Here is our updated Public Company SaaS interactive spreadsheet.  Enjoy!

After our post on January 26th we got several great comments about the cost of starting a SaaS company.  It definitely takes a commitment to build a true SaaS company, especially when you consider some the following facts about the 15 public companies that I tracked in my high level analysis:

• Average Start-up Capital Required:                                   $44M
• Average Time Required from Start-up till IPO:                 7 years
• Average Capital Required per Year till IPO (Burn):             $6.8M
• Average IPO Proceeds:                                                    $76M
• Additional Capital Raised After the IPO:                           $243M
• Average Total Capital Raised:                                          $363M
• Average Market Capitalization:                                      $1,262M
• Companies Who are Profitable:                                            8

The costs of getting a SaaS start-up off the ground are substantial but only about half of the firms we tracked actually started out as a pure SaaS company.   These other Cross-Over firms started out as either Application Service Providers (ASP’s) or were traditional On-premise ISV’s that move to SaaS through a combination of organic migration or through a series of acquisitions.  Companies like Concur, Kenexa, Taleo and Ultimate Software have all transitioned to SaaS from an on-premise heritage.

Montclair Advisors - SaaS Start Up Costs - Pre IPO

The shortest time to go from start-up phase to an IPO was 4 years and the longest was 13 years.  Most of the firms we tracked were founded between 1997 to 1999, which was prior and during the Internet Bubble.

When these firms went public they raised a range between $30M (LivePerson and Ultimate Software) to over $150M (DealerTrack and NetSuite), but on average they raised about $75M.  All the firms then went on to do additional capital raises from $32M (LivePerson) up to $750M (DealerTrack) but on average each raised $243M!   The total capital raised, when considering both pre IPO, IPO and post IPO capital raised, these firms raised between $100M (LivePerson and Ultimate Software) to close to more than $500M (DealerTrack, Salesforce.com and SuccessFactors).

Montclair Advisors - SaaS Start Up Costs - Post IPO

After going public, this SaaS market basket of companies have done well as a group.  The majority of the firms are profitable, which makes for solid cash flow performance, revenue visibility and overall stability of the company’s stock, for the real SaaS firms.

The most valuable company, based on their Market Cap is Salesforce.com at more than $8B and there are at least 4 other SaaS firms with valuations over $1B (Blackboard, Concur, NetSuite and SuccessFactors).  When comparing the amount of capital raised to the market valuation, the 5 best performing firms are Salesforce.com (.09), Ultimate Software (.13) , Concur (.19), RightNow (.22) and LivePerson (.31).

Montclair Advisors - SaaS Start Up Costs - Market Caps

This year, as the economy improves, promises to launch a few new SaaS IPOs and we will continue to track this core group as well as a larger group of Hybrids and Cross Overs and will periodically report back with our findings.

When speaking with entrepreneurs and investors about the investment required to start up a new Software-as-a-Service company, I often refer back to this list.   At Montclair Advisors thought this would be a handy reference for those looking to start a SaaS company during 2010.

Looks like you might need a money tree to start a SaaS company, but for those that reach critical mass and go public, there is a tremendous payback.  This is information has been gathered from various sources including Wachovia, CrunchBase and Google Finance.

Happy New Year!

In February Montclair Advisors launched our SaaS Business Profile Series and have been focused on covering as many SaaS companies as possible during 2009. As it turns out we were able to profile more than 30 SaaS companies of all types including pure SaaS firms, Cross-Overs and Hybrids!

We would like to thank all of the executives and companies that participated during 2009 and we look forward to continuing to follow their progress during 2010.

What we learned from these thirty-four profiles:

• SaaS is an evolving business model - It is still a new concept and few firms are running a pure subscription software models. Beware that there is still a lot of “Fake SaaS” out in the market overall.
• There are many variations of SaaS - these variations are based on the company’s starting point, the market they serve and the types of products they sell. Interestingly, Salesforce.com is actually not a very representative SaaS business model for the broader market.
• It takes time to build a real SaaS company - For many SaaS firms it takes up to 7 years to reach breakeven and nearly 10 years to ultimately gain scale with their business model.
• Cross-over providers will still need to hold onto their on-premise legacy for the foreseeable future, because it is hard to switch customers to SaaS all at once.  It is also difficult to upset your maintenance revenue streams, especially during tough economic times.
• The Great Recession has permanently changed the Software buyer’s behavior towards SaaS due to the lack of available capital. When you see SAP and Oracle and many of these profiled ISV’s moving their businesses to SaaS, you know it isn’t a fad.
• Penetrate and Radiate. The successful SaaS firms have started small, with easy to sell, easy to consume solutions.  They then develop additional software, services and content solutions to sell back into their installed base.

