The procurement software market is undergoing major disruption as SaaS companies offer a value proposition that many business executives find compelling.  Ariba (MGI Score: 577) and Concur (MGI score 958) are two publicly listed companies that compete in this broadly defined procurement/spend management market space.  Venture-backed Coupa now claims to be able to contractually guarantee its customers a 1% reduction in operating spend and a number of blue chip customers are already using this cloud-based solution. In an in-depth 20 Questions conversation with Andrew Daily of MGI Research, Rob Bernshteyn, the CEO of this Silicon Valley-based company sounds off on a spectrum of topics - from Coupa's approach to procurement and spend management to the role of central IT to the tradeoffs Coupa is making to stimulate growth and long-term market position. 

We view the Higher Education market as being ripe for a significant IT transformation. The higher education software vertical was once perceived as having little appetite for technology.  That is no longer the case. Today, higher ed is feeling the full force of all the disruptive technologies at a time when pressure to reduce costs is rising.  Enrollment Rx CEO Lawrence Levy joins us for 20 Questions, and shares his views on the major changes taking place in higher ed technology, as well as his experience of running his business on salesforce.com’s Force.com platform, and why the established CRM and SIS vendors in higher ed should be concerned about their customers.

On Monday, October 24^th 2011 Oracle (NASDAQ: ORCL) announced that it was offering to buy RightNow Technologies, Inc. (NASDAQ: RNOW) for approximately $1.5 billion. Oracle will pay $43 per share, a nearly 20 percent premium to RightNow’s closing price of $35.96 on previous Friday. We see the combination as a positive for both RNOW and ORCL. This is the first sizeable cloud software deal for Oracle. Remarkably, the acquisition Enterprise Value (EV) multiple is within 5% of what would have been predicted for RNOW by our SaaS valuation model in March 2011.

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Valuations of leading Software-as-a-Service (SaaS) companies continue to set stock market records. Technology entrepreneurs, executives and investors are faced with critical questions of how to properly position their companies for optimal valuation. Should SaaS companies be focused on growth or profitability?  Does size matter? What operational levers can generate the highest impact on valuation and stock market performance? What characteristics separate the best-in-class software firms from the average? Are the current multiples sustainable? What companies or segments of the SaaS sector are undervalued and why?

This research report focuses on the key issues related to valuation, operating and market performance benchmarks of SaaS and Enterprise Software companies. Includes data on over 100 publicly trading software firms such as Salesforce.com (CRM), SuccessFactors (SFSF), Taleo (TLEO), Kenexa (KNXA), Concur (CNQR), Intuit (INTU) and many others. Contains a detailed analysis of factors that drive valuation for SaaS firms, including a simple formula for valuing SaaS companies.