Software Pulse

Business Strategy for Software Executives

October 21, 2009

Joel York

Winning at SaaS: Only the Bold Survive

SaaS vendors that follow in the footsteps of their enterprise software predecessors are doomed to failure. Winning SaaS strategies boldly leverage the Internet to create unassailable competitive advantage.

By Joel York, Xignite

Software-as-a-Service is moving from the cutting edge to the mainstream, but there is enormous disparity in the performance of SaaS businesses - from rapidly growing startups to embarrassingly unprofitable public companies - and only a handful of true success stories like and Taleo where growth, profitability and ROI have gone hand-in-hand.

SaaS is pretty much on the far side of the hype cycle, but the future is anything but clear. Zealots would have us believe that on-premise enterprise software will be as extinct as the dinosaurs in ten years, while detractors call it a fad and point to the minuscule market share of SaaS in the enterprise. Still, others espouse the wisdom of so-called hybrid delivery models. Is there a method to this madness?

My feeling is yes. I believe investors and entrepreneurs that focus objectively on business and technology fundamentals will make better investment decisions, create wildly successful SaaS businesses, and avoid misguided and unprofitable SaaS experiments. The key is understanding how SaaS creates real economic value over on-premise software and leveraging that distinction in to a competitive advantage.


Software Executives: Maximize the Cloud Opportunity

It's not too late for software companies to morph their cloud initiatives into a winning business. Join Sand Hill Group and Cognizant invite you to a special Executive Breakfast Briefing and panel discussion, “Leveraging the Cloud – A Multi Dimensional View”. The event will take place on Nov 12, 2009 from 7:45 - 10:00am PST at the Sofitel, San Francisco Bay.

Learn secrets from real-world Business, IT and Product Engineering experts whose cloud strategies are thriving today in a panel discussion moderated by publisher, MR Rangaswami and featuring Malcolm Frank of Cognizant Technology Solutions, Preeti Somal of VMware and Tony Young of Informatica. Attendance is limited to VP-level and senior executives. Email to find out more information and to RSVP.

BreakingPoint Shakes Up the Tools Market

Britton Manasco of Manasco Marketing Partners presents this case study of BreakingPoint’s successful entry into a market dominated by large, established players in this post to his Blog, From the Front.

Let the Big Guys Drive

Jon B. Fisher demonstrates how a niche startup can tailor itself for acquisition by a major vendor in this post to his Blog, Strategic Entrepreneurism.


Cloud Computing – An Investor’s Perspective

Savinay Berry of Granite Ventures examines the opportunities presented in the cloud for customers, vendors and investors in this post to the Blog on cloud computing.


Publish Your Perspective! wants your opinions. Send your thoughts on the enterprise software industry to editor, Maryann Jones Thompson ( and have your opinions published on our site.

DON'T MISS: McKinsey's Interview with John Chambers of Cisco

The CEO and chairman of Cisco Systems explores approaches to decentralized management and leadership and also offers perspective on the future of Web technology and the opportunity that an economic downturn provides for strategically minded companies in this article from The McKinsey Quarterly.

The Week in Review: "Make Our Day"

Ellison spends OpenWorld calling out IBM; plus, Oracle changes its partner program, Google grows profits, and Benioff plays nice. Read these stories and more software news of the week in the latest Software News Summary.

Poll: Biggest SaaS Mistake?

What is the biggest mistake SaaS vendors’ can make?
Take our Pulse Poll >>

Last week, readers voted on the importance of MDM to realizing software value.
Give us your opinion and see the results >>

More at

Gartner predicts IT spending rebound in 2010.
Read the most important enterprise software industry news of the week >>

Overtone receives $2.5 million.
Monitor the latest software venture capital deals >>

BMC Software buys Tideway.
Size up last week’s software M&A deals >>

Mike Metscher named CEO of Future Point Systems.
See who’s made it to the top in our list of recent software executive appointments.

Send us your feedback on this newsletter and the site.

Parting Thought

“Anything unattempted remains impossible.”
— Unknown

Courtesy of Malcolm Kusher, The Kushner Group



Ness Software Product LabsSM delivers the next generation of the managed software development lab – R&D and software product development outsourcing and consulting that extends software product capacity and drives innovation. Ness operates over 50 labs for ISVs and other product-oriented clients, utilizing delivery centers across India and Eastern Europe. These centers are designed to provide software ISVs and enterprise organizations who rely on proprietary software to generate their revenues with a complete extension of their internal R&D software development team.
Find out more.


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click here. is published by Sand Hill Group, which provides investment and management advice to emerging leaders in the $600 billion enterprise software, services and solutions market. Sand Hill Group produces the Software and the Enterprise series of conferences for industry executives, and authors research reports on cutting-edge technology topics.