benchmarking saas financials and ratios
DESCRIPTION
Presentation for World Financial Symposiums, London April 16th 2013: Benchmarking the Cloud, look at SaaS financials and Saas Market statistics. Which countries move to the cloud fastest, which segments, how much do saas companies spend on Sales & Marketing and how much do they growTRANSCRIPT
The software industry database
SaaS financials and Market statistics
Rene van Erk,CEO & Founder ISVWorld,
Benchmarking the Cloud
Presentation for World Financial Symposiums, London April 16th 2013WFS: Educating Technology leaders and investors
Agenda
page 2
• Short intro on ISVWorld, the source of the data in this presentation
Live demo/discussion on some marketdata:
• Market statistics to compare cloud maturity:• Segments: Which software segments and industries move to the cloud the quickest,
which ones are less active?• Regions: How do UK and/or Western Europe cloud companies rank against US and/or
global
• Financial benchmarks Cloud versus traditional ISVs a/o:• Performance: Productivity, growth and profitability in SAAS compared to traditional
ISVs? Impact of Sales & Marketing spend on growth?• Perspective: A sample financial benchmark of Netsuite against ERP software overall,
against global SAAS averages and against SAP and the overall software industry• Extremes: Or look at the Saas HR segment to find relationships between value,
growth and profitability
• Wrap up
About ISVWorld, a “Big Data / Data-as-a-Service” company
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• Largest Global software industry database, covering over 100K software companies from over 75 countries
• Automated data collection and – classification processes (semi-) public information from 100- 500 sources per ISV
• Data is searchable on many criteria, for example:• Application type, Industry, Technology• Size, Location (Sales/HQ)• SAAS/Cloud and other “ Ecosystems”
• Customers today:• Origination, Roll-ups: Corporate M&A, VC, Private Equity • Marketing & lead campaigns: Cloud providers, outsourcers • Market research: ISVs, analysts, Corporate Finance• Build vs. Buy, IT-Strategy: CIO’s, IT Architects, IT-consultants
Quotes:
• “ISVWorld is almost never the end, but always the start”
(Large IT analyst firm)
• “While we still regret you do not do email-addresses, your market insights and intelligence are unique”
(Top 10 Global ISV)
• Remember:• all our data are computer-
generated not edited or curated• ISVWorld is a market research
and market intelligence tool• Our objective is to cover all
companies with software products
(ISVWorld :-)
Market statistics
page 4
Live Session 1: Comparing the cloud:
Starting Points:• 17.7% of ISVs globally had 1 or more cloud based
products in 2012• 48% of ISVs globally use 1 or more Microsoft
technologies, 12.9% use Oracle.
Questions to answer:• Cloud by region: How do UK and/or Western Europe
cloud companies rank against US and/or global • Cloud by ecosystem: Are Microsoft partners or Oracle
partners moving to the cloud faster than average?• Cloud by segment: Which software segments and
industries move to the cloud the quickest, which ones are less active?
ISVWorld - largest Software Industry database ...globally.
Regional differences: % of vendors with cloud products
page 5
17.7% of ISVs globally have cloud based products, but what about US?
ISVWorld - largest Software Industry database ...globally.
Regional differences: % of vendors with cloud products
page 6
United States: 25%
17.7% of ISVs globally have cloud based products, but what about US, UK?
ISVWorld - largest Software Industry database ...globally.
Regional differences: % of vendors with cloud products
page 7
United States: 25% United Kingdom: 20.6%
17.7% of ISVs globally have cloud based products, but what about US, UK, Netherlands?
ISVWorld - largest Software Industry database ...globally.
Regional differences: % of vendors with cloud products
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United States: 25% United Kingdom: 20.6% Netherlands: 16.8%
17.7% of ISVs globally have cloud based products, but what about US, UK, Netherlands and Germany?
ISVWorld - largest Software Industry database ...globally.
Regional differences: % of vendors with cloud products
page 9
United States: 25% United Kingdom: 20.6% Netherlands: 16.8% Germany: 10.5%
17.7% of ISVs globally have cloud based products, but what about US, UK, Netherlands and Germany?
ISVWorld - largest Software Industry database ...globally.
Regional differences (2): % of vendors with cloud products in CRM
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However, taking a leading segment such as CRM (or HR) paints a different picture:
Germany: 34.2%
ISVWorld - largest Software Industry database ...globally.
