Celebrating the Humble SaaS Application

Author DEREK GORDON is a marketing and sales exec with more than 20 years success in integrated marketing and sales strategy and management. He is the Chief Marketing and Sales Officer for Pathbrite.

Last Friday, Workday, the cloud-based HR and financial systems provider, had a pretty spectacular IPO. Closing at $48.69 a share, which was up 74 percent from its opening, the company collected something like $675 million. It’s likely most people missed the event.

 Over the last few years, the world has been obsessed with the social Web – social networking, social marketing, social advertising, social media – and watched with bated breath as the biggies moved to IPOs. What followed was more disappointing than thrilling as the biggest IPOs – Facebook and Zynga – stumbled badly. While LinkedIn has done spectacularly well and, more recently, Trulia has been holding its own, the performance of social Web start-ups post-IPO has been largely underwhelming.

 Meanwhile, the humble and underappreciated business-cloud application (née SaaS) companies have been chugging along, creating profitable business models and taking on massive incumbents like Oracle and SAP. Beyond Workday, there’s ServiceNow (IT management), Guidewire (insurance industry workflow management), ExactTarget (email marketing management), and DemandWare (on-demand e-commerce), among others. 

 All of these produced impressive first-day pops and strong valuations. And they got to those with solid, defensible business models, impressive financials and focused execution on stated objectives.

 Which isn’t to say the start-ups in the social space don’t work hard or don’t have a notion of how they’ll remain both competitive and profitable in the years to come. But it is to say that nothing inspires investor confidence more than solid business metrics.

 While all the glitz and glamour has accrued to the flashier social Web companies out there – which, let’s face it, is in many ways deserved – the humbler business-process applications, redolent of the SaaS applications of yore, have been quietly producing a revolution all their own.

 It’s time to take notice.

Author DEREK GORDON is a marketing and sales exec with more than 20 years success in integrated marketing and sales strategy and management. He is the Chief Marketing and Sales Officer for Pathbrite.

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