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Why are Talent, Performance & Learning dominating the cloud??
Kevin Dobbs at Montclair Advisors recently posted some interesting data on how much investment it takes to build a Software-as-a-Service company.
http://montclairadvisors.com/blog/2010/01/how-much-investment-does-it-take-to-start-a-saas-co/
While the data is interesting, there was something else here that really caught my attention: 7 of these 15 companies are in Talent Management, Performance Management, Human Capital Management, and/or Learning Management. (Not that I could actually draw clear borders between any of those categories, but those are the words I see on the various companies' websites.)
I expected to see CRM and ERP stuff here, but was pretty surprised to find 47% focused on people, what they know, and how they perform. As to the 7, I'm counting: Blackboard, Kenexa, RightNow, Salary.com, SuccessFactors, Taleo, and Ultimate Software.
I'm wondering: why such a focus here for successful SaaS companies?
Is it that these are newer application areas with less of a legacy to overcome?
Is it that corporate IT doesn't want to be bothered with "fluffy HR stuff" so others have filled the demand?
What do you think?
My opinion is that it's because they have exposed a historical weak point (HR applications and functionality) of the big ERP vendors. If you look at the founders and senior leadership team of many of these niche vendors, a large percentage spent time at a large ERP company.
posted by matt
February 1st, 2010
Consider this: For every SaaS company there is a need to train and manage talent development. SaaS companies already recoginize the benefit of capitalizing on services in the cloud because that's what they offer, afterall. These SaaS companies are focusing on providing their own services and don't have time to build a second business around mananging human development, so they outsource it. The numbers (7/15 or 47%) actually make sense in this light; every major SaaS company employs SaaS to manage human development within their own company.
posted by Katie Stroud
February 5th, 2010