Located: Pasadena, California
Market: Social Technology Platform
Key Customers: Humane Society of the US, CBS, US Department of Health and Human Services, Avid Technology, Omniture, Gymboree, InterContinental Hotels and University of Wisconsin-Madison.
Blog: CentralDesktop Blog
I asked Isaac Garcia, CentralDesktop’s co-founder and 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, we were very deliberate from the very beginning that we wanted to be a subscription-based product with an architecture based on a single-code base. We were focused on becoming the Salesforce.com of the Collaboration industry. Just how Salesforce was the disruptive force in the highly fragmented CRM market, we wanted to do the same thing for the Collaboration market.
Back in 1999 we founded Upgradebase, which was a large database of information targeted to high-end enterprises but the product was not multi-tenant. We also operated Vendorbase, which was written on a single-code base, and customers paid a monthly subscription fee for usage.
When market tanked in 2002, our enterprise business suffered but Vendorbase did well, because it was affordable, low touch and had a multi-tenant architecture. We kept telling ourselves to avoid the allure of the enterprise software market and stick to the subscription model and that was the right thing to do.
Why do your customers buy from Central Desktop?
Three reasons why people buy our product. First, we offer a lot of tools under a single umbrella including document, collaboration and project management. Just subscribe once and your company gets all these tools.
Second, our delivery mechanism is designed for small and medium sized businesses and can be deployed very quickly. Over the next few years, the SaaS delivery model in our market will need to get faster and easier to use versus some of the more enterprise-focused tools like Jive or Telligent.
The last reason is that since we’re a SaaS company, we really understand and deliver a true SaaS solution. We have SaaS DNA. Our customers expect an easy to use, dependable, affordable solution and we need to win their business every single day. So we spend a lot of our time focusing on providing very good customer service, which is a big difference as compared to a software firm that operates under a traditional on-premise model.
Our customer is typically a SMB with less than 100 employees and the buyer is usually the owner or CEO of the company. These buyers are not only the decision-maker but usually the CentralDesktop administrator too, so our products need to be easy to use.
Sometimes our customers compare CentralDesktop to free or very simple alternatives that are available in the market like Zoho or even 37Signals’ BaseCamp product. Some of these offerings offer good self-service support but no live customer support or professional services. Other products have pieces of the collaborative environment our customers are looking for but don’t offer the breadth of CentralDesktop. This is the opposite problem when customers look at more complex solutions that offer deep functionality, but for our SMB customer, these type of products are too confusing, which makes them hard to use.
What do you see as the key trend emerging in the SaaS industry?
I am seeing many new pricing models emerging, like charging for utilization and usage, instead of by annual commitments for seat counts. Start-up companies are experimenting with charging for bandwidth, storage, uploads and other models. These newer pricing structures are all based on some variation of utility computing, similar to what Amazon.com’s AWS is doing. The original pricing for Salesforce.com was designed to position them more as a utility but over time they shifted back to more of a traditional seat-based pricing model.
We are also seeing more flexibility around contracts. In the future, customers are going to be looking for not only annual pricing around seat counts but also utility-based concepts that will move monthly subscription fees up or down based on utilization, which the industry will need to be ready to accommodate.
What is your outlook for 2010?
CentralDesktop grew by 50% last year and we are predicting 80-100% growth for 2010, as the economy recovers.
Customers are being more aggressive about buying software products, before the job market has really started to improve, which is a little worrisome. I am still being cautiously optimistic but I feel that the overall the market has a false sense of confidence. Even with this type of market, I know that CentralDesktop will continue to be successful.