SAP bought its way into cloud computing with its $3.4 billion purchase of SuccessFactors last year. But SAP will still have a hard time making itself into a great cloud company, says a former SuccessFactors exec.That’s because running a cloud business is completely opposite to running a traditional enterprise software business.
Rob Bernshteyn, who says he was one of the first 15 employees of SuccessFactors, made his millions on its IPO. He worked for Siebel before that and is now CEO of a cloud startup called Coupa Software that is kicking butt with a service that helps companies purchase supplies.
He explains that traditional software companies are set up to sell products and then get out.
That’s the opposite of what they need to do for a software-as-a-service business. SaaS is a long-term thing. Customers pay a monthly subscription. At Coupa, salespeople get paid on a first-year subscription and then get a percentage of each year’s recurring revenue — so their incentive is to make sure customers are happy and stick around.
SAP and Oracle “are trying to get as much money out of the customer’s wallet as possible. I don’t want the money out of the customer’s wallet. I want them to get a lot of value so that they stay with me until perpetuity,” he says.
It’s going to be crazy hard for SuccessFactors to fit into SAP’s insane, short-term sales culture. Remember SAP is so focused on short-term product sales, that it kicked out its North American president, Robert Courteau last month for missing a single quarterly sales target. SAP sales people are ticking off their enterprise customers by constantly trying to squeeze more dollars from them, sources have previously told us.
What SuccessFactors needs to survive is not what SAP is focused on doing.
UPDATE: SAP PR contacted us to note that Robert Courteau officially resigned and was not fired.
ANOTHER UPDATE: SAP PR also went to the trouble of researching Bernshteyn employment dates with SuccessFactors and sending us a statement about them. A SAP spokesperson claims that his official start date was June 8, 2004, which would make him the 43 person on the payroll at that time.
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