The Year Of SaaS Shows… And Yes, In This Economy.
The recession continued to take its toll on software sales with a slight impact to the SaaS vendors. Growth rates have come down from the high 30’s to the low 20’s. But with “flat” the new growth metric in this down economy, results remain impressive. Traditional on-premise vendors see some light at the end of the tunnel. License revenues have started to stabilize on a year-over-year basis. Major events in the 2009
Calendar Year (CY) Q4 include:
- In YoY quarterly revenue growth, RightNow (56.96%) led the pack followed by Taleo (23.29%), SalesForce (22.26%), and Blackboard (17.66%) (see Figure 1).
- Salesforce.com achieves $1.4B in revenues for CY 2009. As the biggest SaaS vendor in the market, Salesforce.com is bigger than Microsoft Dynamics, Lawson, and Unit 4 (Agresso). To put this in perspective, Salesforce.com’s revenue alone is at the size of all the other public SaaS vendors listed in the Software Insider Index.
- Most on-premise vendors stabilized declines in new license revenue (see Figure 2). Keep in mind that on-premise vendors have remained profitable in this downturn. Maintenance continues to provide a cash cushion for most on-premise vendors.
- License revenues versus maintenance revenues for some vendors such as Deltek, Epicor, Exact, JDA Software, Lawson Software, Manhattan Associates, and Oracle reach or exceed 1:2 ratios. The result – lagging growth in acquiring new customers on latest releases.
- IFS leads with a (21.38%) gain on YoY license revenue with Manhattan (3.21%), Epicor (2.32%), and Oracle (1.92%) following with positive license revenue for calendar year Q4
Figure 1. Most SaaS Vendors Continue Break Neck Growth
Figure 2. Many On Premise Vendors Rely On Maintenance To Bolster Sagging License Revenues
The Bottom Line – Clients Now Expect On-Premise Vendors To Have A “SaaS” Option
As we tally up the winners and losers for 2009, SaaS vendors have shown to the industry what’s required for success in today’s tough economic condition. The secret to their success transcends subscription pricing…
(Read the full article @ A Software Insider's Point of View)
[...] see around SaaS/cloud computing present very few hard facts upon which you can make a decision. Simply pointing to how fast it is growing won’t convince anyone other than a lemming that moving to SaaS is a great idea. Neither will [...]
[...] see around SaaS/cloud computing present very few hard facts upon which you can make a decision. Simply pointing to how fast it is growing won’t convince anyone other than a lemming that moving to SaaS is a great idea. Neither will [...]