MGI Research

Saturday, Sep 19th

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Software-as-a-Service (SaaS)

From buzzword to a multi-billion dollar market, software as a service (SaaS) has grown explosively.

  • Will the SaaS revenue growth continue?
  • Can SaaS software move beyond departmental/horizontal applications and displace legacy ERP systems?
  • What are the limits of SaaS applications?
  • How should CIOs evaluate the risks and benefits of SaaS vs on-premise solutions?
  • How can on-premise software vendors successfully transition to SaaS?
  • How can CIOs effectively balance SaaS with their legacy application software portfolios?
  • What are the best practices for evaluating and implementing SaaS solutions?
  • How should SaaS companies be valued? What are the best SaaS valuation metrics?

These are some of the topics addressed in MGI’s research agenda for SaaS.

Companies covered include, Kenexa, Success Factors, RightNow, WorkDay and many others - public and private.

20 Questions with CEO Jeremy Roche

Jeremy Roche, CEO of FinancialForce.comIn spite of a massive consolidation and dominance of SAP and Oracle in the enterprise applications software market, a new breed of Software-as-a-Service (SaaS) vendors is emerging. These new vendors are attempting to leverage the existing cloud platforms., - a company whose investors include and Unit4, - was one of the first application software vendor to build a SaaS application on top of the's ecosystem. The company is attempting to leverage the benefits of an established cloud platform while also trying to re-invent the core financial applications. In this 20 Questions interview, CEO Jeremy Roche shares his views on building financial apps in the cloud, leveraging the platform and on strategies for building a successful SaaS business. 
Attachments: (For Subscribers)
Download this file (20 Questions with CEO Jeremy Roche - MGI Research.pdf)20 Questions with Jeremy Roche, CEO of

SaaS Valuation: What Price is Right?

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 (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. 

Attachments: (For Subscribers)
Download this file (MGIResearchSaaSValuationMar2011.pdf)SaaS Valuation - What Price is Right?

Apps in the Cloud - a Case Study (NYSE:CRM; MGI-X:1,302) has opened up its Cloud infrastructure and development platform to third parties. This note details how a UK-based healthcare IT applications company utilized to deliver a production-ready application in less than 12 months. Examines pros and cons of using for healthcare and international markets.

Attachments: (For Subscribers)
Download this file (MGI_Research_-_Force.com_Case_Study.pdf) Case Study - The Next Billion in Revenue

SalesForce - The next Billion in (CRM) has achieved an unqualified success in becoming the leading provider of Software-as-a-Service (SaaS) solutions for Sales Force Automation. The company is now attempting to broaden its strategy by aiming at the market for SaaS application development tools and services, essentially marketing an integrated suite of development tools and hosting services. CRM has recently hosted a widely successful user event - Dreamforce 2009 which played to capacity crowds listening to company presentations delivered by management with a visibly renewed sense of confidence. While the market potential is enormous, the company strategy for translating this opportunity into shareholder value is still a work-in-progress.

Attachments: (For Subscribers)
Download this file (MGI_Research_-_Salesforce.com_The_Next_Billion_in_Revenue.pdf) - The Next Billion in Revenue

SaaS Valuation Update July 2009 - What Price is Right?

This research note compares valuation multiples of SaaS and Enterprise Software companies and examines factors that drive valuation premiums. 12 pages. Among companies covered: CRM, RNOW, CNQR, SFSF, VOCS, TLEO, N

Attachments: (For Subscribers)
Download this file (MGI_Research_-_SaaS_Update_July_2009.pdf)MGI_Research_-_SaaS_Update_July_2009.pdf

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