Here is an overview of the thirty-four companies Montclair Advisors covered in 2009:

Profiles by SaaS Category

Pure SaaS:        15     Started out and only offer SaaS subscription services

Cross-Overs:    11      Started out as on-premise, but have fully transitioned to SaaS

Hybrids:             8      Continue to offer SaaS services AND on-premise software

Public vs. Private

Public:               6

Private:             28

Profiles by Age of Company

0-5 Years:         9

5-8 Years:        10

8+ Years:         15

M&A by Companies

Sell-side:            2    Mint.com by Intuit for $170M and QuickArrow by NetSuite for $20M

Buy-side:           4    Lithium Technologies (Keibi Technologies), RightNow (HiveLive), Taleo

(Worldwide Comp), Xactly (Centive)

Fundraising Public & Private

What was also interesting to see is that even in the toughest economic climate since the Dot Com meltdown, that many firms that were profiled were able to raise capital in both the private and public market places.   The big winners were SuccessFactors who raised more than $200M in a public offering and Workday, raised an impressive $75M private round that was led by New Enterprise Associates.  As the economy begins to turn in 2010, expect to see more SaaS firms going back out to raise growth capital.

We hope these profiles have been helpful to our readers and we will continue to profile interesting SaaS firms in 2010, because we learn a lot about our emerging industry and we will continue to build back into the Montclair Advisors advisory services that help our clients become successful SaaS companies.

Please let us know what you think, because we would welcome any ideas on how to improve the Saas Business Profile Series for 2010.  Just drop me an email at kevin@montclairadvisors.com.

In Charles Darwin’s landmark work on the Theory of Evolution, he stated that “…Natural selection acts only by taking advantage of slight successive variations; it can never take a great and sudden leap, but must advance by short and sure, though slow steps.” Based on what has been happening with our economy over the past six months, the Human Capital Management software world is going to be forced to do a quick evolution.

Times are tough; just consider the global economic slowdown over the past three years. In 2007 it was the sub-prime mortgage crisis, in 2008 it was the Banking crisis and in 2009 we are beginning to see the Human Resources crisis.

This is very different environment for HR professionals than the old War for Talent era that was discussed by industry experts over the past five years; this current crisis is more related to a dramatic reduction in jobs in the economy and unemployment approaching 10%. Human Resources related budgets and headcount have been cut way back in an effort to stem the financial tide. Unfortunately most companies were not ready to eliminate anywhere from 5-30% of their workforces overnight. Not only were they not prepared for this change but they probably don’t completely understand what the future impact of their actions will be for their workforces. These dramatic changes have left HR in a precarious position looking forward because they have little in the way of staff or resources but their charter remains the same.

HR’s Rapid Evolution

As someone who sold HCM software for the last 12 years, it was always part of the sales pitch that the HR organization is always expected to do more with less. Now that the environment has really changed, when senior executives now say to HR, ‘do more with less,’ they really mean it.

Just like in natural selection, the HR survivors need to evolve. So in this brave new world, you no longer have the level of resources that that you have taken for granted for years. Resources like IT support, capital dollars in your annual budget, a team of people to work on projects and time. You may ask, how do I evolve? With dramatically less people, budget and basically the same responsibilities, you need to automate as much of your workload as well as your personal interactions. In this new world, the human touch is going to be at a real premium when it comes to HR.

Well - now that you are completely depressed, let’s review some ideas on how you can be an HR survivor. Did you know that most companies have up to 200 different HR suppliers, depending on the size of your company? Do you really need all of them? Since you are now in a zero sum budget exercise, start looking at your operating expenses as one big pot of money and start determining what is essential and what is optional. As you start your process, you need to free up budget to fund critical automation projects that can enable HR to continue to push along its strategic objectives. This may actually be a process that your IT business partners might actually be willing to help you with, since they are feeling HR’s pain like never before.

