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ØQ&A
HOW TO SURVIVE AND THRIVE
IN THE NEW SOFTWARE
INDUSTRY
Presented by
Laura Sachar
7
Investing in Technology - Enabled Business Services
Companies for over a Decade
•Software - as - a - Service
8
Select Leading Investments
Led Dec ’09 Series B round; First on-demand, application security solution
invitation-only online sample sale that provides automated application security
shopping community testing through SaaS delivery model.
9
Demand for
SaaS is
Increasing
POSITIVE SAAS
TRENDS
Market Growth Forecast
PUBLIC SAAS
COMPANIES
Pure - Play Public SaaS Companies
EV / TTM Revenue
0
01
/2
21
5/
Source: CapitalIQ
Note: Pure-Play SaaS Companies tracked through 5/21/10 and include
ATHN, CNQR, CRM, CTCT, DMAN, KEYN, KNXA, LPSN, N, RNOW, SFSF, SLRY,
TLEO, ULTI, VOCS
14
Pure - Play Public SaaS Companies
SaaS Public Comparable Metrics
STARVEST SAAS
EXPERIENCE
SaaS Investment Metrics
Key Metrics
Ø
Revenue Periods : $1 - 5M ; $5 - 15M ;
$15 - 30M
ØRevenue Growth
ØCapital Efficiency
ØGross Profitability
ØSales & Marketing as % of
Revenues
ØResearch & Development as %
of Revenues
ØCapital Expenditures as % of
Revenues
18
SaaS Investment Metrics
Public Comparables (AVG)
19
SaaS Investment Metrics
Other Key Metrics
Other Key Metrics
TOUCH DOWN
SaaS Exit Opportunities
Public Multiples
Me
di
an
En
te
rp
ri
se
Va
lu
e/
Re
ve
nu
e
22
SaaS Exit Opportunities
Software M&A Multiples by Product
24
Aligning Sales, Finance, and Service
For the New Software Economy
Paul Turner
© NetSuite 2010
NetSuite: Quick Take
Background Performance
Founded 1998 6,600+ customers, 750+ software
Publicly traded on NYSE: “N” companies
5 Star Rating
“
A software industry shift
toward subscription models
will result in a nearly $7 billion
decline in worldwide license
”
revenue in 2010
30
But Subscription Comes in Multiple Forms
+ Your +
Support Quote/Order
Software
Co
+ +
Usage & Ongoing Client Management
+ Recurring Billing & Revenue Recog
Services Invoice/Rev. Mgmt.
Hard to Achieve When You’re Running This…….
evenue Amortization
Deferred Revenue
Upsell
Renewals
% of Completion Rev Rec Renewals
Forecasting
Rev Rec
Future Billings
Collections
Commissions
Mgt Reports
Prepaids Amortization
Allocations
Positioning Sales for Renewals Success
Recurring GAAP
Profitability
Reference Level
Vertical
And more
Used cross-company to prioritize
activities
Issue/enhancement requests,
support queues, renewal comp etc.
Visibility across the company via
Dashboards
View into Up-sell vs. Down-sell
- and Comp Structures to Drive Behavior
Big Ideas
Managing Up-sell vs. Down-sell
Sales Management: Key Takeaways
4.
Positioning Finance for Success
Up-sell #1 Up-sell #1
Up-sell #2 Up-sell #2
Flexible Billing is Required To Avoid
Spreadsheet Hell
One time invoice from order Milestone billing
On-premise software product Implementation project work
Training materials, user
manuals
Time and materials
Fixed bid implementation
Implementation project work
Subscription
Usage-based billing
Maintenance
Pay per call customer support
Support
Subscription
Finance: Key Takeaways
Forecasting
Rev Rec
Future Billings
Collections
Commissions
Mgt Reports
Prepaids Amortization
Allocations
NetSuite Provides a Cloud Single
Business Suite for Software Co’s
Customers
CEO CFO
Vendors
Partners
Drive Recurring Revenue Management Globally
LOCAL GLOBAL
Currency Consolidation
Quota Sales
Forecast Revenue
Orders Dashboards
NetSuite SINGLE NetSuite
Taxation
ECOMMERCE DATA Currency
CRM+
SOURCE Management
Partners
Compliance
Language NetSuite
FINANCIALS Control
Website
Many Websites
Up to
50%
Lower TCO
46
Delivers Hard Benefits to
Software Companies
Improvement area Business Result Company
Dedicated PS team
52
Best Practices
© NetSuite 2010 53
Resources
Upcoming Event Available Whitepaper
54
Q&A
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