Company:                 TOA Technologies
Started:                     2003
Located:                    Cleveland, Ohio
Geography:               Global
Market:                      Field Service Management

Products:                   ETAdirect

Key Customers:       DISH Network, Arhaus Furniture, Cox Communications, Racktime Sales & Marketing, Morrison Utility Services, Cablemás

Website:                     TOA Technologies

Blog:                          The Service Window (Experts blog)    It’s About Time (CEO’s blog)

Twitter:                        @toatech

Recent News:

Forbes names TOA Technologies one of America’s Most Promising Companies

TOA Technologies wins prestigious European Smart Metering Award

TOA Technologies and Tecnocom establish a strategic partnership to offer comprehensive field service management solutions across Latin America

I asked Yuval Brisker, co-founder and CEO of TOA Technologies, a few questions about his business and view of the SaaS market in 2013 and beyond.

Did you start out as a Software-as-a-Service company?

Yes.  SaaS was an absolute must for us and part of our founding vision.  We believed very strongly that software of all kinds, both consumer and enterprise, would migrate to the Web over time, because of both the cost savings from outsourcing the IT infrastructure and from the ever-increasing computing power that is available. In our market, field service management, the computing power aspect of Cloud gives us a major advantage. From the beginning, we knew that our customers would use the system in a way that challenges on-premise systems, a lot of data needing to be retrieved and processed, and then executed into decisions, all in a very short amount of time. I’m talking specifically about routing and scheduling a batch of jobs all at once, something that on-premise systems oftentimes need to do overnight because it’s the only time that there’s enough computing power available. But because the Cloud treats computing as a utility, this problem goes away, and we’re able to process more than 10,000 jobs in less than four minutes.

Even with this clear advantage, we knew that being a SaaS business in the early 2000’s wasn’t going to be easy to sell to enterprises. Sure, there were companies like Salesforce.com that were paving the way for us and other enterprise SaaS companies. But I would argue that we had an even tougher challenge in front of us because the businesses our software supports s the last mile of their revenue generation – the field service person delivering goods and services. Therefore, we’re in a unique position of both privilege and enormous responsibility to make sure our now tens of thousands of users in the field have availability all of the time. There is absolutely no room for error, which is why we’ve built an amazing service assurance team that now delivers an almost unmatchable uptime of 99.996 percent.  I’m particularly proud of this part of TOA, because we truly brought SaaS to a mission-critical process to these businesses on a global scale.

Why do your customers buy from TOA Technologies?

TOA’s customers all have one thing in common a majority of their revenues comes from a product or service being delivered in the field. When you have that much riding on a single area of your business, you’re always going to want it to be better connected, more engaged, and more transparent.

At first, TOA’s customers typically want to buy our field service management solution for efficiency and productivity so that they can get more out of the people that they have. After using our product they quickly realize the other ways to generate value. For example, TOA’s system actually measures how long it takes people to do work and uses that data to create individual profiles of each person, it’s able to predict ahead of time exactly when a job will happen and how long it will take. Not only does this reduce the wasted time in a schedule, but also now the business can communicate with customers before their appointment, keeping them in the loop and actually making them more engaged in the process.

With this combination of cost savings and improved customer experience, our value proposition has never been more relevant for any company that does scheduled and structured work in the field, all the way from a lawn care service to a field marketing company or even a cable operator.

What do you see as the key trends emerging in the SaaS industry?

Traditional on-premise enterprise software will continue to be upended by SaaS vendors, very much like what TOA has done in the field service management software space. Therefore, we’ll continue to see the Cloud question disappear. What once was, “Why aren’t you on-premise?” is now “Why don’t you have a Cloud option?” It’s certainly a good thing that this conversation is shifting, but SaaS vendors need to continue evangelizing the proven benefits of their delivery model.

In the lifecycle of this Cloud versus on-premise debate in enterprise software, we’re in the midst of the on-premise vendors fighting back. Specifically, we’re seeing vendors either buying their way into the market, or they’re using a public Cloud like Amazon AWS to replicate the functionality of the on-premise solution in the Cloud. What’s most interesting is the reactions from our prospective customers, especially those that were previously hesitant about Cloud. They’re viewing all of these vendors’ moves into the Cloud as evidence that Cloud is the place to be for enterprise applications. So for us, in a way, this dynamic is making our conversations easier and sometimes I think it’s even driving new demand as well.

