The SaaS business is a little bit different than traditional enterprise software models. The traditional model, perhaps best typified by vendors like Oracle, sees high-priced salespeople out on the road trying to screw down customers every time annual licensing time comes around. The SaaS model is much lighter touch and it is interesting to see new SaaS companies pick up veterans in the space.
A good example of this comes today from Code42. Code42 is a security company that is focused on ensuring data remains safe, no matter whether it is at home, within the four walls of a business, or any point in between. The rise of cloud solutions, the burgeoning number of remote workers, and the huge uptake of BYOD and mobile devices has meant that the challenges around securing data have become more complex.
Quite simply, traditional security products lack the flexibility to resolve the new set of problems that organizations face, and into this void come a number of new companies. Code42 is one of these companies. Headquartered in Minneapolis and backed by Accel Partners and Split Rock Partners, the company has snagged some high-profile customers, including Expedia, Proctor & Gamble, and Harvard.
Given this positive growth, it is interesting to see the company strive for even greater success by hiring the previous chairman and CEO of Eloqua. While in a very different space, Eloqua, the company that grew from $11 million to $125 million in revenue during his tenure prior to its sale to Oracle, gave Joe Payne a great grasp of what matters with a SaaS business.
Metrics like LTV (lifetime value), CAC (customer acquisition cost) and churn are of critical importance to a SaaS business. Given a $75 billion market opportunity in the IT security world, but massive competition from a plethora of companies, both early stage and more mature, Payne will have to use that experience to great effect at Code42. Despite different industry sectors, Payne sees parallels between the two:
There are a number of significant parallels to Code42 today and Eloqua when it was a pre-IPO company. Both companies are in fast-growing, evolving markets. Both companies had established footprints with a few key enterprise customers. And, both companies have hard-working, young workforces that are committed to serving customers in order to win their respective markets. I’m looking forward to leading this team on what could be an awesome journey.
That's not to say that Code42 haven't been doing well already. In 2014, Code42 added more than 200 enterprise (1000+ employees) customers. And as for those all-important metrics, Code42 is shining there as well - the company boasts a 97% customer satisfaction rate, 98% customer retention rate, and 68 Net Promoter Score (NPS). It has a reported 37,000 business customers and has been given praise by analyst firms covering the space.
"It's an exciting time to join Code42 amid impressive corporate growth and global, enterprise customer traction, all of which is rooted in solid underpinnings: an exceptional product offering and a proven customer-first approach," said Payne. "I look forward to partnering with the Code42 team during this next stage of growth, fueled by the tremendous opportunity in the endpoint data protection and security market."
Prior to Eloqua, Payne held executive positions at iDefense, e-Security, eGrail, MicroStrategy and InteliData. Currently, he serves on the Board of Directors for public companies Cornerstone OnDemand and Dealertrack, and private companies Plex Systems and TrackMaven—as well as the advisory boards of Montigo and Luminal. He also serves on the board of the non-profit organization First Focus Campaign for Children.
Apart from the obvious benefits in terms of focus and experience, this appointment marks increasing credibility for Code42. Leaders like Payne don't jump into a new company without significant due diligence. His anointing of the company is a good sign for its future potential.
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