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SuccessFactors sends SaaS message to the cloud

Salesforce.com may be the poster child of the software as a service (SaaS) world, but US-based on-demand performance and ‘talent management’ firm SuccessFactors is seeing stellar growth in a similar space.

By Jason Stamper

SuccessFactors says its technology helps companies, “optimise and align their workforces with business goals and strategy.” It claims that unlike most SaaS providers, which have focused their offerings on specific business functions such as CRM, HR and finance, SuccessFactors is used by nearly every employee in an organisation across all business units, departments and geographies.

Not surprisingly, the fully hosted software company is also jumping on the cloud computing bandwagon. It appears to have some good reasons to do so, including the fact one of its customers has over 420,000 users; it has 8 customers with over 50,000 users and over 100 customers with greater than 10,000 users, including American Airlines, Whirlpool, Cadbury, Hilti, and Sutter Health.

In its recently announced second quarter results, the company posted record revenue of $36.9m, up 44% year on year. It claimed it saw non-GAAP profitability three quarters ahead of schedule, though it posted a small net loss ($2.3m) as it is still firmly in growth mode, despite the economy.

CBR recently interviewed Tom Fisher, formerly VP of technology strategy and acting CTO at eBay, who has been appointed to lead what SuccessFactors calls its ‘cloud vision’.

Fisher told us that SuccessFactors is in an unusual position because it built the product from the ground up as an SaaS application: “SuccessFactors built this as a multi-tenant architecture from the ground up,” he said. He argued that the technology is built entirely on open standards.

“Some companies that say they are SaaS or cloud companies, but it turns out a portion is done in a more traditional client/server role,” he said. Fisher said the company intends to broaden its platform further and faster by using the ‘cloud’ as a platform, as well as third parties.

“Our view is that for it to be truly cloud, all a user should need is a browser,” Fisher said. “It should be like The Wizard of Oz: you ignore the man behind the curtain.”

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What about the fact that, in the unlikely event of a network outage or intermittent network access, users of cloud computing technology like SuccessFactors would be left twiddling their thumbs?

“We’re a cloud company, we’re not going to invest in hybrid models like Google Gears,” Fisher said. “We will push forward with the idea that even if broadband network access is not ubiquitous today, it will become ubiquitous. Fast forward two years and I think you’ll see 802.11 [the Wi Fi standard] on planes and pretty much everywhere else.”

As for the fact that analysts point out that many end users are still concerned about the security implications of cloud computing, Fisher said: “The greatest security risk is inside your four walls. We have to adhere to every regulation known to man. But [with our technology] you don’t have to worry about that guy in the company who could knock systems down, or post HR data onto the Internet.”

“There is no panacea,” Fisher said, “but with cloud computing we are in a better position to prevent the theft of sensitive information than anyone else.”

SuccessFactors has raised its full fiscal year 2009 revenue guidance to 32% annual growth, which means a range of between $147- and $148m.

 

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