SaaS Point Solutions Days are Numbered

I just finished reading a post on Sandhill.com titled “Best of Breed vs. Suite in the SaaS Era“, a Q&A session between Maryann Jones Thompson, editor of Sandhill.com and Sina Moatamed, CIO of BendPak/Ranger.

The general premise of the article is that SaaS point solutions or “best of breed” are going to eventually be replaced by suites – just as what happened with traditional enterprise software applications.

The SEC Comes Knocking

Next week, we are scheduled to meet with one of the SEC commissioners, Troy Paredes, and his Counsel, Scott Kimpel. They will be here in Silicon Valley to meet with a number of venture firms to get our perspectives on:

  • The investing environment / opportunities to sustain the growth and competitive advantage of the American economy
  • The exit environment
  • The capital raising environment for VCs
  • The positive and negative impacts of rules and regulations on the venture community and its portfolio companies

Forecasting the Winners in the Cloud Computing/SaaS Market

Trying to determine which companies will emerge to be the future leaders in the cloud computing market is still fairly difficult. A poll taken by Saugatech last year revealed that 51% of the respondents  “didn’t know or weren’t sure which company would be the next ‘master brand’”.

While at the application level, it’s easy to view Salesforce.com as the star of that sector, it gets a little murky as you move to other functional areas of the front and back office as well as down the overall cloud ‘stack’. As with most nascent markets,  the market is highly fragmented: CoLo/Managed Services (e.g. Rackspace, OpSource, many others),  Infrastructure/Platform (e.g. Amazon, Salesforce.com, VMWare, many others), Tools (e.g. Salesforce.com, Corent, Serena, SAP/Coghead, many others), and some a mixture of 2 or more areas (e.g. Salesforce.com).

Investing in Enterprise SaaS

Recently, I was interviewed by ReadWriteWeb about investing in enterprise applications. The following is a link to that interview.

Investing in Enterprise SaaS

Spin Ins – A Strategic Opportunity for Venture Capital and Large Software Companies?

In my last blog entry, I asserted there has been a dearth of start-ups in the enterprise software market for at least the last 5 years. According to VentureSource, from a high of 506 enterprise-oriented software start-ups securing a Seed or Series A round in 2000, only 201 new enterprise-oriented software start-ups were funded in 2008 and the vast majority of those used a SaaS, PaaS, or IaaS business model. Very few traditional model enterprise-oriented software companies were funded at all, the notable exception being in enterprise search and analytics.

As a result, large software companies whose innovation/growth strategy has relied upon a steady stream of start-up company candidates to acquire may be faced with a shortage in the not-so-distant future. Consequently, companies that have traditionally relied upon their strategic software providers to deliver innovative new solutions to enable them to further optimize back office and front office operations will suffer.