Natural Selection

So as you start thinking about your natural selection budget project, you should start to build out your game plan by trading out your old software for new software. My general conclusion about software is simple, old software is bad and new software is good.

Let me explain…

Many of the current Human Capital Management software providers evolved from PeopleSoft. PeopleSoft was the leading HR software provider in the market for nearly twenty years and spawned a complete suite of Enterprise Resource Planning applications including benefits administration, payroll and other HR applications. When PeopleSoft was purchased by Oracle in 2005, Oracle became the dominant provider but they appear to have no clear future plans for their HR software. So you need to continue to pay maintenance for old software, which keeps getting older.

When thinking about natural selection for HR software, think about the clear disadvantages in the current environment for your old school software provider:

• Software requires a large capital investment. This might be really difficult to get funded in our current environment, no matter how critical the software is to your company’s objectives.

• Implementation projects are both long and complex. Lots of investment to support customization and an expensive team of consultants who will live on-site for months or years. The consultants have to install your software in your data center, which will require a significant investment in hardware and infrastructure.

• Massive software upgrades. Whether it is moving from PeopleSoft 8 to PeopleSoft ? or to the latest version of SAP, these upgrades are expensive and require a lot of internal support resources and a big hardware investment.

• Lack of flexibility. The older software providers typically have rigid products, which make it tough to make even basic changes to features, reports or anything else. This is also a big disadvantage of buying all your HR software from a single vendor, like Oracle or SAP.

• Don’t play well with others. Ideally all of the software works together to make it easier to configure workflows, data elements, reports, and analytics because your data is sitting in a lot of different systems. If your software isn’t open to working with other systems, it can get really expensive, and you don’t have any budget to glue everything together.

Now you can see why old software is bad… and why they may be going the way of the dinosaur in the next 5-10 years. That’s right, even Oracle and SAP. Remember MSA and McCormick & Dodge!

What attributes should you be looking for in your future surviving HCM software suppliers?

These survivors have these clear market advantages:

• Software-as-a-Service. You have probably heard this term but it is simply when the software company rents you the software and you subscribe to their service the next 3-5 years. Because of this approach to delivering software as a service, SaaS firms are forced to be more cost-efficient because they get paid over time. SaaS software is delivered to your users through the Internet, which means your IT department doesn’t have to have to buy or support any software or hardware – this can save your company a lot of money.

• Long-term relationships. Because you rent the software, your SaaS provider has a vested interest in keeping you happy because you will want to continue to renew your subscription to the their software. Unlike old software firms who would sell you their software and disappear, SaaS firms are encouraged to stay close their clients and listen to your input.

• Incremental changes. It was not only the expense but also the tremendous organizational disruption associated with large software upgrades that customers really dislike about the old software model. SaaS clients enjoy a ongoing stream of transparent upgrades, that fix bugs, add features and their software literally evolves over time.

• Less extra costs. Since SaaS providers host their software in their own data centers, your company doesn’t need any IT staff to support their software or infrastructure (servers, firewalls and security) typically required to run HR applications.

• Configuration. SaaS firms offer more flexibility in the way they set up your software. Unlike the older software firms that bring a cast of thousands to customize and install your software, SaaS companies can set up an initial version of your software in minutes or hours rather than in months. Then once they understand your business needs, the software can be configured without custom programming. This approach saves you both time and money.

• Open for business. In this new world it will be difficult for any company to purchase every type of HR software from a single provider, so it is important for software to communicate and share information with many different software packages. This sharing will enable you to automate as many HR tasks as possible, allowing you to do more with fewer resources over time.

Slow Evolution of HCM Software

A little known fact is that the original Software-as-a-Service provider is Automatic Data Processing. They have been delivering payroll and HR services as a service, for nearly fifty years. Their offerings started out as a basic payroll service and their internal software just helped them to deliver their service more efficiently to their clients.

