok, Plateau offered an enterprise-class Learning Management System with a world-class customer-base. Plateau not only adds revenues and customers but also provides an interesting SaaS architecture and platform that SuccessFactors may be able to leverage to service their their very largest customers.
With this business combination, SuccessFactors is now one of the largest HCM SaaS providers based on total revenues, customers and numbers of users. After all of these acquisitions, it is clear that the company now has many different growth engines moving into 2012. Based on our briefing with the very seasoned SuccessFactors management team, it will be interesting to see how they are able to integrate all of these offerings and manage all of these potential business opportunities.
Workday 13 Update
Workday provided a preview of the latest product update, Workday 13 at the end of April. This appeared to be a major release of functionality across their entire ERP suite including Workday HCM, Workday Payroll, Workday Initiatives (Work Management), Workday Financial Management, Workday Spend Management as well as some new user experience capabilities.
This was the first update we have received in about two years so it was really impressive to see how much progress the company has made not only with their products but also with their overall business. Here are some key facts:
- 200 customers and more than 130 of them are live
- Flextronics have over 100,000 employees using their systems
- Over 1,000,0000 employees are using their various products across their customer base
- Targeting an IPO for the second half of 2012
- Releasing about 3 updates per year, compared to 1 every 18+ months for their ERP competitors
Workday HCM
New capabilities include compliance functionality related to the new US healthcare regulations which will touch benefits, employee data as well as compensation. These HCR regulatory changes also have a major impact on workforce cost so Workday is also delivering functionality related to better managing salary data for benchmarking, compensation and overall manager decision support.
As I mentioned, the last time I saw a Workday product demonstration, they didn’t very much in the way of talent management functionality but that has really changed. They now have compensation planning, performance management, succession planning and competency management. They have wrapped these capabilities in a robust in-line analytics and decision support framework. This framework includes pre-packaged reports and some really slick user interfaces for workforce management. This screen shot is of their 9-box interface for their succession planning product. What I thought was really cool is how they have integrated their position management and organization charting capabilities right into this 9-box interface for their Talent Matrix. These capabilities look very competitive to most of the other leading SaaS TMS players in the market.
For capabilities that they don’t currently have in the their talent management products like recruitment they will continue to partner with leading specialists like StepStone (now Lumesse) who acquired MrTed and Taleo.
For learning management they have built an intelligent interface into Plateau (recently acquired by SuccessFactors).
When they demonstrated the Workday 13 product, the one thing that popped out at me was the user experience and how engaging it was. The user interface appeared to quite flexible, allowing the user to drill down, or across to access important information, as well as the use of compelling charts, graphs and dashboards. I thought it was interesting to see how an object oriented architecture can really impact the overall usability of your SaaS products.
Workday Payroll
For an ERP system it is very useful to provide a payroll solution to tie into. Workday’s product has been built from the ground up to be a SaaS-based payroll solution. Workday Payroll was launched in 2009 and supports US based payroll requirements. The news for Workday Payroll is a new partnership with OneSource VHR for payroll co-sourcing services such as payroll settlement, tax and garnishment administration. These are common requirements for organizations with very large workforces.
Workday 13 still offers integrations into third-party payroll providers and payroll aggregators such as Patersons and ADP.
Workday Mobility
Seems like every HR software company is now offering a mobile application for users. The news in this area was the announcement of limited availability of Workday for the iPad. Again, one of Workday’s strengths is user interface design and this product is no exception. The product is not intended for heavy transactional use but more for the executive or manager that wants to easily browse through talent profiles, monitor their Chatter-like personal Workday Workfeed or gain insight into their workforce by running a report or analytics. The general availability for Workday for iPad is planned for Workday 14.
Overall, I thought that the Workday 13 release contained some useful improvements and the product is really impressive. Given their 3 times a year release cycle, they will continue to innovate at a brisk pace which will be difficult for the traditional ERP competitors to keep up with. Also, their laser focus on usability will also become a huge differentiator when looking at incumbent solutions, as long as Workday can deliver the necessary functionality and security that enterprises are going to continue to demand.
Company: eQuest
Started: 1998
Located: San Ramon, California
Geography: Global
Market: Human Capital Management – Recruiting and Job Boards
Products: eQuest Job Posting Distribution
eQuest OFCCP Compliance Job Posting Package
eQuest P2 (Prophesy2)
eQuest P3 (Prophecy3)
Key Customers: Hewlett Packard, Johnson Controls, Starbuck’s, Liberty Mutual, Home Depot, AT&T
Website: eQuest
Recent News:
eQuest Extends Agreement with Taleo Business Edition to Provide Ongoing Global Job Posting Support
MrTed and eQuest Release Job Posting Delivery Services through SmartRecruiters
I asked John Malone, eQuest’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?
Yes – actually, prior to it being called SaaS. eQuest’s technology and business models required this type of functionality to best integrate with the Applicant Tracking System (ATS) and ERP markets and to give customers increased flexibility.
Supporting daily job board data formatting changes is like shooting at hundreds of moving targets at once. SaaS was the only option for this type of business.
Why do your customers buy from eQuest?
We have a proven service that our ATS and ERP customers trust. With the present recession, budgets for hiring are naturally being reduced and companies want to make sure that their recruiting dollars are being spent at the most effective career sites. Our metrics and analytical software tools, like Prophesy 2 and 3 can make on-the-fly evaluations of the site’s effectiveness prior to posting a position.
Clearly companies find this a unique capability and an invaluable tool as part of their reason for using our services. In fact, we recently won the 2008 HR Executive’s Product of the Year award for Prophesy 3, our innovative job board evaluation tool, which is the first solution that allows a recruiter to follow a candidate all the way through the hiring process from posting the job, to their first view on a job board to the final hiring.
What do you see as the key trend emerging in the SaaS industry?
Simplicity as a Service (SaaS)
Most corporations are becoming increasingly frustrated with the long deployment cycles, high costs and complicated upgrade processes demanded by traditional software applications. These are common complaints about the large traditional software providers.
Software as a Service (SaaS) has become one of the fastest growing segments of the IT sector, because it provides customers with software solutions that can be implemented quickly, while avoiding the incremental infrastructure costs traditional with on-premise applications.
What is your outlook for 2009?
New opportunities in 2009 include global expansion - opening offices in Europe and Asia; continued feature enhancements to our existing technologies; and plans for introducing some exciting new products. We are expanding in new sub-sectors of the market and expanding customer base through new partnerships around the globe.
Thank you to John Malone for contributing to this profile.
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