This also means that SaaS vendors absolutely need to continue to drive the Cloud conversation. In other words, SaaS vendors need to go beyond the early cries of “no more software” and truly educate the market on what the Cloud really is and isn’t, especially in the enterprise software space.  These buyers are really concerned about with reliability, scalability, durability and data ownership. Here are a few questions that we at TOA think help best identify if a vendor is providing a solution that’s enterprise SaaS-worthy:

• What is your plan to invest in the Cloud including security, reliability and durability measures?
• If we use a Cloud solution, who actually owns my data?
• Do you guarantee a certain level of uptime? If yes, what is it?

What is your market outlook for 2013?

2012 was the year that it became evident that mobile, social and Cloud technologies were converging in a way that would forever change the face of the enterprise. We see this convergence as an opportunity for businesses to fundamentally change how they operate, propelling them into new levels of collaboration and empowerment. And for TOA, this opportunity couldn’t be any clearer than it is with the field service ecosystem.

Think about it: Field service sits between a product or service and the profit from that product or service. Where field service used to be a necessary evil and considered a cost center with very little visibility or accountability. Now field service can now be a value driver, saving businesses money and improving customer satisfaction ratings. Because of mobile, managers can look at an aggregate view of what’s happening across their business in just a moment for any given field service process, for any field employee. And by connecting it with the Cloud, the data is always up to date.  The benefit is that feeding our field service management application over the Internet, outbound predictions of when the next appointment will happen and if it’s in jeopardy, are as close to real-time as it gets. Ultimately, what this creates is a new kind of empowered field employee, one who is enabled to be on-time because realistic expectations were set, and one who is can get answers to questions on his own using peer groups as a knowledgebase.

With these amazing opportunities, this is the moment for field service management to flourish. Mobile, social and Cloud are actually driving companies to look more seriously at how they can evolve their field service lifecycle, not only to be more productive, but also to create more satisfied employees who also care more about customer satisfaction. These are long-term changes that go far beyond automating fieldwork. Field service management, powered by mobile, social and Cloud, actually evolves the job roles and the processes altogether. It’s really becoming a revolution and we’re right in the middle of it, and we can’t wait to see where it takes our customers and us.

     

Recently I was on another trip to Europe to speak with Oracle partners who were interested in understanding business considerations related to building a successful Software-as-a-Service business.

Last November, I also spoke to a packed house of interested Independent Software Vendors (ISV’s) outside of London about SaaS and its many business considerations.  The audience was quite engaged and asked a lot of questions. From that meeting it appeared that SaaS was starting to become a real strategic consideration for many European ISVs as they were thinking through their strategies for 2013.

It is also important to remember that Europe is not like the United States, and comprises many different countries, markets, languages and cultures.  As example what is popular in the UK may not be of interest to ISVs in other parts of Continental Europe. I have always felt that the SaaS business model would play well in Europe, because the software buyers are:

• Price conscious
• Want to pay-as-they-go
• Like the idea of trying software before you buy it
• Geographically dispersed

The traditional concerns around SaaS are now beginning to be solved, especially as they are related to data sovereignty and security. These were many of the same issues that were holding back SaaS in the US about five years ago but once they were addressed, the overall adoption of SaaS solutions dramatically increased.

So I find myself in Stockholm and it was clear that there is genuine interest in SaaS, but the pain of the broader market shift to the Cloud appears not to have really hit Scandinavia yet. Executives that I spoke to understand that the market is evolving, and they can see it very clearly happening in the US, but aren’t compelled to make the move to SaaS just yet.  Even though their customers are starting to ask about subscription pricing plans, they are still willing to accept on-premise software. For many of the larger software companies, they have not felt the pain associated with start-ups jumping into their market. They know it is coming, but they feel they have more time to adjust.

