Global CIO: Surge Pushes SaaS Into Mainstream

With sustained revenue growth and growing acceptance among larger customers, the SaaS community--led by moved confidently out of the margins and into the mainstream.
*NetSuite grew nicely in its most-recent quarter, adding 270 new corporate licenses versus 240 in the same quarter a year ago, with revenue growing 10% for the three months to $40.3 million. Reuters said NetSuite also "managed to squeeze past Wall Street's earnings expectations on an adjusted basis as it signed on larger corporations as clients," and, calling NetSuite "one of the top players in the cloud-computing sector," noted that "three of the four most recent tech IPOs—OpenTable, SolarWinds, and LogMeIn—use the company's software." And, consistent with NetSuite CEO Zach Nelson's aggressive marketing, the company's new "Cash For Clunkers" promotion offers discounts to new customers and features existing customers making such claims as "thirtyfold" reduction in "enterprise IT expenditures" with NetSuite. Perhaps most telling, Credit Suisse analyst Bryan McGrath recently hiked his target price for NetSuite shares to $18 from $14, saying, "We have always maintained a positive outlook towards NetSuite’s long-term growth opportunity. We now think that the company has worked through most of these issues and that its operating metrics and year-over-year comparisons will begin to improve. With almost all of our near-term concerns addressed, we believe it is the time for investors to begin accumulating shares."

Well, as we all know, in this market each company and each idea has to go out each day and earn anew its credibility and deliver once more great value and innovation. The SaaS community, led by Salesforce, has hammered its way into the mainstream and by earning the trust and confidence of customers every day. We will see if the SaaS movement does indeed turn out to be "one of the largest-ever shifts in technology."

And what we are seeing now is only the beginning.

GlobalCIO Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

To find out more about Bob Evans, please visit his page.

For more Global CIO perspectives, check out Global CIO,
or write to Bob at [email protected].


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