Building an Ambitious SaaS Company: Taleo CEO Michael Gregoire (Part 9)

SM: What is your business model? What is the pricing model? MG: The pricing model in the enterprise space, for companies with more than 3,000 employees, is that we charge by the number of employees in the company. It is not a transactional pricing system. We use multi-year contracts; most of them are three years in duration. In the smaller business space it is dead simple. You buy it over the web, $99 per month per user.

SM: It is not a function of employees? MG: No. In the enterprise space we are touching the CFOs and they hate to buy per-seat licenses. Coupled with that, it is really difficult to define what a user is in our space. With the pricing we do, we can pull a 10K/10Q and find out how many employees there are and it makes it very simple.

SM: What is the breakdown between your Enterprise and SME business? MG: If you break it down by customers, SMEs dwarf the enterprise customers. If you break it down by revenue it is the complete opposite. We have 37 of the fortune 100 and a total of 323 in the enterprise. In the SMB space, we have 1200.

SM: Is there any vertical where you are seeing stronger adoption? Right now SaaS is a lot better adopted in general than it was a few years ago. MG: The only space we see a real difference is between North America and International. In the second half of 2007, we started to see a pretty strong adoption outside the US with respect of SaaS. No vertical nuance as such, otherwise.

SM: You said earlier that your big finance vertical push at EDS was very successful. There is no vertical bias at all here? MG: If you take a look at SaaS in general, the SaaS companies which have been successful are Concur, Salesforce.com, etc. They all went after a horizontal application.

There really is not that much difference between energy, healthcare, etc, in respect to recruiting and performance management. That was similar with SalesForce.com and Concur as well. The companies that have been successful have picked a large market with a wide horizontal application. As the market matures there are some nuances to keep in mind such as in retail and government.

This segment is part 9 in the series : Building an Ambitious SaaS Company: Taleo CEO Michael Gregoire
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