Company: ServiceSource International
Located: San Francisco, California
Market: Service Revenue Management
Key Customers: Affymetrix, Blue Coat, CA Technologies, Isilon Systems and NEC
I asked Ganesh Bell, ServiceSource’s EVP of Products a few questions about his business and his latest product announcement.
Did you start out as a Software-as-a-Service company?
The company launched in 1999 and really started out offering both SaaS and a managed service solution for customers who wanted to improve their end-to-end service revenue management process. When we refer to service management we include hardware, software, and SaaS companies that want to maximize their recurring, maintenance and service revenues related to their products.
ServiceSource has a Cloud-based suite of offerings that are more performance management focused than a typical transaction type of application like billing or metering. Our service management platform consists of a data management engine, business intelligence and a set of applications and managed services designed business performance improvement.
We feel that this is an under-served market segment and that there are a lot of opportunities to improve a customer’s revenues just by managing the renewal and subscription process more efficiently. We estimate that there are approximately $150 to $160B worth of software and hardware renewals occurring on an annual basis and that there is at least $30B of additional revenue that is being left on the table.
As you may know already, ServiceSource just went public a few weeks ago on the NASDAQ and raised over $87M in proceeds. We also recently announced our first quarter results which included record revenues of $46.1M which was up over 40% from Q1 of last year.
Why do your customers buy from ServiceSource?
We offer a unique business model where we operate on a pay-for-performance basis with our customers where we only get paid when we can increase our customer’s service and maintenance revenues. Our partnerships with our customers need to be 100% self-funding, where the incremental revenue gains exceed our fees. On average, the return for our customers is around 15% and we are currently working with over 100 customers and have about $5B in service revenues under management. We offer a scalable Cloud application platform that manages over 700,000 transactions annually and have over 40,000 channel partners.
Another reason our customers use our service that many of them have also grown their businesses through acquisition and over time this has created a big problem for them because is really difficult to produce an accurate list of their customers and the all products that they own. ServiceSource uses a combination of our own applications, best-practices expertise that we have developed and our people to solve difficult problems like this one. Because once we have an accurate installed customer database it makes it much more efficient to manage renewals as well as provides for additional opportunities to deliver value to the our customers and generate incremental revenue for both of our firms.
Customers can also decide to just outsource their entire renewal processes to ServiceSource and we will take over their global renewal process. In this type of arrangement we can use a combination of direct and indirect teams to deliver value by managing renewals as well as cross-selling additional products.
Which new products are you launching?
We are launching a new end-to-end suite for service revenue performance management with our early customer and partner NetApp. Our suite contains these applications; Installed Base Management, Dynamic Quoting, eCommerce, Service Sales for renewals, Channel Sales which helps to facilitate sales team collaboration and performance management, and Analytics which provides visibility across the service revenue process using role-based dashboards.
Installed base management helps our customers to cleanse business data and provide integrity to their installed base system of record. The product also leverages the installed base system of record to provide support for customer success management activities and act as a way to extend channel capacity.
We believe benefits of this application are to help reduce our customer’s time from quote-to-close, improve the accuracy of installed base data, which should aid in upselling and cross selling. By having more accurate data it will also help customer services to be more effective and provide better service.
Dynamic Quoting is an extension to our Installed Base Management application. This product provide a quoting engine for service sales professionals, which is a new area for these groups who are still using Microsoft Excel to manage renewals and recurring revenue sales. We have built-in our own best practices into quoting functionality that is built into suite, which can quickly help to automate this process for the service professional.