Cloud // Software as a Service
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9/10/2009
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SuccessFactors Spins Business Execution Suite

New strategies by SuccessFactors and Taleo show how SaaS vendors plan to maintain strong growth.

SuccessFactors has been successful in its own little niche, as a provider of software-as-a-service for employee-performance management. But like other successful SaaS providers, the company has decided that the best path to continued strong growth is to expand beyond its niche. On Thursday, SuccessFactors reinvented itself as a provider of "business execution" software.

Part of this strategy includes new services that let customers combine SuccessFactors' performance-management offerings with their other data residing in onsite systems or other subscription software services.

One example would be for a retailer to make management changes at specific stores based on managerial candidates' performance information and individual store performance or data residing in business intelligence or enterprise-resource planning systems, said Paul Albright, the company's chief marketing officer.

SuccessFactors launched a partner program Thursday to work with other SaaS and software providers to make these integrations easier. Those on board include NetSuite, Google Apps, IBM Lotus Connections and WebSphere portal, and several companies specializing in SaaS integration products and services.

SuccessFactors has renamed its products the Business Execution suite, and one new service in that suite, SuccessFactors Strategy Deployment, is designed to let executives broadly communicate changes in company strategy, to support employee collaboration, and to let execs view both employee and operational performance metrics on dashboards, including data that's imported from other systems.

Salesforce.com is the most visible example of a SaaS company that decided continued strong growth could only come from moving beyond its specialty, as a provider of salesforce automation SaaS, to a provider of other types of SaaS. It's had moderate success with this strategy, started more than three years ago. In its most recent quarter, newer software services for call centers and self-service Web portals, and for developing and running custom applications on its Force.com cloud computing platform, represented more than 25% of new business wins, the company said.

Taleo, another SaaS provider that specializes in talent management, is also looking to expand beyond its roots. It announced Wednesday the launch of three online exchanges. The Knowledge Exchange is an online community for customers to share best practices and metrics on talent management.

The Solution Exchange is an online application marketplace from which partners can sell more types of software services that connect with Taleo, such as those focused on compliance and background checks; it is similar in philosophy to Salesforce.com's AppExchange online marketplace. The third site, Talent Exchange, is an online marketplace for connecting job candidates with hiring companies.

SuccessFactors forecasts its revenues at $147 million this year, up 32% from last year. The company's plan is to maintain that strong rate of growth by helping companies tie employee performance to the much bigger goal of business execution.


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