Regional differences (2): % of vendors with cloud products in CRM
page 11
However, taking a leading segment such as CRM (or HR) paints a different picture:
Netherlands: 35.2% Germany: 34.2%
ISVWorld - largest Software Industry database ...globally.
Regional differences (2): % of vendors with cloud products in CRM
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However, taking a leading segment such as CRM (or HR) paints a different picture:
United Kingdom: 37.9% Netherlands: 35.2% Germany: 34.2%
ISVWorld - largest Software Industry database ...globally.
Regional differences (2): % of vendors with cloud products in CRM
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However, taking a leading segment such as CRM (or HR) paints a different picture:
United States: 48.4% United Kingdom: 37.9% Netherlands: 35.2% Germany: 34.2%
ISVWorld - largest Software Industry database ...globally.
The Battle for the Cloud by Ecosystem
page 14
Which graph is Microsoft and which is Oracle?
Oracle: 41.2% Microsoft: 28.3% ? ?
ISVWorld - largest Software Industry database ...globally.
The Battle for the Cloud by Ecosystem
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Which graph is Microsoft and which is Oracle?
Oracle: 41.2% Microsoft: 28.3%
Financial benchmarks
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Live Session 2: Cloud versus traditional ISVs
Starting Points:• Revenue multiples stand at 3.5 for all ISVs on
average, but 6.75 for SaaS pure plays (public)• Does a 20%+ growth justify this?
Question to answer: what drives that difference?• Performance? How does Productivity, growth and
profitability in SAAS compared to traditional ISVs? Impact of Sales & Marketing spend on growth?
• Perspective: Does a sample financial benchmark of Netsuite against ERP software overall, against global SAAS averages and against SAP and the overall software industry tell us something
• Extremes: Does the Saas HR segment help us find relationships between value, growth and profitability
Note: we will run most of the analysis live on the our database, hence not all data are in this deck
ISVWorld - largest Software Industry database ...globally.
Sales and Marketing spend versus Growth vs profit
page 17
Easy question: which color is SaaS?
ISVWorld - largest Software Industry database ...globally.
Sales and Marketing spend versus Growth vs profit
page 18
Easy question: which color is SaaS?
ISVWorld - largest Software Industry database ...globally.
Netsuite versus SAP (and ERP sub-segment and ISVs overall)
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Question: which color represents which segment/company?
ISVWorld - largest Software Industry database ...globally.
Netsuite versus SAP (and ERP sub-segment and ISVs overall)
page 20
ISVWorld - largest Software Industry database ...globally.
But is Netsuite representative for SaaS overall?
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No, also Netsuite can be put into perspective .. Take Workday and Cornerstone on Demand
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Questions?
ISVWorld: No one covers software like we do
www.ISVWorld.com
kb.isvworld.com
page 23
Appendix 2: Background on ISVWorld
3 Core features :
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1. Search & Find 3. Market Statistics
2. Financial Benchmarks
Our product today is used for ..
page 25
Market research• Map competition; find new partners, resellers, acquisition targets or emerging
competitors. Identify ISV’s by segment, geography, size or product type. Other Market intelligence needs, graphics on size and demographics of any market (sub-) segment
• For: Market researchers, ISV’s, analysts
Investment decisions • Identify potential buyers and sellers, both usual and unusual suspects. Define
investment strategy using ISVWorld data for any consolidation or roll-up, portfolio-play, market-play, bolt-on acquisitions etcetera.
• For: Venture Capital, Private Equity, Corporate Finance, Corporate Development professionals
Build versus Buy decisions• Identify & compare all off-the-shelf solutions before committing to a custom
development project• For: CTO’s, CIO’s, System Integrators, IT-consultants, IT-architects
Find & track Innovation • Present more innovative solutions to customers: understanding technology
innovation in your domain improves the quality of any engagement.• For: Management Consultants, IT-consultants, CIO’s, IT-architects
?
..but also in Marketing: ISVWorld finds pre-qualified leads for you.
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The pre-qualified lead concept• no more mailshots to 20.000 potential leads • no more 1:1 cold calls by expensive sales reps. • Identify targeted leads that meet criteria you define,
so you can run highly focused and efficient campaigns
Cost/lead
# unqualified leads
Sales-Cold calling
Marketing,Email Blast
high
high
ISVWorld-Pre-qualified leads
120,000 ISVs in ISVWorld means coverage in:
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For more information visit us at www.isvworld.com