I heard via Enterprise Irregular Anshu Sharma that Lawson’s CEO Harry Debes has predicted the demise of SaaS in 2 years. So I sez to myself, “Self, this is really bad, you work for a SaaS company, you blog about SaaS, and you have a lot SaaS company stocks in your investment portfolio, and it’ll all be over with in 2 years.”
So, I figured I’d better go read more about Debes’ prediction. It seems the salient issue is one of profitability. Namely, SaaS doesn’t have any. Debes’ waxes eloquent about how Lawson dodged a bullet by not entering the SaaS market and this has made them so much more profitable.
So, I quick light up Yahoo!Finance and check it out. Lawson is selling $850M in revenue a year and their EBITDA is $97.54M. Yay! Hmmm. Better check Salesforce.com. It’s listed as $970M in revenue and $78.72M in EBITDA. Hey wait a minute Harry, you’re more profitable, but not a lot more profitable.
Well what do the analysts think? Looks like they’re predicting annual growth of 30% for Lawson and about 43% for Salesforce.
Well maybe this is all just a Salesforce aberration and other SaaS companies can’t match the numbers. What about my other favorite, Conquer? Back to Yahoo, and it looks like they’re selling $194M and their EBITDA is $42.72M. Wow! They make half as much EBITDA as Lawson on 1/4 the revenue? Who is the profitable one now?
What to make of it? Looks like Harry Debes may have gotten away from his handlers just long enough to announce a completely ridiculous prediction when he said the SaaS market would collapse in 2 years.
Vinnie Mirchandani says SaaS will survive because it’s what customers want. I couldn’t agree more having talked to customers after having given them a choice of the same product SaaS or On-premises.