PaaS: SaaS Companies, You Have an Unprecedented Opportunity

The current market is full of really interesting SaaS companies that have built up at least $100M in annual revenue run rate (ARR). Some have gone public. Some are waiting in the wings. There are also many more that are in the $50M to $100M ARR range.

They serve different segments. Some serve verticals. Some horizontal enterprise functions. Some large niches. Some enterprises. Some mid-market. Some SME.

Together, the SaaS market is a healthy, robust, exciting cauldron of innovation.

Unlike Social Media, Search or e-Commerce, SaaS is not an oligopoly. [ref: An Oligopoly, After All This?]

And these SaaS companies that have achieved critical mass in their own segments now have an unprecedented opportunity of scaling to become much larger businesses by broadening their footprints.

They can look within, and look outside to identify the growth levers.

Let me explain.

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224th 1Mby1M Entrepreneurship Podcast With Maxwell Wessel, SAP.IO, on Corporate Innovation

Maxwell Wessel, General Manager of SAP.IO, talks about SAP’s Corporate Incubation strategy.

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Corporate Innovation: Tyranny of the TAM is Less Severe

What are the Biggest Challenges Facing Innovation Managers at Enterprises?

Must-Read Posts on Corporate Innovation

Anyone involved in a corporate innovation program soon learns that it is quite complex to manage the nuances of such programs and get them to work right.

Last year I spent half a day with approximately 40 Fortune 500 Chief Innovation Officers at Xerox PARC, and discussed our experience with corporate innovation methodology through the1M/1M Incubator In A Box program. A few months later, Jim Euchner, the CIO of Goodyear, interviewed me for the Research-Technology Management journal.
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Corporate Innovation Management: Lessons Learned

Last summer I spent half a day with approximately 40 Fortune 500 Chief Innovation Officers at Xerox PARC, and discussed our experience with corporate innovation methodology through the1M/1M Incubator In A Box program.

A few months later, Jim Euchner, the CIO of Goodyear, interviewed me for the Research-Technology Management journal and I summarized some key excerpts from the discussion here: Corporate Innovation Management: A Methodology Discussion
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Building a Fat Startup in Corporate Training: Karl Mehta, CEO of EdCast (Part 3)

Sramana Mitra: There’s a lot of room for fraud.

Karl Mehta: We solved a lot of problems in the payment and transaction space that had never been solved. We didn’t start out to solve the problem. We just wanted to provide a simple service. We built anti-fraud technologies. We built multi-account technologies. The most important things that we built was the micro-transaction capability because you could not do a transaction less than a dollar because credit card charges you at least 2.8% and 30 cents.

PayPal has the same rate. Even now, it’s difficult to do a one-dollar transaction. We figured out that by doing a prepaid aggregation we could support a transaction for as little as 10 cents. That whole technology grew and became very big. We were the underlying monetizing platform when Facebook launched Facebook Credits. >>>

Corporate Innovation Management: Organizational Challenges

Continuing with our discussion on corporate innovation methodology, in this piece, I want to highlight a couple of key organizational challenges: (1) How do ideas flow into execution, (2) Where are the push backs?

Let me call out another specific point from my previous article, Corporate Innovation Management – A Methodology Discussion, that addresses the first issue.

In my interview with Jim Euchner for the Research-Technology Management journal, I said:

JE: Are these same people, if it’s a go, charged with trying to make it work?

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