Subscription Models, Customer Choice, and Growth Opportunities in SPM

A few weeks ago I blogged about the merger between SaaS sales performance management (SPM) vendors Xactly and Centive. At the time, I was more interested that ANYONE was seeing some financial activity in what seemed like eternal doom and gloom on my finance-based Google alerts.

But the post actually garnered a lot of response, and spurred a lot of conversations both online and off. So I have started to take more of a deeper look at SPM, and have made some discoveries. A lot of these came after talking with Steve Apfelberg over at Callidus.

The main thing I learned from talking to the SPM companies out there, is that SPM is not a simple bolt-on to CRM. In a lot of ways, it is very different from CRM. So, I was definitely a little off the mark calling it a “nice to have” application.

Second, while different from CRM, SPM can make CRM deployments more successful. By empowering sales agents with greater visibility into their compensation, CRM adoption can go up, if the two are well-integrated. Also, a greater understanding of how sales (tracked in CRM) are being paid out (tracked in SPM) can enable companies to make better decision on where to spend resources, add personnel, etc.

Finally, I was happy to learn that Callidus is doing two things that I believe will benefit itself in the long run. One, it is truly looking to offer SaaS, and has made more headway than I originally thought. And what I really like about Callidus is that they are not simply “going SaaS” but instead moving to a subscription model while continuing to offer customers choice in deployment.

Yeah, it sounds a lot like the SugarCRM model – and this model has worked well for us. And I think it will work for Callidus. See, this company sells its software to big, and I mean REALLY big sales organizations. These highly complex sales teams are supported by equally (if not more) complex IT stacks, and for many of these, SaaS is not an option. So, with this shift, Callidus will see greater visibility and predictability with a recurring revenue stream, while also continue to serve multiple market sectors with multiple offerings.

Customer choice and flexibility – these are only good things to offer in my opinion…

But again, while there have been entrenched players like Callidus in the space, this is still a nascent market in my eyes. The combined Xactly/Centive entity will have some of the pie, but I like that customers will still have a choice of on-site SPM software as well.