March 6th, 2010 § 14 Comments
I have to admit to harboring an extreme prejudice.
It rears its ugly head when a start up CEO comes into our office to take us through their business, introduces the management team and describes one of the executives as the “VP Sales & Marketing”. » Read the rest of this entry «
February 21st, 2010 § 3 Comments
When I first took over the Siebel CRM OnDemand division in 2004, I realized very quickly there were a lot of differences – some subtle, some not so subtle – that separated a SaaS business from a software business.
At the time, many of the metrics that those who currently run or invest in SaaS businesses now take for granted were then relatively new concepts and not necessarily a part of a traditional software business - Annual/Total Contract Value, Monthly Recurring Revenue, Cost of Customer Acquistion Ratio, LTV Customer, etc. » 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.
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.
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.