Dreamforce 2014

This week is the annual Super Bowl of Software-as-a-Service (SaaS) with the Dreamforce 2014 event in San Francisco. It’s the biggest event of its kind and draws 100,000+ people from all over the world. While I’m not attending this year, I’ve been many times in the past. Here are some thoughts from previous years: Ambitious…

One SaaS Application of Record Per Job Function

Software-as-a-Service (SaaS) is entering its third phase of maturity. Phase one focused on enterprise applications that became platform products like Salesforce.com, NetSuite, and others. Phase two was about general point solutions, mostly for the small-to-medium sized business market like Pardot, Mailchimp, and Zendesk. Phase three is new vertical-specific SaaS applications as well as more specialized solutions…

SaaS and Barriers to Entry

Earlier today Zaid Farooqui tweeted that some of his hedge fund friends think Software-as-a-Service (SaaS) companies are over-valued due to low barriers to entry: My hedge fund friend believes all public SaaS companies are grossly overvalued since they have 100s of competitor, little barrier to entry. — Zaid Farooqui (@zaid) September 7, 2014 While I…

Gross Margin and SaaS

One important aspect of Software-as-a-Service (SaaS) that isn’t well understood to first-time entrepreneurs is the role gross margin plays into the business. Gross margin is defined as the percent of revenue left over after the cost of servicing that revenue is taken into account (see SaaS cost of goods sold). For example, with a SaaS…