As of April 9th 2013 MGI Research added Interxion Holding B.V. - a Dutch-based provider of data center and interconnect services to MGI Cloud 30 Index - an index of 30 cloud equities.

Interxion, which trades on the NYSE under the INXN symbol, replaces Saba Software and holds about a 3% target weight in MGICloud30. Other key components of the MGI Cloud30 Index include companies such as Equinix, Dupont Fabros Technology, Digital Realty Trust, Salesforce.com, Rackspace and ServiceNow, among others. For additional information on the index and its components see a recent research note: MGI Cloud 30 Index - Is the Cloud Trend Intact?

Relevant Research:

Rackspace Revenue Miss: An 800-to-1 Punishment

On Nov 13th MGI Research is hosting an intensive half-day, invitation-only “21 conference” focused on technology and business innovation in SaaS.

Earlier in September we had an in-depth conversation with Chris Drake, CEO of Firehost - an emerging supplier of secure cloud computing infrastructure services. In this 20 Questions session, Chris shared his views and practical experiences with bringing to market a secure cloud offering.

Related Recent Reports and Comments:

Video Replay of the "Battle of PaaS Evangelists July 25 2012"

Is Security a Barrier to Cloud Adoption?

On July 25th 2012 MGI is hosting a webinar on Platform as a Service (PaaS) trends.

Platform as a Service or PaaS is being touted as the express elevator to faster development, integration and deployment of Cloud applications. In the past, integration middleware was largely the domain of large companies as it required a significant upfront investment. Integration costs often added upwards of 60% of the total cost of a business application. PaaS promises to transform the economics of cloud application integration and delivery. Is PaaS a fundamentally new, must-have technology with a clear ROI or is it just a repackaging of old concepts retro-fitted for the cloud?

The overall tenor of Oracle management comments post its latest earnings announcement was very upbeat. While multiple headwinds persists, i.e. EU, stronger US dollar, launch of multiple new product initiatives such as Public Cloud, - the stock looks ready to try to attempt a break to the other side of the downward trend line.

In a research note published last night - SAP Buys Ariba – A Fallen Angel Finds an Exit, we analyze the merits and metrics of this transaction and the impact on SAP customers, investors and competitors.

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.