In This Report

Trends in the software industry are pointing toward another eventful year in the growth of Software as a Service (SaaS). Announcements from Salesforce.com, Cisco (WebEx), NetSuite and many others have unveiled newly minted approaches to strengthening their current partner ecosystems with a move toward more robust platforms. SAP, Microsoft and Oracle have jumped into the fray too as their ability to keep pace via legacy on-premise software delivery and pricing has come into question and they woo best-in-class SaaS vendors to leverage their growing suite of development, operating and marketing tools and processes.

The growth of SaaS between 2004 and 2006 brought many vendor ecosystems to the forefront of discussions surrounding their potential to reinvent many sectors with on-demand solutions. The aim of alliances like Salesforce.com's AppExchange was to create a network effect by aligning vendors with complementary functionality to extend a broader solution rather than forcing Salesforce.com to build a proprietary end-to-end suite.

While "SaaS" ecosystems have served some basic marketing needs by building brand awareness and offering lead-sharing opportunities, most have failed to flourish into mutually beneficial partnerships. As emerging vendors realize the broader needs of their businesses, it is becoming apparent that to contain their development and support costs and spur growth, a platform approach and related partner program is needed.

This TripleTree publication is our ninth on SaaS. At a high level, it identifies over a dozen vendors who are positioning themselves as SaaS Platforms and highlights four components TripleTree has identified as a basic framework for their success. It concludes with a review of six differentiating functions for this framework and offers some considerations for CEOs who are deciding how best to align with a SaaS Platform. TripleTree's perspective is based on hundreds of discussions with SaaS business builders seeking M&A and growth capital alternatives, and scores of strategic briefings with global technology and business services firms seeking the next plateau of growth.