One on One with John Girard of Clickability

John Girard founded Clickability [1] in 1999 and serves as the company CEO. Girard, who started the company in a garage with three fellow Stanford graduates, helped pioneer the concept of Software as a Service (SaaS) and has spoken at dozens of high-profile events including MINday, COMDEX, CMS Strategies, Gilbane, Seybold, ContentWorld, B2B World and FOLIO: Show. We asked him about the impact of SaaS on content management and how it compares to on-premises software.

FCM: I recently read, in the most recent AIIM State of ECM 2009 [2] report, that only 7 percent of respondents were using SaaS. Does this number surprise you?

JG: On the contrary, I’m surprised the number is that high. ECM has been a vertical in which SaaS has only gained real traction in the last 18 months or so. Additionally, ECM encompasses a number of components that are likely to stay behind the firewall for some time (records management and document management for example). We think that WCM (currently a part of ECM, but being “pulled out” of it by many analysts) delivered as a service is getting the most traction with enterprises right now.

FCM: I recently heard about a CEO at a large pharmaceutical company who suggested SaaS was good for small projects and isolated corporate installations, but not for a larger world-class enterprise setting. How do you respond to this?

JG: That’s what most high level executives said about Salesforce [3] just a few years ago, and now Salesforce and Clickability are doing substantial enterprise-wide deals with very large organizations. There is no reason inherent to SaaS that makes it better for small projects vs. large projects--it’s the sophistication of the SaaS solution itself that makes the difference. For instance, Clickability has two, fully redundant data centers, with a 5-minute failover (if one goes down, the other can take all customer traffic within 5-minutes)--that’s a disaster recovery solution that even the largest companies in the world have a hard time matching.

FCM: What do you see as the advantages of a SaaS for a big business versus a SMB? Is there any difference?

JG: Again, its largely dependent on the solution itself--the advantages of SaaS are not dependent on the size of the customer. Some solutions are built to solve SMB problems. Others are built to solve the problems of the enterprise. In our particular case, Clickability built a product to help solve very difficult web-publishing problems (publishing high volume/sophisticated websites, integrating tightly with behind the firewall solutions, etc). That makes us a great fit for the enterprise, and a great fit for SMB’s with complex web-publishing problems. In either case the advantages of SaaS are largely the same: Better TCO, faster time to value, more innovation and greater customer satisfaction.

FCM: When I was at AIIM recently all the talk was about ROI. Is there a difference in how companies approach ROI with SaaS v. an installed program?

JG: Yes. Companies with installed solutions tend to focus more EBIDTA (Earnings Before Interest, Depreciation, Taxes and Amortization), since there are large up-front costs associated with the installation that are amortized over the life of the solution. The problem is that those large up-front costs tend to recur about every three years (the average life of an installed WCM solution), so EBIDTA looks good two years out of three, and really, really bad the year of the install. In contrast, the costs of SaaS solutions are steady, predictable and lower as compared to installed solutions, so ROI is much easier to calculate: How much did my SaaS solution cost me this month, and how much revenue did it generate or costs did it save?

FCM: Discuss the differences between SaaS versus installed software. What are the advantages/disadvantages of this approach? Can it work for companies who are heavily regulated like financial services?

JG: The differences between the two are dramatic. As compared to installed software, SaaS solutions are generally less expensive, take much less time to implement, have much better uptime profiles, cost much less to maintain, and are updated much more frequently. That last point ends up being especially critical in a space like the one where Clickability operates. As a web content management vendor, the space we are helping our customers operate in is the web. The average installed vendor has a new release every 18 months, and takes 12 months to implement. That means if you’re really lucky, you launch with a solution that is 30 months old.

What’s changed in 30 months on the web? Everything. In comparison, Clickability has 7-8 major releases of the software every year, and when a customer launches (in 100 days or less), they are always launching on the most current version of the product and able to immediately take advantage of the newest, most interesting web technologies.

SaaS can absolutely work in heavily regulated industries. For example, we have financial services customers, such as Cantor Fitzgerald, that use Clickability. In many cases, SaaS businesses are able to offer solutions to heavily regulated industries (like data back-up, audit-trails, security or redundancy) that are too costly for the businesses in those spaces to do themselves. A SaaS business needs to only meet the rigorous standards once, and then can extend those benefits to any other customer in the space.