Software Pulse

Business Strategy for Software Executives

September 26, 2005

Deven Parekh and Peter Sobiloff

New VC Rules for On-Demand Software

Expansion round specialists, Insight Venture Partners, provide their list of must-haves for investing in on-demand software companies.

By Deven Parekh and Peter Sobiloff,
Insight Venture Partners

On-demand is the big game in software today.

We’re bullish about the prospects for recurring-revenue software solutions. Whether you call them application service providers (ASPs,) on-demand vendors, or even a subset of software-as-a-service (SaaS) companies, the opportunity is the same: a growing company with streamlined operations that provides a hosted, pay-as-you-go software solution which earns them a steady revenue stream, as well as a satisfied enterprise client base.

But not every software vendor can play successfully in this emerging field. We use a new set of criteria we use to analyze on-demand software vendors as VC investment opportunities.


New Report on Software’s "New Opportunities"

The executive report from the Enterprise 2005 conference is now available at the conference site. Authored in partnership with McKinsey & Company, the document presents insight from speakers and surveys on the conference theme, "New Opportunities." For more in-depth analysis of e2005 conference proceedings, read the Blog with posts from a variety of conference-goers.

Do Megamergers Still Make Sense?

As the software industry consolidates, Steve W. Martin asks whether the merger of high-tech giants provides value to the companies involved. In this week’s post to the Blog on M&A, Martin says megamergers fall into one of three categories — destroyers, losers and winners. And don’t miss last week’s analysis from MR Rangaswami, Mike Nevens, Bryan Stolle and Vinnie Mirchandani on the industry impact of the Oracle-Siebel deal.

Win New Markets and Please Investors

Profits come from new markets. But approaching a new market can be disruptive to current operations. Nilofer Merchant of Rubicon Consulting addresses how to profit from value innovation in this week’s post to the Blog on New Era, New Thinking.

The Secret Sauce of Open Source

Tony Baer speculates on the potential viability of Enterprise Services Buses open source projects in this week’s post to the Blog on open source.

Share your insight on the software business. Email with your submissions to the Blog.

Poll: Microsoft’s Google-y Nightmare

News reports speculate that Microsoft’s longstanding fear of losing its Windows monopoly now has a name: Google. Could the Internet upstart ever overtake Microsoft with a Web-based application platform?
Take our Pulse Poll >>

Last week, visitors gave their opinions on whether Oracle could ever be able to truly integrate its acquired product offerings.
Give your opinion and see the perspective of visitors >>

More at

Forrester predicts 2006 IT spending to grow 4.3%.
Read the most important enterprise software industry news of the week >>

Rearden Commerce gets $25 million.
Monitor the latest software venture capital deals >>

HP buys Peregrine Systems and AppIQ.
Size up last week's software M&A deals >>

Andrew Lark named CMO of LogLogic.
See who’s made it to the top in our list of recent software executive appointments >>

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Parting Thought

"Everything that irritates us about others can lead us to an understanding of ourselves."
- Carl Jung

Courtesy of Malcolm Kusher, The Kushner Group