Starting a new SaaS business or transitioning to your business model is a difficult proposition. Companies are only going to endure this pain, only if they really have to do it. This was the mindset of the major ISV’s in the US prior to the 2008 economic downturn. They were convinced that SaaS and the Cloud were just marketing fads that would probably go away. As it turned out, not only didn’t it go away, but also the trend accelerated. There were many new SaaS start-ups who jumped into the market and put a lot of pressure on the major players like Oracle, IBM and SAP. Then over the past two years, it’s these big players have responded by moving aggressively into the SaaS market, starting a major M&A binge that has seen them buy out some of the best known SaaS firms including Ariba, Eloqua, Kenexa, RightNow and SuccessFactors. With a similar economic situation now going on across Europe, we may be seeing the beginning of another market move to SaaS.

One of the more interesting aspects of my recent trip to London was a visit to an innovative company called Central Working. I was able to discuss the idea behind Central Working with one of company’s founders, Steve Pette, who used to run innovation at Virgin Atlantic.  This company is a new breed of business incubators that is springing up across Europe, which provides a collaborative environment and support for all types of new companies including software start-ups. This sort of software incubator is something that you would commonly see South of Market in San Francisco or in Cambridge in Boston. Central Working takes the incubator concept to the next level by providing an extra layer of collaboration where members can get connected to other members with complimentary ideas and skill sets.

For example, someone may be working on a cool iPad application but not be an experienced businessperson. Central Working’s management will look to partner this member up with another member who might be a former software executive, which might result in the connected members forming a new start-up. During my short visit, it was clear that there is a lot of energy in the start-up area of London called Shoreditch, and there many new companies emerging who are building the next generation of mobile and SaaS software.

Montclare compiles the market’s leading of SaaS and Hybrid companies globally, the SaaS Top 250, and today there are currently fewer than 10 European ISV’s on the list today.  After my recent trip to London and Stockholm, it appears that there is a lot of interest in SaaS in Europe but we are still in the early stages of a major market move. By 2014-2015 we should see a critical mass of customers pressing their local ISV’s for Cloud-based products, and there will be a lot more SaaS firms in Europe.

     

We are really pleased to announce that Montclare has acquired DreamSimplicity, the leading social site for software professionals, technology investors and SaaS enthusiasts to learn about the SaaS industry, share ideas and view thousands of original videos created by DreamSimplicity. The acquisition is a welcome compliment to our core product offering, the SaaS Top 250 Report, where the world’s leading SaaS companies are identified and categorized by growth stage, geography and type. The report provides critical insight into the most significant SaaS companies for technology professionals and investors to make critical business decisions through industry insight.

DreamSimplicity.com is widely known for its large library of original video content including executive interviews, company profiles and product demonstrations. The site, including all its members, posts, business directories and videos will be transitioned to a new technology platform in the coming weeks which will provide enhanced features for users.

“We are very pleased Montclair showed significant interest and an appreciation for the community we built,” said Matt Childs, CEO at DreamSimplicity. “Our members and the volumes of content submitted by our community are extremely valuable to anyone involved in SaaS. Montclair understands the significance of this material and intends on preserving, growing and expanding upon it.”

“Matt and the DreamSimplicity team have created an incredible social community where all members share an interest in SaaS,” said Kevin Dobbs, CEO at Montclare.

“We are privileged to now be a part of this community and look forward to providing its members with more value by producing more video, adding in-depth analysis on SaaS companies and providing member access to the industry’s thought leaders. We are committed to strengthening its reputation as the premier resource for all matters SaaS.”

Membership to this SaaS social community is free. Montclair welcomes new members interested in SaaS, whether exploring the topic for the first time or currently working for companies with SaaS offerings. Organizations interested in engaging with our community members may contact us at info (at) montclare (dot) com.

     

Company:                     Apptegic

Started:                          2010

Located:                        Somerville, Massachusetts

Geography:                   United States

Market:                           Customer Success Automation

Products:                       Apptegic B2B and Apptegic B2C

Key Customers:            Dyn, Constant Contact, TribeHR, and Acquia

Website:                         Apptegic

Blog:                                Apptegic Blog

Twitter:                           @Apptegic

I asked Karl Wirth, CEO and Founder of Apptegic, a few questions about his business and view of the SaaS market in 2013 and beyond.

