There is a very decent, albeit not foolproof treatment of Salesforce.com (CRM) on SeekingAlpha.com. The article looks at number of relevant accounting red flags but sometimes fails to interpret those correctly or put them into context. Some of commentary following the article highlight the discrepancies.

The 2012 Software-as-a-Service (SaaS) valuation guide is now available to MGI Research subscribers as well as in the MGI Research Store and via Bloomberg, L.P.

In several research reports over the past year we have focused on the role that security plays in the rate of cloud adoption. On a couple of occasions we pointed out the functional gaps that exist in many typical cloud offerings. It has also been our point of view that any actual or perceived shortcomings in security are not likely to meaningfully hold back the current adoption trajectory for the cloud. The question is can this adoption trajectory change significantly if the actual and perceived level of trust for the cloud is elevated by additional security features and/or new standalone and more secure offerings? In our view any improvement to cloud security capabilities, creation of security standards and improved transparency will catalyze cloud adoption amongst many current skeptics.

The $16 per share deal to acquire Convio (CNVO) by Blackbaud (BLKB) translates into an enterprise value that is slightly below that projected by our March 2011 SaaS valuation model but is still within about 10% of the target. We believe, the price reflects Convio's relatively small revenue of $77 Million and sub-par growth, profitability and efficiency as measured by the MGI Index (CNVO MGI Index is 643). In our view, the valuation offered is also a function of a dearth of potential buyers in this space. BLKB paid a 49% premium vs. the last closing price for CNVO but still seemingly got a good deal.

Interview with Rootstock Software CEO Pat Garrehy

Is SaaS ready to support complex manufacturing solution requirements?

Until recently, successful SaaS companies have excluded core manufacturing functionality, and focused on departmental and/or horizontal functionality far from the plant floor.  That’s about to change. 

While the overall analyst commentary generally has been pretty constructive and supportive of SAP’s $3.4 Billion bid for SuccessFactors, Inc., many questions remain.  Although many analysts believe SAP is overpaying for SuccessFactors (SFSF), in our view, the valuation is not unreasonable and is not the critical factor in assessing this deal.

For a 2nd time in less than a week, a purchase of a SaaS vendor reconfirmed our SaaS valuation model. IBM is paying $440Million in cash to acquire San-Mateo, CA-based DemandTec (DMAN).

According to the MGI SaaS valuation model, SAP did not overpay for its acquisition of SuccessFactors.

In a recent “20 Questions with the CEO of Plex Systems” MGI Research’s C-level interview series with leading technology industry innovators, investors and executives – MGI’s Andrew Daily talked with Mark Symonds, CEO of SaaS ERP vendor Plex Systems, Inc. SaaS upstarts are a real threat to the established revenue streams of major enterprise applications vendors.