>> US Set to Ride SaaS Bandwagon >> Download PDF >> Date: 01/09/2007 New data from the MoneyTree survey regarding the US market shows venture capital investment is growing steadily. The big news was that corporate venture divisions invested $1.3 bn last quarter - the highest level since 2001 and a 30 percent jump over the same period last year. And software companies drew 20 percent of all VC investment during the second quarter - more than any other industry – with Software as a Service firms representing the lion’s share of that total (software) investment. According to The Gartner Group, the SaaS market will represent the single largest growth area within technology during the next few years. While the SaaS market is still relatively small at a market size of $6.3 bn at the end of 2006, Gartner estimates the size of the market to triple to over $19.3 bn by 2011. This market’s expansion outside the more typical CRM and HR space to new areas, like procurement and compliance management, will fuel the growth. As such, the market for senior level executives to drive the growth of these newer companies will increase. Noted successes within this space, firms like Salesforce.com, are few, but there are many which are growing, morphing out of the more well known and traditional ASP firms. LGES have recently served several SaaS firms, searching for the experienced CMO or VP of Sales Executive and have found that while there are quite a few folks who have had a level of experience in SaaS, most of the SaaS firms they have served in are small. Thus, it is best to incorporate very successful enterprise software experience with the latest two to three years of smaller firm experience with one or two SaaS firms, and also, where they have gained experience in internet marketing to the SMB market. “While many SaaS firms would like to have their candidate have SaaS experience prior to hiring, most recognise that SaaS is relatively new, albeit a fast growth segment of our market. Most firms are making such experience a ‘nice to have’ rather than a ‘need to have’,” says Currie. However, the scale of change involved in moving to a SaaS approach is proving hard for many vendors to manage. “Due to the law of large numbers, traditional IT product models are becoming victims of their own success, while the relative smallness of new approaches facilitates growth much more easily,” said Ben Pring, research vice president for The Gartner Group. The SaaS approach is here to stay, it appears, until it too is superseded by new technology and newer ways to deliver it.  We suggest that it is time to get on the bandwagon and, if you don’t want to occupy a permanent seat, hold onto the handholds like you would on a San Francisco cable car!  See www.mosaicexecutive.com for more information on the Mosaic Global Executive Search alliance.

Bob Currie, Partner at LGES — a fellow Mosaic Global Executive Search alliance partner explains how Software as a Service (SaaS) will drive investment and recruitment opportunities.