Did you start out as a Software-as-a-Service company?

Yes, Apptegic started as a Software-as-a-Service company that helps other SaaS             and online companies to better understand and respond to their customers.

Why do your customers buy from Apptegic?

SaaS businesses live and die by two key rates; conversion rates of interest to purchase and retention rates.  Apptegic customers buy from us because we can help them to increase both rates.

For many SaaS companies, the key conversion rate is that of free-to-paid or other words freemium-to-paying or free-trial-to-paying.  By helping a company to better understand each free users engagement with their service, Apptegic can help that company convert more of their free users into paying customers.  This allows sales teams to better able to focus on the highest value prospects who are most likely to purchase.  For marketing teams this means they can proactively target free users inside of their app to maximize their initial adoption and success with their service.  This means the entire company is now more informed about how each user is or isn’t using their service and so can better serve them.

It is a similar story for retaining and upselling existing customers.  SaaS businesses are always driving down churn rates by retaining as many customers as possible and upselling them additional services to generate higher levels of revenues per account.  This is hard to do that if the business doesn’t understand its customer’s behavior.  By enabling SaaS businesses to know each customer’s level of engagement with their business across their customers visits, actions, and other business metrics of importance.  Apptegic can help sales and customer success teams prioritize their work, get alerted to impending problems and opportunities, and respond appropriately for maximum impact.  Our product also enables marketing teams to automate many aspects of customer success communications with behaviorally targeted messages appropriate to each user right inside of their web experience.  This is one way Apptegic increases customer retention.

What do you see as the key trends emerging in the SaaS industry?

Customer Success is emerging as a new key role inside of software companies who are focused on optimizing customer retention.  In a business where everything depends on renewals, a function dedicated to maximizing each customer’s success with the service has become imperative.  Apptegic is making the tools for this new customer success function.

Free and freemium software business models are no longer emerging trends but they remain an important ones. There’s already a good amount of risk whenever a business decides to implement any new functional processes or software feature, and offering a free trial or freemium offering can be a powerful selling tool.  Of course, free is not useful for a business unless it can be monetized.

Real-time in-app communication is another key trend.  Over the past year, an increasing number of SaaS applications have added in-app messaging to guide their users to success.  Currently the focus is on calling out new features that haven’t been used before.  This trend will continue and move toward behaviorally targeted in-app messaging that brings guidance and appropriate selling directly into the solution.

What is your market outlook for 2013?

2013 will be another record year for Apptegic.  We have built the most powerful, easy-to-integrate, and easy-to-use customer success solution on the market.  We will continue to enhance our solution while rolling out key partnerships, integrations, and functionality.  We are seeing the practices and tools of the SaaS industry, and interest in our solutions, cross from Business-to-Business (B2B) and Business-to-Consumer (B2C) SaaS companies in other verticals including online communities, financial services, and membership commerce.

     

This year’s OpenWorld conference was really big, with more than 50,000 attendees and a number of venues across downtown San Francisco.  The big news wasn’t the size of the show but the sharpening of Oracle’s strategy as it relates to the Cloud.

Larry Ellison has long stated that the hype over Cloud Computing was ridiculous, considering it is basically the same infrastructure that supports the Internet and their customer’s internal infrastructure.  You still need data centers, servers, firewalls and database software to power the Cloud.

Cloud Strategy

What was clear at this year’s OpenWorld was that there was much less focus on Oracle’s ‘Exa’ hardware and more around the company’s broad application and infrastructure product portfolio and how they fit into their overall Cloud business strategy.  Mark Hurd’s keynote touched on Oracle’s 4 point product strategy:

• Offer Best-of-Breed Solutions – Focus on open and standards-based products including Java, Linux, and Solaris
• Vertical Integration of Solutions  - The Exastack products are a good example of this approach (Similar to Apple’s philosophy)
• Next Generation of Applications – Modular, multiple deployment options, ability for customers to mix-and-match products
• Deliver Products Through the Cloud

This is a more evolved way of looking at their product portfolio and rationalizing it for their next generation of Cloud solutions.  It is also a realization that not only market enthusiasts are pushing them for more SaaS-based offerings, but Oracle customers are also keenly interested in ways to move more of their compute into Cloud.  These customers are not the SMB crowd but the large Fortune 500 and Global 2000 companies that are looking for flexibility and cost efficiencies, rather than just going along with the next IT fad.

