January 16th, 2010 § 1 Comment
On Wednesday, January 13th, 2010 HP and Microsoft made a joint announcement covered in this BusinessWeek article stating that both companies “will spend $250 million over three years to combine some research and development efforts and deliver prepackaged servers, storage, software, and networking gear. According to Steve Ballmer, “cloud computing is the driving force” behind the initiative. » Read the rest of this entry «
November 22nd, 2009 § 3 Comments
Recently, I’ve had a few conversations with people regarding my version of the Customer Acquisition Cost (CAC) ratio. As a reminder, my version of the CAC ratio is: [($Total Sales + $Total Marketing)/$First Year Contract Value]. The objective is to make the CAC ratio less than 1 which implies a customer acquisition payback of a year or less. This is the ratio I recommend companies use to measure their sales/marketing effectiveness. I discussed this a year or so ago in this blog in a post titled “The Capital Needed to Create a SaaS Company”.
October 11th, 2009 § 4 Comments
In March of this year, I posted a blog titled “Process Work v. Knowledge Work – The Emergence of Performance Management“.
At the end of that blog post, I committed to commenting in much more detail on the topic of Performance Management and the role of predictive analytics in a future blog. » Read the rest of this entry «
October 9th, 2009 § 2 Comments
I attended the Health 2.0 Conference in San Francisco earlier this week and, coincidentally, I also met with Piper Jaffray later in the week to discuss Healthcare IT (HCIT); they have put together a nice body of research on the market. » Read the rest of this entry «
September 11th, 2009 § 6 Comments
I recently came across a guest post from Savinay Berry on PrivateEquityCentral.net. Savinay is a vice president with Granite Ventures and the article is an overview of the Cloud Computing market. I thought it was a very good article that helps explain what is driving the growth of this market and he also renders his opinion regarding investment opportunities (for entrepreneurs this translates into ‘business opportunities’) that this new form of computing may provide.
» Read the rest of this entry «
August 24th, 2009 § 1 Comment
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). » Read the rest of this entry «
August 5th, 2009 § 5 Comments
I recently caught up with Cary Platkin. Cary is an attorney and more specifically was the in house attorney assigned to the CRM On Demand & SMB divisions I ran at Siebel Systems. Cary was instrumental in developing Siebel’s CRM On Demand Service Level Agreement (SLA) and helping me and my organization negotiate many Siebel CRM On Demand contracts.
I really enjoyed working with Cary because he acted as a member of my management team; he first focused on the business objectives I wanted to accomplish and then applied law to help me accomplish those objectives. He also helped me negotiate through a minefield of sticky issues like Vendor Specific Objective Evidence (VSOE) for revenue recognition and managing SLA issues.
Cary now has his own legal practice, Platkin Law, and one of his specialities is helping SaaS startups. I asked Cary if he wouldn’t mind addressing a number of common legal issues that SaaS companies are faced with and he was kind enough to oblige.
» Read the rest of this entry «
July 21st, 2009 § 1 Comment
Recently, I was interviewed by ReadWriteWeb about investing in enterprise applications. The following is a link to that interview.
June 22nd, 2009 § 3 Comments
The following article was published in the WSJ today. I think it captures perfectly the issues we’ve been discussing on this blog.
Tech Giants Ramp Up Their Online Offerings
(From THE WALL STREET JOURNAL)
By Ben Worthen and Justin Scheck
The recession is forcing technology heavyweights Oracle Corp., Hewlett-Packard Co., and SAP AG deeper into a low-profit business that the companies have traditionally resisted: selling online software. As businesses look to cut costs many are turning to Web-based software, which saves companies from having to buy or maintain expensive back-office computers.
» Read the rest of this entry «
June 11th, 2009 § 5 Comments
One of the key issues that concerns investors and management teams alike vis a vis the SaaS business model is its potential to consume a large amount of capital until finally reaching profitability. Many people have written about this topic, including me.
SaaS companies are typically built upon a stream of relatively low cost subscription licenses, paid out monthly/quarterly/annually — even multi-annually. Unfortunately, for the vendor, the subscription model usually generates far less up front cash than a traditional ‘perpetual license’ software model. But, over time, the compounding effect of the SaaS model can build into a nice annuitystream — provided churn rates are minimized.
It is this up front cash differential that is the primary appeal of the SaaS model over the traditional software model with customers. However, this differential is also what makes the model vexing for the SaaS management team and the investors.
» Read the rest of this entry «
Connect with Bruce on Facebook
Subscribe to Bruce's SaaS Blog
Follow @brucevc on Twitter
