It’s been a great week for SaaS (software-as-a-service) players. On Monday 6/8, SuccessFactors, announced a whopping 420,000 seat deal with Siemens, beating out Siemens long time strategic partner SAP. Then just this Friday Netsuite CEO Zach Nelson mentioned at an analyst dinner that a 9000 seat deal with an as yet unnamed UK company; in addition to deals with Siemens (again) and Software AG.
Both SuccessFactors ($125M in revenue), provider of Performance & Talent Management solutions and NetSuite ($160M in revenue), who provides integrated business management software for midsize businesses, are dwarfed by the pioneer of SaaS computing salesforce.com (over $1B+ in revenue). However their successes reflect continuing momentum, complementing salesforce.com’s 1Q results announced in May in which they announced that net customers increased 3,900 in the Quarter to 59,300 and that they had exceeded $1.2B in annual revenue run rate.
Back in January, IDC published a forecast predicting that SaaS would expand rather than contract as a result of the economic crisis with a bold statement that “by the end of 2009, 76% of U.S. organizations will use at least one SaaS-delivered application for business use.” Indeed as the economy continues to be challenging, CIOs are taking steps to delay or even cancel big internal IT projects. SaaS offerings, previously mentioned and others, provide CIOs with predictable monthly costs and on-time deployments. Another reason CIOs are picking SaaS over enterprise software is the simplicity, with no installation and browser access, SaaS systems are available immediately vs. the long implementation times required by “traditional” on-premise software.
This week’s news from SuccessFactors and Netsuite is encouraging for SaaS and cloud computing supporters who are also seeing groundswell of interest in technologies such as Hadoop and MapReduce running on infrastructure-as-a-service (IaaS) from Amazon and platform-as-a-service (PaaS) environments from salesforce.com and Google App Engine. I’ll admit I’ve become a bit of a “SaaSparilla” lately, because I am so sweet on SaaS :-). My recent poke fun SaaS vs. Enterprise postings aside (SaaS Toasters and Day 983 of my sales cycle), I am firmly in the XaaS and cloud computing camp, hence this new line of posts on SaaS that I’m calling the SaaSparilla Reports. Having spent my entire career in enterprise software, I have good reason to rejoice.