The Software-as-a-Service (SaaS) industry has matured in the last 3 years, and many compelling companies have emerged, showing strong growth, clean execution, and robust customer adoption. Amidst the financial crisis, it is also important to note that the industry is likely much more recession-proof than most others. I dedicated two of my Forbes columns to the issue: A Recession-free Corner of the Tech Sector and SaaS-ing Back At The Economy. In this installment of the Deal Radar, we look at a SaaS company, Pivotlink.
PivotLink was started with the aim of giving enterprises of all sizes the ability to mine and slice data so they can maximize their resources and increase profitability. This business intelligence (BI) solution allows users to access data in real time, at the speed of business, so better business decisions can be made.
PivotLink’s disruptive analytics technology is the key to delivering tools that are better, faster, and cheaper. Users are able to customize reports immediately when required, without involving IT, making it easier for all employees to make quick decisions in real business time. The solution is offered as a true SaaS model as it provides a platform that integrates data from various sources, optimizes the data for reporting and analytics, and then works with any web browser to deliver information for use by all employees in an organization.
PivotLink was originally started as SeaTab in 1998 by Ching Wan, who is now the CTO. It was renamed PivotLink in January 2008. Before founding PivotLink, Ching was a senior technical architect at Cambridge Technology Partners. PivotLink is headquartered in Seattle, Washington. The CEO, Quentin Gallivan, has over 20 years of experience in the technology industry. He started at VeriSign at a very early stage and helped build the company up to $1.5 billion in revenue. Next he moved to Postini as CEO, which he helped to build and later sell to Google for $625 million.
The company has raised $15 million in total. In February 2007, they raised $3.5 million from Trident Capital and private investors. In October 2007, the company raised another $9 million in a Series B round led by Emergence Capital and Trident Capital.
PivotLink works on a pure ‘pay for use’ pricing model and a monthly service structure. The average monthly subscription is approximately $3,500. Revenues are under $10 million. The number of customers has doubled from 50 last year to 100 currently; customers include REI, Car Toys, Bartell Drugs and North Face, among others. With the implementation of PivotLink, REI, an outdoor retail co-op, has increased sales by 9% and profit by 1.6%. Zones, a reseller of branded IT products, has a return on investment of over 1000% and a 50% increase in sales productivity since implementing PivotLink. PivotLink claims that it can be set up in less than 24 hours and requires only half an hour of training.
Several recent acquisitions (Oracle/Hyperion, SAP/Business Objects and Outlooksoft, IBM/Cognos), have changed the competitive landscape in the BI industry. Companies like PivotLink are at a huge advantage since they provide solutions that require no major upfront investment, are easy to roll out, and can be deployed quickly. As Quentin says, “PivotLink with lead the transformation of the $6 billion Business Intelligence market to the next generation SaaS model.” Perhaps. But Lucidera, another SaaS BI company is right around the corner as well.
There is one emerging trend that I want to mention in conclusion. I believe, SaaS-enabled Business Process Outsourcing (BPO) is where much of the outsourcing industry will be going. Business Intelligence happens to be a business function that always lacks in expertise inside enterprises, and is a likely function that would go this route. For more on this topic, check out Deconstructing The Cloud.
This segment is a part in the series : Deal Radar 2008