It's a mark of the remarkable rise of Salesforce.com that the company has become synonymous with the software-as-a-service category. The San Francisco-headquartered company has become -- like Hoover, the Bic Biro and the Breville sandwich toaster before it -- a brand that exceeds in public awareness the group that it heads. Salesforce is perhaps the the most significant business software startup of recent times but the way that others in its wake are ignored is perhaps more tribute to the company's gale-force PR and marketing than anything else.
NetSuite has a name in small-scale ERP, RightNow is well regarded in big-scale CRM, Google benefits from the halo-effect of its consumer mainstay buiness for desktop apps and then there are the companies like WebEx and ADP that have hoisted a flag of convenience by repositioning themselves as SaaS players. But generally, SaaS firms struggle to step out from the shadow cast by Salesforce so it might be worth drawing attention to a couple of outfits in the space that are building very interesting businesses.
I'll come to the second in another post but the first is SuccessFactors, a company that has made its name in what is sometimes (a bit lumpily, I think) referred to as employee performance management, where staff, managers and other interested parties can keep track of pay, set goals, measure who is achieving them and discover other information that can inform promotions, moves, hiring/firing/rewards and other people-centric business decisions.
Although SuccessFactors isn't a household company name, the firm has been public for almost two years and can boast a market cap close to $800m. This is a classic SaaS company in many ways, with very rapid revs of the core program/service and extensive use of consumer-like UI widgets and dahsbroards to make HR data look very different and far more reachable to the many. The company's latest manoeuvre, announced last week, is to label itself as a provider of "business execution software", which sounds on first take to be bull but is in fact well worth exploring.
As explained to me by chief marketing officer Paul Albright, SuccessFactors hit on the concept when it discovered that reps selling to C-level excutives were outperforming those selling to HR or other functions. That's because management is hungry for analytics that let them perform important tasks like succession planning, role rotation and so on but also seek the broader implications of having a strong workforce that knows what it is doing and where it is heading. By providing means of checking to see who (people, teams, regions or whatever) is executing against goals, Albright sees his company providing a scorecard for achieiving targets or a "BI for execution management" as he puts it, adding a layer of business alignment measurement (checking work being done is in tune with the strategy of the company) tools to the core capability of assessing "people performance".
Albright hopes the business execution category can be "as big as CRM". My hunch is that even if that target is a bit high, tools such as those provided by SuccessFactors have an ourtanding chance of moving to the front and centre of the executive view in much the same way that CRM did 10 years ago and business intelligence is doing now. Just think of how many excellent people you know that have left their employers because there seemed to be no just, statistically-backed way to measure their contributions, or consider the way that time is wasted because of conflicting views of work that is deemed important or unimportant.
Of course, if the managers building strategy, viewing the data and keeping the scores are rubbish, all the software services in the world won't help them but if they're bright people with no political agenda then they should eat up this stuff as a way to make fundamental changes to people and responsibilities and hence inform and advance the business as a whole.
Too often, companies don't make use of their primary asset -- people. Services like SuccessFactors offer a way to keep the good guys and move around staff to get the best out of them rather than letting them sink or swim in the same role year in, year out. It's a powerful story that, like many stories of SaaS firms, shouldn't be obscured by the success of Salesforce.