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Company: InsideView
Started: 2005
Located: San Francisco, California
Geography: North America
Market: Sales 2.0
Products: SalesView
Key Customers: Ariba, Borland, IBM, Omniture, Serena Software, SuccessFactors and Synq.
Website: InsideView
Blog: InsideView Blog
Recent News:
INSIDEVIEW NAMED TO JMP SECURITIES’ HOT 100: BEST PRIVATELY HELD SOFTWARE COMPANIES LIST
INSIDEVIEW HARNESSES TWITTER TO POWER SALES
I asked Umberto Milletti, InsideView’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. Since the most complete and valuable business intelligence is available in the cloud, SaaS delivery has been built into our business model from day one. Also, since SaaS has become the delivery model of choice to our target audience – sales and marketing professionals - it was essential that we bring them the intelligence they need in their preferred model.
Why do your customers buy from InsideView?
Our customers come to us because they need to improve sales productivity and accelerate deal velocity. SalesView delivers just that: It maximizes sales team productivity by delivering a one-stop shop for prospecting needs and accelerates the sales cycle by enabling sales people to call the right prospects at the right time. And it does so by aggregating intelligence from thousands of sources, both traditional and social, to ensure accuracy, timeliness, and mostly importantly, relevance.
While having an efficient sales and marketing engine has always been essential, the economic downturn has pushed the need to “do more with less” to priority #1 for most sales organizations. That’s a big reason for the success we’ve enjoyed in the last two+ quarters – the brutal economic environment has actually accelerated the need for and adoption of Sales 2.0 technologies like SalesView.
What do you see as the key trend emerging in the SaaS industry?
With Cloud computing platforms becoming more mature, it’s becoming easier and easier to develop SaaS applications. That’s good news for customers, since as choices multiply, prices diminish. And with the base infrastructure in place, customers can focus on sales and marketing productivity applications, like ours, that sit on top of the Cloud and deliver relevant intelligence to the employee, at the right time and place.
SaaS and Cloud computing are allowing Enterprises to give their employees the same quality of applications and information that have become the norm for Internet users/consumers. Enterprise 2.0/3.0 is happening.
What is your outlook for 2009?
The tight economic environment will continue to force companies to focus on their core assets and competencies. Usually that means revenue generation and IP development. Anything that is not directly contributing to revenue or core company competencies is going to be under great budget pressure. Anything that drives efficiencies in revenue generation or IP development is going to get a lot of attention (we saw this earlier this decade with the explosion of technologies like web conferencing and SaaS).
Thank you to Umberto Milletti, Marc Perramond, Rand Schulman and Raksha Varma for contributing to this profile.
When most companies think about moving towards a Software-as-a-Service business model they often just change their pricing model. You know the drill, instead of charging a big perpetual license fee upfront with some services and then an annual maintenance fee, you switch over to a SaaS agreement that is structured quite differently; with the subscription being spread over the term of the agreement and some upfront services to get started.
Don’t get me wrong, changing your pricing is a big deal if you are a traditional software company. By changing your pricing dynamic you are moving from a Capital Expense (CapEx) to an Operating Expense (OpEx) orientation, this is a dramatic change! It’s even a bigger deal if you are a publicly traded software company. But the overall SaaS business model is really all about monitoring and measuring metrics, ratios and statistics.
I ran into a very interesting company recently, OpEx Engine, that has done extensive benchmarking of SaaS and technology companies, and has complied a library of operational metrics for over 50 public and privately held software firms. Lauren Kelley, OpEx’s CEO is an ex- Art Technology Group (ARTG) executive who realized that smart technology people were looking for these types of real-world benchmarks and operating metrics. Lauren’s team has spent the last two years accumulating a lot of really value information. I can’t tell you how many times I have looked for good comparative metrics on how much companies typically invested in sales and marketing, research and development and G&A when building out a business model. For instance, did you know that of all of the publicly-traded SaaS companies that DealerTracker (TRAK) has the lowest R&D investment as a percentage of their revenue? (4.9%) Did you also know that Salesforce.com (CRM), Omniture (OMTR), NetSuite (N), and SuccessFactors (SFSF) all spend more than 50% of their revenues on sales and marketing? That’s an easy one but you should definately check out the free information that Lauren provides on her site.
There are many other metrics that are needed to successfully run a SaaS company but one of the most important is your overall cost of sales and marketing. Understanding what your true Customer Acquisition Costs is a critical SaaS business performance indicator. I was recently at the SIIA On Demand Conference in San Jose where I heard Josh James, the CEO at Omniture present his sales and marketing modeling methodology, that he has dubbed the ‘Magic Number’ for SaaS companies. Since it would probably justify a completely separate post, all I can say that this is a really innovative way to determine if your % of sales and marketing spend is either too much or too little. Phil Wainewright wrote a great piece on the Magic Number - When to spend cash in a SaaS business - which is definitely worth reading. What Omniture has done really well is to figure out the overall profitability of their clients, market saturation, marketing effectiveness and the number of Quota Bearing Sales Reps (QBSR’s) that are required to grab market share. It’s cool.
Other sources of good SaaS market information and metrics are:
TripleTree, a boutique investment bank which conducts some solid SaaS research, Cutter Consortium, Saugatuck Technologies, and Jeff Kaplan’s firm Think Strategies.
If you hear of any other good ones, let me know.
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