In the 1990’s, the next generation of on-line solutions appeared - where on-premise software was transitioned to being hosted in providers’ data centers (commonly referred to as Application Service Providers). A number of HR ASP software providers emerged including: Employease, PeopleSoft eCenter, and Workscape.

Then about ten years later, the conversation evolved from just hosting traditional software and a new model emerged - on-demand software, that provided a pay-as-you-go pricing model along with streamlined upgrades and new support processes. Some of these on-demand providers included: Authoria, Kenexa, SumTotal, Stepstone and Ultimate Software.

Then just a few years ago SaaS providers started to gain momentum. These firms really looked at delivering their software truly as a service and never delivered it on premise, sold in the traditional way. The HR SaaS providers always delivered their software over the Internet, with a modest amount of services, no upgrades, per-employee-month pricing and self-service support. Many better known HR SaaS providers include SuccessFactors, Taleo and Workday.

The next generation of HCM software might be based on Cloud Computing, where the SaaS providers no longer own their data centers and use providers like Google or Amazon.com to deliver world-class infrastructure support at on a pay-per-transaction fee. This approach could drive down costs, complexity and make a wide range of traditionally expensive HCM software much more affordable for small and medium-sized businesses.

Darwin Speaks

The HCM software market has undergone a number of wide ranging transformations over the last thirty years. We come back to the premise of old software is bad and new software is good. Old software is bad because it is expensive to maintain, modify and upgrade. Software teams that have the experience of working on traditional software but now working at new companies where they are using modern techniques might find it difficult to make their software better, faster and cheaper.

As you think of your portfolio of HCM software providers, maybe Darwin could help. And if Darwin were alive today, and knew about Human Capital Management software, I think he could put many of your company’s providers into these categories:

• Endangered – they are doing some of the right things to turn themselves into survivors but haven’t turned the corner just yet. These are the providers you need to keep a close eye on, just in case they become extinct.

• Extinct – those providers who are on the downside of innovation, living off of your precious maintenance, old architectures, delivered on premise and probably won’t be around for the long term.

• Survivors – those software firms who are worthy of your investment and will be in the market for the long term.

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.

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 FreeBUG

eQuest P2 (Prophesy2)

eQuest P3 (Prophecy3)

eQuest Interactive Media

Key Customers: Hewlett Packard, Johnson Controls, Starbuck’s, Liberty Mutual, Home Depot, AT&T

Website: eQuest

Recent News:

eQuest to Release 2008 Job Board Candidate Traffic Patterns and Statistics in Official Report Slated for February, 2009

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.

Company:            MrTed, Ltd

Started:               1999
Located:              Across the globe with 10 offices – Headquarters in London, UK
Geography:         Global presence, with strong experience in Europe
Market:                Human Capital Management – Talent Acquisition / Recruiting Technology
Products:             MrTedTalentLink™ - Enterprise Applicant Tracking System (ATS)
                            SmartRecruiters™ - Small and Medium Businesses (SMB) ATS
Key Customers:   Siemens, Heineken, Levi Strauss & Co, TomTom, Tommy Hilfiger 
Website:               MrTed Website
                             SmartRecruiters Website
Blog:                    SmartRecruiters Blog

Recent News:

Leading European RPO Ochre House selects MrTed to support its European delivery model

MrTed releases latest version of flagship Talent Acquisition Solution

MrTed Taps eQuest to Provide Job Postings on SmartRecruiters 

Ready, Set, Recruit! Talent Acquisition Leader MrTed Launches Free Applicant Tracking System

Free Applicant Tracking System Shakes Up Recruiting Software Market

I asked Jerome Ternynck, MrTed’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, we did. The company was started in 1999 to provide an ASP solution, yet our Applicant Tracking Software (ATS) has always been sold on a subscription-based model for our customers.  After the launch of MrTed, we faced some interesting market developments and survived. We learned a lot from the dot-com crash in 2001 and we realized that that being a pure subscription business, or what is now being called Software-as-a-Service, is important for our company’s long term stability and growth. 

Being a pure SaaS company during a recession provides more visibility into our future revenue streams and eliminates the up’s and downs we see traditional ATS competitors experiencing. We are now more than 20 quarters profitable and have strong recurring revenue; we are able to maintain our investments in our product roadmap.

