Friday, July 18, 2008
Appirio backed by Sequoia Capital: What changes, what doesn’t.
Chris Barbin
In our first blog post as a Sequoia-backed company (news leaked today, press release coming Monday), we thought we’d answer a question we’ve been asking ourselves: What changes about Appirio? What doesn’t?
We have more to say about what doesn’t change than about what does. Sequoia’s backing is an endorsement of some unconventional core beliefs that we’ve been talking about (and blogging about) for months-- convictions about our market's potential, our business model, and our value proposition that absolutely won't change as a result of this announcement. What will change, however, is what you can expect from Appirio: more partners, more products, more talent, and of course more customer success.
What doesn’t change: Day-to-day life here at Appirio won’t change much. We continue to be focused on making our customers successful, developing innovative product and service offerings, forming deeper relationships with our partners, and finding and empowering great people. But we’re doing these things with new external validation about some of the core beliefs that make Appirio unique:
- Web platforms will enable the creation of important companies. Sequoia thinks big-- they measure success by the % of NASDAQ’s total market cap represented by Sequoia backed companies. We’ve blogged before about why we think web platforms have the potential to disrupt $1 trillion of IT spending—it’s great to have Sequoia’s endorsement of this vision.
- Products and services are complementary when powered by web platforms. Conventional wisdom holds that technology companies need to choose whether they are going to focus on products or services, and that VCs won’t invest in businesses that think professional services are important. We believe that this was true with on-premise software, but that the availability of web platforms makes a truly hybrid business model not only possible, but advantageous in successfully turning innovation into customer success, and customer success into further innovation.
- Focus on customer success matters. Appirio doesn’t have the portfolio of complex patents or the single product “big idea” that venture capitalists typically look for. What we do have is an unique approach and an outstanding team dedicated to making customers successful and driving product innovation in the rapidly growing market for on-demand solutions. This is what Sequoia found unique, and the core of what they are investing in.
What will change: So while it is mostly business as usual here at Appirio, you will notice a couple of changes in how we talk about and grow our business—Sequoia’s backing has empowered us to "think even bigger" about Appirio. While we’ll have a lot more to say about each of these topics over the next couple of months, we wanted to provide some hints of what new to expect from Appirio:
- More Partners: To date Appirio has been very focused on our partnership with Google and Salesforce, and we continue to believe that these two companies offer the most compelling web platforms on the market. But there’s much more to cloud computing than web platforms, and we’re excited to be exploring application and technology partnerships with some of the most innovative and successful companies in these parts of our industry. Stay tuned for more announcements in this area.
- More Products: Appirio’s product portfolio has been tremendously successful to date at introducing companies of all sizes to us and the potential to “connect the cloud.” We want to lower the barriers to trying these solutions, broaden the available market for their deployment, and use them to introduce even more companies to Appirio. At the same time, we’re enhancing our offerings to solve pain points we see at our customers every day, building the type of enterprise-class solutions around which we hope to build a big business.
- More Talent: Appirio has been successful thanks to a team willing to do things well outside their job description to get the job done. Now we’re looking to bring in some outstanding people to focus on what’s going to take our business to the next level: engineers looking to do amazing things with Google and Salesforce, consultants willing to do what it takes to make a customer successful, customer advocates looking to build community around our solutions, and marketing gurus with innovative ideas for how to get the word out about Appirio virally.
Labels: BusinessModels, PaaS, Software as a Service
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posted by Appirio at 10:16 AM Permalink »
9 Comments:
Congrats all at Appirio!
Gratz! I admire the Google Apps/SFDC integration done to date. Keep up the great work.
I've been in IT for 50 years and I've watched acronyms come and go. "Cloud" computing is simply another "nonspecific," vague burp used by software developers to generate new excuses to sell rehashed old products as new and, in the process, convince companies to buy software they already have.
Nothing more. We're just moving the deck chairs once again and playing the "greater fool" game.
Hi Chris, congrats on the endorsement-validation from Sequoia! Exciting times indeed. I read that Appirio had raised some money just recently. I guess the additional funds certainly won't hurt, and would certainly help Appirio weather any bumps in the road in today's less than stellar economic conditions.
I do have a question, I hope you don't mind me asking -- and hopefully I don't embarrass myself too badly if this comes across as a "duh, obvious" type.
What is it about web platforms that makes products and services complementary?
I'm guessing that professional services aren't as attractive to some VCs because "scaling" up human capital is difficult, and human capital is not cheap, whose "cost" is difficult to drive down.
Or put another way, what is it about the whole Web 2.0/PaaS/SaaS phenomenon today that makes hybrid models possible, that Web 1.0 did failed to do?
@bob In technology, as you should know .. it's an innovate-or-die game. Best of luck in surviving this: http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9110329
Jay,
Thanks for the comment - a great question actually. The power of the model comes from a combination of web platforms AND the stage/state of the SaaS market. While players like SFDC have been around 9+ years, the market is still very early with less than 6% penetration in overall enterprise software. This creates tremendous 'white space' for product opportunities that are easily identified as part of the large enterprise deployments that firms like Appirio are involved in. SaaS platforms allow us the opportunity to quickly develop and innovate and provide the vehicle for immediate distribution to millions of users without the baggage of versions, compatibility issues, etc. In short, cost and time to develop and deploy products is orders of magnitude faster. The true secret sauce in the end however, is having the organizational discipline to run a customer centric, profitable and scalable services business, while 'incubating' a complimentary portfolio of products with a dedicated product team. The model still requires focus and solid execution, and those firms that pay lip service to products and put arms and legs of underutilized consultants on products will fail. Happy to chat live on it if you are interested - feel free to drop me an email.
This is not a blog, more a product sheet
Hi Chris, yes I'd love to chat live with you.
Is your email chris |at| appirio? I'll send you an email.
Best,
Jay
Hey nice one. i think for any business, Business Service scheduling software is very important to keep the track of the employees in the company.
Congratulations! nice job. Business can benefit from this appointment scheduling software
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