Infrastructure-as-a-Service

Although the Oracle Cloud was announced last year, the strategy has now evolved to more of an Infrastructure-as-a-Service offering that provides secure, virtualized compute and storage services. For this new IaaS Oracle will use it’s Exa hardware, Linux or Solaris operating systems, Fusion middleware and Oracle database as the foundation of it’s Cloud platform.

The other provider who is often mentioned by Oracle, who is offering a similar offering is Amazon’s EC2 platform.  AWS has definitely been a revolutionary player in the Cloud but their solutions have typically met the needs of small ISV’s or development and testing projects.  Oracle continues to focus on delivering an enterprise-grade solutions for the Cloud that will meet the complex needs of ISV’s and larger global organizations. The Oracle Cloud is built on top of ten data centers spread out globally, to meet the security and availability needs for their customers using its new IaaS offerings.

The Oracle Cloud infrastructure can be installed not only on top of Oracle’s infrastructure but also in their customer’s own data center.  Over time, Oracle customers can move their applications from traditional custom and packaged on-premise applications (e.g. PeopleSoft, Siebel, Hyperion, etc) to Fusion SaaS applications and back and forth, whatever makes the most sense for their business.  We think that over time, customers are looking to simplify their IT infrastructures and probably won’t be creating complex hybrid environments.

SaaS Products

Oracle is investing $5 billion a year on R&D and more on in M&A to fuel their Cloud innovation, which is allowing them to continue to play a leadership role in the Software market.  Oracle now claims to have more SaaS applications than any other provider in the market including:

• Human Capital and Talent Management (Fusion and Taleo)
• Sales, Marketing and Customer Support (Fusion and RightNow)
• ERP, Financials and Procurement (Fusion)

Today they have hundreds of customers on their Fusion and acquired SaaS  products but next year they anticipate having thousands of customers running their new SaaS-based applications.  An interesting statistic that was shown is that of the Fusion applications currently deployed:

• 9% are On-Demand (Managed environment)
• 26% are on-premise and
• 65% are SaaS-based

The early SaaS Fusion customers included Brocade (Fusion Talent Management), Elizabeth Arden (Core HR and Fusion Talent Management), Graco (Oracle Marketing Cloud), Hitachi Data Systems (Oracle Talent Managment, Taleo), Key Energy Services (Fusion CRM), KLM (RightNow), Overstock.com (RightNow), Red Robin (Fusion ERP, SCM and HCM) and UBS (Fusion Core HR and Talent Management).

These are all large organizations that only have a few Oracle Cloud products today and given the broad portfolio of applications and services, there appears to be a large opportunity to upsell and cross-sell these customers their new, modern SaaS products.

Conclusion

Oracle is actively evolving their Cloud strategy.  Look for more services and products to be made available in their Cloud in the near future.

What Oracle really needs now is better marketing around their offerings, because it is now a giant Chinese menu of components and most SaaS buyers are looking to buy a meal, not all of the ingredients and then have to cook it themselves.

If Oracle could templatize their Cloud offerings and wrap them up with value added business process services, they would be filling a big gap in the market.  Currently, neither large SaaS players or Systems Integrators can currently help buyers to build a successful SaaS business or efficiently deploy a complex SaaS set of products.

This is in Oracle’s wheel house and could be the real silver lining in their Cloud strategy.

Other Items of Interest

Release: Oracle Unveils Expanded Oracle Cloud Services Portfolio

Video:  Larry Ellison OpenWorld Keynote

Videos:  Larry Ellison OpenWorld interviews with CNBC’s Maria Bartiromo – Part 1 , Part 2,  and Part 3.  Really good interviews and very informative.

Article: Oracle OpenWorld by the Numbers, Rachel King – ZDNet [Infographic]