On The Way To 100 Million Dollars In SaaS Revenue: Vocus CEO Rick Rudman (Part 5)

SM: What does a corporate department pay to use your service?

RR: It depends on size. For the mid-market, meaning companies ranging from $5 million to $500 million in revenue, on average pay us $9,000 to $10,000 per year in annual subscriptions. The range can start as low as $3,000 per year and it could go up to $50,000 per year.

In the larger market, companies earning over $500 million annually in revenues, we receive $40,000 to $50,000 per year in revenue. It can start as little as $15,000 to $20,000 and can go as high as $300,000 to $400,000.

Small businesses account for 20% of our revenue. These are companies who make less than $5 million per year in revenue. There we sell individual press releases and lower end subscriptions where you can buy a single transaction for as little as $80, or they can purchase a subscription for as little as $2,000. It is similar to what you might see from Salesforce.com. We have different packaging, pricing, and feature sets to meet the needs and budgets of small businesses, mid-sized companies, or very large enterprises.

SM: You now have 4,000 customers, and the competitive landscape does not appear threatening or incredibly complex. What do you see happening next?

RR: We think that in the United States there is a $6 billion TAM. Our growth strategy has four elements. We will continue to grow the direct sales organization. We will continue to penetrate this small business market that we have been going after.

We also believe international opportunities are fairly large. Today 10% of our revenue comes from international companies, primarily ones out of the UK. We have recently expanded into Germany and have plans to go into France and China. In the future we expect international to represent up to one-third of our business.

Finally, we have opportunities in acquisition. Most of what we have done to date is organic. We do have $100 million in the bank and we are profitable. We think there is an opportunity to acquire the smaller players in the industry.

Given the product suite we have today we think we just need to continue to execute. As the economy returns to normal we foresee annual top line growth of 20% for the foreseeable future. We will become a multi-hundred million dollar and larger software company.

SM: How large is your inside sales force now and how much does it need to increase? If the TAM is $6 billion and you are only at $100 million now you could conceivably grow that much faster.

RR: We could. There are two factors which are governors on our growth. One is that we are still selling into an industry that is still educating itself on automation software. There is an education process that has been going on in this market. It is not like the ERP or CRM market where everyone knows what it is and why they need to use it. When we walk in, we are often educating our customers that there is an integrated solution like ours available.

This segment is part 5 in the series : On The Way To 100 Million Dollars In SaaS Revenue: Vocus CEO Rick Rudman
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