Posted by Bob Warfield on August 28, 2008
I heard via Enterprise Irregular Anshu Sharma that Lawson’s CEO Harry Debes has predicted the demise of SaaS in 2 years. So I sez to myself, “Self, this is really bad, you work for a SaaS company, you blog about SaaS, and you have a lot SaaS company stocks in your investment portfolio, and it’ll all be over with in 2 years.”
So, I figured I’d better go read more about Debes’ prediction. It seems the salient issue is one of profitability. Namely, SaaS doesn’t have any. Debes’ waxes eloquent about how Lawson dodged a bullet by not entering the SaaS market and this has made them so much more profitable.
So, I quick light up Yahoo!Finance and check it out. Lawson is selling $850M in revenue a year and their EBITDA is $97.54M. Yay! Hmmm. Better check Salesforce.com. It’s listed as $970M in revenue and $78.72M in EBITDA. Hey wait a minute Harry, you’re more profitable, but not a lot more profitable.
Well what do the analysts think? Looks like they’re predicting annual growth of 30% for Lawson and about 43% for Salesforce.
Well maybe this is all just a Salesforce aberration and other SaaS companies can’t match the numbers. What about my other favorite, Conquer? Back to Yahoo, and it looks like they’re selling $194M and their EBITDA is $42.72M. Wow! They make half as much EBITDA as Lawson on 1/4 the revenue? Who is the profitable one now?
What to make of it? Looks like Harry Debes may have gotten away from his handlers just long enough to announce a completely ridiculous prediction when he said the SaaS market would collapse in 2 years.
Vinnie Mirchandani says SaaS will survive because it’s what customers want. I couldn’t agree more having talked to customers after having given them a choice of the same product SaaS or On-premises.
Posted in saas | 8 Comments »
Posted by Bob Warfield on August 24, 2008
In an effort to increase tax revenues, NY has been trying to tax purchases by NY state residents from online merchants outside NY. It’s been a controversial measure and Amazon has sued over it arguing that the law is unconstitutional. Now online computer and gadget seller NewEgg has announced it will no longer collect the NY state tax either.
Tough break for NY which needs the revenues, but it sure seems like they’re reaching to try to levy this kind of tax. If the states all get busy taxing things going on outside their borders it isn’t clear where it will all end. Ironically, NY has a great base of mail order merchants (who hasn’t heard of the many great camera sellers, for example?). Onerous taxing schemes can backfire by incenting sources of tax revenue to move away over it.
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Posted by Bob Warfield on August 21, 2008
Another great Seth Godin post. He is so pithy. Very few words, very strong messaging. I’m sure there is a correlation there. I wish I could be as concise!
His message this time is that it isn’t what we have that makes us unhappy, but what we don’t have. It is the marketer that so often breaks through our blissful ignorance to inform us that something critical is missing from our lives. Thus begins the lust. As a gadget freak and general technophile, I am painfully familiar with the lust for THINGS.
Godin makes another interesting point. If you are a marketer trying to grow share (or grow a new market I would submit), that is far easier than simply trying to sustain a large share. Why? Because by definition people already have the large share product, so it isn’t making them unhappy.
Posted in Marketing, strategy | Leave a Comment »
Posted by Bob Warfield on August 17, 2008
I’m back from a much needed vaca to the Big Island for a little diving, some sun, and some relaxation to reboot my worn out brain cells.
Since coverage began, my wife has been glued to the Olympics, and I have to say there’ve been some choice moments I’ve caught while reading alongside her.
I saw Jamaican Usain “Lightning” Bolt’s amazing 100m dash. He made it look so easy to get the gigantic lead he developed and actually seemed carefree and slowing down at the end of the race. Very exciting!
Michael Phelps quest for a record 8 gold medals is another one I’ve been catching glimpses of.
Imagine my surprise when I read a Techcrunch article saying people are unhappy because CNN is putting results into Twitter as they’re available, but the networks televise much later. So, people reading their Twitter feeds are seeing the results of races they haven’t watched and they’re upset.
It just seems like Twitter can’t win. Either we’re applauding how it is the fastest source of news on the Internet or we’re bemoaning that news is appearing there too fast.
Posted in Web 2.0 | 1 Comment »