Commentary

Bob Evans
Senior VP, Global CIO  

SuccessFactors Revenue Nears $200M As SaaS Grows Up

While Salesforce.com's the unquestioned SaaS revenue leader, Taleo, RightNow, NetSuite and SuccessFactors are all closing in on annual run rates of $200 million. With SuccessFactors this week reporting 27% quarterly revenue growth to $46.8 million, these and other high-growth SaaS vendors have proven they've got industrial-strength enterprise chops.

While Salesforce.com's the unquestioned SaaS revenue leader, Taleo, RightNow, NetSuite and SuccessFactors are all closing in on annual run rates of $200 million. With SuccessFactors this week reporting 27% quarterly revenue growth to $46.8 million, these and other high-growth SaaS vendors have proven they've got industrial-strength enterprise chops.For SuccessFactors-the creator of the "business-execution software" category that promises to help companies interlace strategy and execution-that nice jump in revenue was paired with a 35% increase in billings, all of which caused the company to raise its guidance for the full year to somewhere between $198 million and $200 million.

From the company's earnings press release:


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"The growth is fuelled by bigger purchases, and more users from both new and existing customers, in all of the market segments: Enterprise, Medium, Small, and all geographies," said Lars Dalgaard, founder and CEO for SuccessFactors.

"Q2 had more than 50% of new sales coming from existing customers. With customers' proven interest in buying more of our secure, scalable, easy-to-use platform, we continue to expand it."

SuccessFactors also agreed during the second quarter to acquire CubeTree Inc., whose social-software technologies will be integrated to make SuccessFactors' applications more engaging and interactive, the company said.

In the company's earnings statement, the effusive Dalgaard summarized the company's prospects for continued growth by pointing to its enhanced and expanded set of products, their ability to be deployed rapidly, and their appeal to a wide range of businesses around the world. Said Dalgaard:

"In the first half of 2010, SuccessFactors has launched new-to-market products and acquired unique strategic teams and products that, combined with our existing applications, offer the global market a productivity suite of cloud business execution applications, never seen before, that can take only weeks to deploy. We believe we have an unmatched offering targeting a very large greenfield market."

In approaching the $200M mark in annual revenue, SuccessFactors has some company in the forms of Taleo, NetSuite, and RightNow:

Taleo: For the quarter ended March 31, revenue of $55 million, up 14.5%.

NetSuite: For the quarter ended March 31, revenue of $43.9 million.

RightNow: For the quarter ended March 31, revenue of $42.1 million, up 17%.

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