Why do your customers buy from MrTed?

For the last ten years MrTed has been servicing the talent acquisition needs of large, complex, global organizations.  Our customers are one of the largest companies in the world and we also provide the technology infrastructure for some of the largest Recruitment Process Outsourcers (RPO’s), who also service these types of complex, multi-national companies. 

At MrTed, we understand global recruiting. With over 9 years experience we are able to capitalize our knowledge into our products and service delivery. Our enterprise product, MrTedTalentLink™, is a proven solution that is functionally rich but can be set up very quickly, which is attractive for our customers.  We support the local regulations and languages of all countries in Europe and most of Asia and North America.  Because of this, our clients don’t need to work with local software providers in country where they have a presence. All they have to do is work with us and we have them covered, one single solution for one global workforce. As recruiting in Germany is still not the same as recruiting in China, an enterprise needs to be flexible in its requirements. MrTedTalentLink™ is able to fulfill all the local requirements, but meanwhile maintaining the consistency on the highest level of the company. Because of our user-friendly configuration capabilities of MrTedTalentLink™ a company is able to set its own requirements and configure MrTedTalentLink™ on its own.

Our latest offering, SmartRecruiters – which is still in beta – is designed specifically for small business recruiters and hiring managers who, until now, have been forced to use expensive enterprise systems that are complicated and difficult to implement.  By contrast, SmartRecruiters is easy to use, deploys in just a few minutes, and is 100% free. Integrated with the SmartRecruiters ATS is a set of pay-per-use services and vibrant and supported by a growing user community. After only 90 days, we have over 350 SMB clients who have signed up for SmartRecruiters! This Open SaaS product was designed to be free and easy to use, which is what SMB’s are looking for. We started our mission with the believe that SmartRecruiters can change the Recruiting Software industry and that SmartRecruiters has become the fastest-growing ATS in only three months is testament to the great need in the market for something new.  We will continue to improve the application through input from the community and the addition of new services, and we are optimistic that SmartRecruiters will be the number one ATS in the industry by the end of the year.”

What do you see as the key trends emerging in the SaaS industry?

The urgency for enterprises to have one global platform and be able to adopt the local requirements, while maintaining the global consistency. If you don’t provide a single hosted and one code base solution to your customers, this will be difficult times for you.

With the launch of our SmartRecruiters Open SaaS offering for SMB’s we believe that free software is the wave of the future, especially when it comes to the SMB market.  For many mature software categories, sales penetration into smaller organizations is costly and difficult. By adopting some of the business approaches of firms like Google, Yahoo!, Linkedin and Skype, if you can aggregate a large user community, there are many ways of monetizing the customer base without having to sell software.  

Our approach to the ATS market is to use an Open SaaS approach, which is a mash-up of both Open Source and SaaS principals.  Offer the software for free, its hosted and maintained but provide pay-per-use services and wrap it with a strong user community. We think that this trend has the potential to change the SaaS industry.

What is your outlook for 2009?

We continue to grow and see opportunities in the market on both enterprises as well for the SMB businesses.

In the enterprise market, it’s time to take control and grow from one global platform and get rid of the numerous local solutions. Customers want to consolidate on numerous local solutions into a single global solution, covering and managing their global workforce. We are ideally positioned for this 2^nd buyers market. A couple of years ago this buyers group were the early adaptors of the first ATS wave, but now they understand the urgency of the current market to improve their processes, create a global workforce and be ready for the new phase of growth after the recession.

Introducing ATS technology for free to the SMB market turns the SmartRecruiters proposition into a gateway to the estimated $40 Billion staffing services spend by SMB’s in the US alone. Free ATS technology levels the playing field in the War for Talent and ensures that corporate recruiters and hiring managers in smaller businesses can be more competitive.

Although we will need to manage our business very carefully during this recessionary period, we also have new products and markets that we are now attacking, so we see continued growth potential. Unfortunately, we don’t control the current state of market or economy, but for our SmartRecruiters Open SaaS offering – which is Free & Easy –  our timing couldn’t be better to launch a free recruiting tool and turn an industry upside down.

 Thank you to Jerome Ternynck, Matthijs van Etten and Ralph Brasker for contributing to this profile.