Steve Singh, CEO of travel and expense management vendor Concur, spoke to a handful of attendees at an early-morning breakfast session at SaaScon today. It wasn't an ideal forum — he would have been better pleased with the opening keynote slot, which Salesforce.com president Jim Steele filled an hour later. But having to fly in the shadow of Salesforce.com's larger presence is an experience familiar to many leading SaaS vendors, and one that Singh has had many years to get used to.
If the world were a fairer place, the roles might well have been reversed. Concur isn't the same size as Salesforce.com, but in the past two years it's been growing at close to the same rate, and with trailing twelve month revenues coming up to the $100 million mark, Concur isn't a minnow.
In several ways, Concur is a better poster child for the SaaS movement even than Salesforce.com. It has probably the largest single enterprise implementation of an on-demand application — 180,000 users at a single US financial institution — as well as serving small businesses, such as the Los Angeles Philharmonic, with as few as 20 users. It is a superb demonstration of providing shared-service access to third-party back-end resources such as airline and travel reservation systems and credit card processing systems — a characteristic I've often highlighted as one of the hidden benefits of the on-demand model. According to Singh, Concur's back-end ecosystem is bigger even than the supplier network that connects into the American Express travel service. But perhaps more impressive than all of that, Concur has become a leading on-demand SaaS vendor from what is still today an unusual starting point — it began as a conventional licensed software vendor.
"Don't do it as a public company," Singh recommends, having had to weather a difficult revenue model transition while defending quarterly numbers to a sceptical Wall St. But those days are long past, and after acquiring on-demand travel management vendor Outtask a year-and-a-half ago, revenues and margins have both soared. Indeed, when I met him last week at Concur's offices in Seattle, Singh pointed out that Concur is the second most profitable listed SaaS vendor after WebEx — and thus in line to become the most profitable once Cisco's acquisition of WebEx closes.
With such a background, I wondered whether Concur nails its colors as firmly to the mast as Salesforce.com when it comes to matters such multitenant architecture and browser-based delivery. Singh was adamant.
"You can't get there without multitasking. It's fundamental to your business model," he told me. "The greatest value is driving the cost structure down to the level where it's affordable to every size of customer ... Without multi-tenancy you can't get the leverage to drive profitability." The browser model was equally important in order to reach the maximum number of users within an organization, he added. "Once you go to the browser, you can hit any person in the company."
So why doesn't Concur get noticed the same way that Salesforce.com grabs attention? Although he doesn't deny more than a tinge of envy and admiration for the showmanship of Salesforce.com's CEO Marc Benioff, Singh says that it's a matter of preferring to emphasize execution over vision. "Are we doing what we said? Are we solving a business problem for our customers? That's the only validation we should care about."
That doesn't mean that Singh isn't ambitious for Concur, nonetheless. The business is growing fast, in part as a result of the Outtask acquisition, which in the first year resulted in 200 cross-sold deals (where customers of either travel management or expense management went on to buy the second application). Singh sees bigger opportunities ahead:
"This is a multi-billion dollar opportunity over a period of time." he told me. "Travel and expense is a beachhead for us," not into completely different application necessarily, but simply expanding into complementary areas such as spend analytics and e-receipts.
So even though few people may have realized Concur is a leading light of the SaaS sector, it's a company worth watching and maybe one that we'll be hearing more of in the future.