SuccessFactors enjoys hypergrowth amid recession

Very few companies today are in hypergrowth. Even fewer of them are business-to-business companies. Not many of those are in software. And almost none of them are public companies.

It’s surprising then that San Mateo, California-based SuccessFactors has not had more ballyhoo about it. It’s less surprising that the eight-year-old employee performance management company operates in the software-as-a-service (SaaS) realm, one of the few bright spots in the technology sector today.

The firm grew revenues at 77 per cent year on year for its most recent quarter and insists that the low-capex characteristics of the on-demand model – where servers and upfront licences are not needed — mean that an economic downturn can actually work in its favour.

“As long as you’re a must-have application, you can show that you get the data in faster and show ROI faster so the CIO gets the kudos and becomes a hero,” said general manager Paul Albright when I met him yesterday in London.

Albright played down the SaaS effect but said waves of corporate governance rules and regulations will also drive the talent management category because firms can show they conducted full audits of staff performance and compensated them accordingly.

He also argued that firms will have to pay more than lip-service to their people.

“Your workforce is your most important and expensive [element],” he said, “but when you ask them, people always talk about their product first.”

Staff that are not appreciated will walk, even in a recession, he believes, and leaders will have to make bold decisions to counter a potential brain-drain.

“CIO 2.0 will be about who can get ahead of the rest,” he said. “Everyone is asking for so much more so you will have to decide which expenses you can get out and which ones you keep in.”