Earlier this year I had the opportunity to sit down with the Salesforce.com executive that opened the Atlanta office a number of years ago. After hearing that the Atlanta office was one of the most successful ones, I wanted to know the secret. What was the special sauce? Easy, he said.
The recession hit many years ago and all these mid-to-large companies in the Southeast were running Siebel Systems with annual license costs that were millions of dollars per year. Combine license costs with staff plus infrastructure and you get a serious line item in the budget. Now for the Salesforce.com pitch: cut your overall Siebel costs by 90% and move everything to the cloud. CFOs especially liked this message and Salesforce.com took off.
It’s been a number of years since the last recession and SaaS has grown tremendously. When the next recession hits, look for a new wave of SaaS products to run the same playbook and replace the expensive incumbents with a system that’s more modern, and much cheaper.
What else? What are some more thoughts on recessions and expensive software incumbents?
David Cummings on Startups 