The Top Five Vendors Using SaaS

Name: SuccessFactors

Location: San Mateo, Calif.

Why it’s in the top five: Most people outside the world of Human Resources have never heard of SuccessFactors. Soon enough, they will. Founded in 2001, the firm uses SaaS to deliver its talent management services, and has managed to increase revenue by 95 percent between FY2006 and FY2007 to $63.4 million.

The company also expects to expand its workforce from 600 employees to more than 1,000 by the end of the year. If all of these numbers aren’t impressive enough, SuccessFactors’s customer base is growing, too; President and CEO Lars Dalgaard says the firm is up to 1,750 customers and is adding at least three new clients per day.

What to watch for: More growth. Ben Pring, research vice president with Gartner, says that SaaS is particularly well-suited for Human Resources because of HR’s traditional existence as a standalone business unit. “If you’re an HR manager, you’re not that close to your own internal IT people,” says Pring. “There’s not a tremendous need or requirement to integrate HR into other applications of the business, and SaaS appeals to those people who just want to get business done quickly and not look for incredibly expensive application.”

Like NetSuite, SuccessFactors could grow to become an acquisition target, but one has to love the firm’s independent spirit; its “Rules of Engagement” include, “I will not BCC (blind copy) anyone.”

Name: Adobe Systems

Location: San Jose, Calif.

Why it’s in the top five: Few can argue with Adobe’s status as a powerhouse. The company achieved a record $3.16 billion in revenue in FY2007, up from $2.58 billion in FY2006. Still, to consider Adobe a SaaS leader might seem to some as revolutionary; after being founded in 1982, the firm made perhaps its biggest headlines in the world of desktop publishing.

But today, an unofficial 10 to 15 percent of the company’s business is in SaaS, and based largely on the success of Acrobat Connect and Adobe Document Center, the firm plans to roll out online versions of many of its other popular products, too.

What to watch for: As online collaboration and Web conferencing become more popular, Adobe’s plans to supplement existing services with Web-based value-adds look brilliant. Analysts have predicted significant growth for Adobe in these areas, both largely considered to be “green fields” despite the success of competitor WebEx.

Even after the resignation of former CEO Bruce Chizen at the end of 2007, experts were excited at Adobe’s prospects for the coming years. Michael Cote, an industry analyst with RedMonk, opines: “Adobe doesn’t seem to have gotten much attention for the SaaS offerings it has,” and that the company “uses SaaS more as a feature than the sort of all-encompassing replacement for desktop technologies.”

Name: Axentis

Location: Cleveland, Ohio

Why it’s in the top five: When companies bill themselves as the “world leader” in a particular market, it’s usually hyperbole. Not so with Axentis. Founded in 1999, today the company boasts overwhelming control of the on-demand governance, risk and compliance (GRC) solutions market, and is North America’s most widely adopted solution to achieve compliance with the Sarbanes-Oxley Act of 2002.

While the company is privately held, experts agree the firm is wildly profitable. Driving this success is the unyielding performance of Axentis Enterprise (Ae), a SaaS product which addresses SOX 404, SOX 302, the Health Insurance Portability and Accountability Act and CoBit, to name a few.

What to watch for: Considering that Axentis customers include SunGard, Bombardier, Novartis, and BP Corp., continued growth for this company is a pretty safe prediction. Pring, the analyst with Gartner, says that the company’s SaaS approach to compliance is so appealing because at this point, many companies need to get their GRC solutions in place quickly.

“When you look at the compliance space, you might be talking about 10 or 15 or 20 divisions in a big business,” he says. “Trying to do on-premise deployments or rollouts across all those environments is a challenge, and the SaaS model makes deployment easy.” Perhaps the company’s only challenge: complacency. Not a bad problem to have at all.