Thought Leaders in Cloud Computing: Mike Toplisek, EVP, Product and Marketing, EarthLink (Part 2)

Sramana Mitra: Talk to me about some of the trends you are seeing.

Mike Toplisek: We started a little less than a year ago bringing some of these cloud computing and IT services to small and medium customers. The interest in the older flows and the funnels have validated the trend we believed to be there, which is that small businesses want to focus on what they do to compete in the marketplace. If they manufacture something, they want to focus on what they manufacture. If it’s a small chain of restaurants, they want to focus on their customers and their menu. Increasingly, it doesn’t make sense for them to invest in the often expensive and technical resources needed to manage servers and care for software programs. >>>

Asana Positioning Itself to Reach Ultimate Goal of $100 Billion in Revenue

A recent report by GIA projects the global cloud-based office productivity software market to be worth $16.56 billion by 2018. The researcher estimates that growth will be driven by increased adoption of these tools by small and medium businesses and Asia-Pacific markets. Menlo Park, California–based Asana was founded in 2008 by former Facebook employees Justin Rosenstein and Dustin Moskovitz. The company is becoming a strong contender in the market segment.

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Thought Leaders in Cloud Computing: Mike Toplisek, EVP, Product and Marketing, EarthLink (Part 1)

Although you don’t have to forget what you already know about EarthLink, you will have to adjust your thinking a bit. Today, EarthLink is an IT services, network, and communications provider that serves more than a million consumers, with more than 150,000 business customers spread throughout the United States. Cloud computing is the wave of the future, and the executives at EarthLink know that and they want to get their own share of that innovative, ever-changing pie.

Sramana Mitra: Hi, Mike. Let’s start with a bit of context about EarthLink and your activities in the cloud. >>>

Box Eyes IPO At Unrealistic Valuation

Within the cloud computing segment, enterprise content management (ECM) is a fast-growth industry. Gartner projects that the ECM market will grow at a compounded rate of 10.1% annually to more than $5.7 billion by 2014.  Another report by researcher The Radicati Group projects that by 2016, the market will be worth $7.5 billion. Big names in the market include IBM, Microsoft, and Oracle. But smaller players, such as California-based Box, are also making it big.

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Newly Public ServiceNow Performs Well

Following Facebook’s IPO debacle, the market has been somewhat wary of the listing of other IT companies. But recently listed SaaS enterprise IT service management player, ServiceNow, has put concerns to rest for its IPO. Of course, the SaaS IPOs are very different animals from the social media IPOs like Facebook. For one thing, subscription-based SaaS is one of the best, most predictable business models out there, whereas display advertising–based social media businesses tend to be highly volatile and unpredictable. I fully expect all the upcoming SaaS IPOs to have a relatively stable performance in the public market, whereas the display advertising based companies will struggle more. We must note that LinkedIn, a social media company, is largely based on a subscription business model and thus orders of magnitude more stable.

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Workday: IPO or Acquisition by Salesforce?

According to a Gartner report, global spending on the Software-as-a-Service (SAAS) market is projected to grow 17.9% this year to $14.5 billion. The market is projected to be worth $22.1 billion by the year 2015. The North American SaaS market is projected to grow from $7.8 billion last year to $9.1 billion this year, while Western Europe will grow from $2.7 billion to $3.2 billion. Within the segment, analysts believe that human capital management (HCM) is becoming an increasingly effective way for on-premise vendors to make further inroads with their clients. HCM players chiefly offer services for recruitment and learning and development and are close to human resources functions like payroll that are already handled by on-premises enterprise resource planning (ERP) systems.
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MindTree and Persistent Systems Represent New Wave of Indian IT Growth

The Indian IT body NASSCOM expects the IT services market in India to grow 11%-14% in 2012. Growth is projected to slow down from the previous year’s rate of 37%. The depreciating rupee has helped Indian outsourcers, which have been able to report higher earnings. But the industry continues to be plagued by the challenges of increasing labor costs, diminishing the benefits of labor cost arbitrage.

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CollabNet Eyeing IPO

According to Gartner, global spending on SaaS is projected to grow by 18% this year to $14.5 billion. Growth is projected to continue through 2015 when the SaaS market spend will grow to $22.1 billion. Mature markets of North America, Europe and Japan will see growth of more than 16% each. North America will remain the biggest bringing in $9.1 billion, followed by Western Europe’s $3.2 billion share. Japan is the smallest market segment with SaaS spending projected to grow to $495.2 million from $427 million. Emerging markets of APAC and LATAM will see continued adoption as SaaS spends grow more than 25% each to $934.1 million and $331.1 million respectively.
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