We use cookies and other similar technologies (Cookies) to enhance your experience and to provide you with relevant content and ads. By using our website, you are agreeing to the use of Cookies. You can change your settings at any time. Cookie Policy.

Untitled Document

With the world entering its second year of what promises to be a long recession, many ask what this means for Software as a Service (SaaS) companies. Much has been made of how the SaaS marketplace will benefit from a recession. SalesForce.com is actually bragging of hiring hundreds of people this quarter.

Yet, when I talk to most SaaS CEOs privately, I hear stories of delayed bookings and increased churn. It's not that the pipelines are shrinking; it's that people aren't making decisions. And while they aren't dropping their SaaS applications, they are cutting back. Who needs as many seats when you have laid off 20 percent of your staff?

Probably the easiest way to think about the SaaS marketplace is that even Toyota is selling fewer cars. They are doing better than the dinosaurs -- but when it's bad, it's bad for everyone.

So how do you not only survive but thrive in such a broad-reaching downturn? Look to the lessons of the past downturn, and you'll find something consistent about the companies that came through strongly. Companies that did well in the early 2000s, such as SalesForce and Equinix, remembered three things:

  • Stick to your knitting
  • Find new markets
  • Make it easy

Of all the things to remember about the downturn, the first is to "stick to your knitting". It's so easy to forget we are building companies for the next 20 years, not for the next two quarters. As we enter another year with dire forecasts ahead, it's easy to run after any source of revenue that's available. In the last downturn, that meant giving up the SaaS mantra and adopting a hybrid model that said, "We'll sell to any customer any way they want it."

How many companies succeeded doing that? Instead of dramatically increasing market share, all such diversification did was incur the cost of running two separate businesses under one roof. How many of the companies that went to the hybrid model are still selling? Meanwhile, those companies that stayed pure to the SaaS model, such as SalesForce.com and WebEx, lead their categories today.

While it may now seem obvious that the hybrid model won't work, there will still be pressure on SaaS companies to switch up their underlying business to improve bookings. Regardless of how it's done, switching your model will simply not help you build a sustainable business.


1  2  

   Next Page

Explore Our Topics

  • Virtual Conferences
  • Webinars
  • Roundtables

BPM in Action

March 10, 2011

The sixth annual BPM in Action 2011 Virtual Conference will explore cutting-edge market developments in BPM and describe how to leverage them for improved business operation and performance. More

View All Virtual Conferences

Smart Case Management: Why It's So Smart.

Date:Nov 05, 2009
Time:12:00 PM ET- (17:00 GMT)


Date:Oct 29, 2009
Time:15:00 PM ET- (19:00 GMT)

View All Roundtables
  • Research Library
  • Podcasts
  • News

Joe McKendrick: Part II of II: Designing Evolve-ability into SOA and IT Systems

In part two of Joe McKendrick's recent podcast with Miko Matsumura, chief strategist for Software AG, they talk about how SOA and IT systems need to change and grow and adapt with the organization around it.

Listen Now

Phil Wainewright: Helping Brands Engage with Social Media

Phil Wainewright interviews David Vap, VP of products at RightNow Technologies, and finds out how sharing best practices can help businesses understand how best to engage with online communities.

Listen Now

Peter Schooff: Making Every IT Dollar Result in a Desired Business Outcome: Scott Hebner of IBM Rati

Scott Hebner, Vice President of Marketing and Strategy for IBM Rational, discusses a topic on the top of every company's mind today: getting the most from IT investments.

Listen Now

Jessica Ann Mola: Where Will BI Fit In? Lyndsay Wise Explains

In BI, this tough economy and the increasing role of Web 2.0 and MDM are certainly topics on people's minds today. WiseAnalytics' Lyndsay Wise addresses each of them in this informative podcast.

Listen Now

Dennis Byron: Talking with...Deepak Singh of BPM Provider Adeptia

Deepak Singh, President and CTO of Adeptia, joins ebizQ's Dennis Byron in a podcast that gets its hand around the trend of industry-specific BPM.

Listen Now
More Podcasts
  • Most Popular
  • Quick Guide
  • Most Discussed

Quick Guide: What is BPM?

Learn More

Quick Guide: What is Event Processing?

Smart event processing can help your company run smarter and faster. This comprehensive guide helps you research the basics of complex event processing (CEP) and learn how to get started on the right foot with your CEP project using EDA, RFID, SOA, SCADA and other relevant technologies. Learn More

Quick Guide: What is Enterprise 2.0?

A lot of people are talking about Enterprise 2.0 as being the business application of Web 2.0 technology. However, there's still some debate on exactly what this technology entails, how it applies to today's business models, and which components bring true value. Some use the term Enterprise 2.0 exclusively to describe the use of social networking technologies in the enterprise, while others use it to describe a web economy platform, or the technological framework behind such a platform. Still others say that Enterprise 2.0 is all of these things. Learn More