China's paying accounts rose 30.9% quarter on quarter to 77,000 in the management-type software-as-a-service (SaaS) market in the third quarter of 2009, according to a data report released lately by Analysys International.
Of the total paying accounts, 21,800 or 28.2% were from www.Youshang.com, an e-commerce platform under Kingdee International Software Group Co., Ltd. (SEHK: 0268). Youshang.com ranked first in the SaaS market in the quarter.
The followers were www.wecoo.com and www.eabax.com. And next came www.800app.com, Xtools, and www.mainone.com, with a less than 10% market share, separately. In particular, Salesforce.com only captured a 1.7% slice.
Besides, the nation's management-type SaaS market is predicted to grow rapidly in the near future, and it will hit CNY 720 million by 2011, with a 76.27% compound annual growth rate, said Analysys International.
Now, some Chinese small- and medium-sized companies have begun accepting SaaS, so, we should be optimistic about the future, said an Analysys International analyst.
A case study in profits and job losses
STEPHEN PAGLIUCA'S run for the Senate seat left vacant by the death of Senator Edward M. Kennedy has stirred up memories of the bitter 1994 challenge for the seat by Mitt Romney. When polls showed Romney edging ahead on the basis of his business experience, Kennedy's media consultant, Tad Devine, went to film angry workers at Ampad, one of the companies that had been fleeced bare by Bain Capital, a private equity firm that Romney owned. Was Kennedy just playing rough and tumble politics as Pagliuca has alleged, or did he have a valid point to make about Romney's type of business experience? And does that point apply to Pagliuca as well?
Private equity firms buy companies under an unusual arrangement - they force the companies to take on huge debt obligations to finance, in essence, their own purchases. The buyout kings then pay themselves huge fees for running these companies, well before it is determined whether they ran them well or into the ground. A Davos study shows that once in control, private equity firms cut more jobs than competitors. And according to a University of Chicago study for the years 1980 to 2001, investors in private equity firms also lose, receiving returns that fell short of the broad market averages.
Consider the private equity buyout that took place under the direction of Bain Capital and Stephen Pagliuca - that of Dade Behring, an Illinois lab equipment manufacturing firm that was bought by Bain and was ultimately left with about $450 million in debt. What happened after its purchase?
While lab-equipment manufacturers typically allocate 10-to-15 percent of sales to research and development, under Bain, Dade spent nearly half, 6 to 7 percent - $61.7 million in 1997 and $88.2 million in 1998. The anemic R&D spending fit the pattern of recent private-equity excesses - first because Dade Behring needed money to pay off the debt Bain had loaded it down with, and second, because Bain lacked the proper incentives to build a company it planned to exit within five years.
Like clockwork, nearly five years after its initial investment, Bain was practicing its exit dance, changing the employee benefits package for many workers from a defined-benefit pension plan, in which employees were entitled to about 75 percent of the average of their combined salary in their last three working years, to a cash-balance plan, saving the company perhaps $10 million to $40 million from the conversion. The same month Dade used the projections of that very savings as part of the basis to borrow $421 million, $365 million of which it turned around and used to buy back some of Bain and co-investor Goldman Sachs Capital Partners' shares.
The Standard & Poor's rating agency believed the company with the added debt would be unable to pay its interest if it faced adverse business conditions.
With added debt, new areas had to be cut. Dade's Miami office, which had 850 employees in 1999, consolidated operations with a similar division in Germany. Pagliuca told the Globe that job cuts were necessary to improve Dade's performance. But by then it didn't matter how many divisions were consolidated or workers fired. Nothing could save the company from its crushing debt load. Finally, the decline in the value of the euro, which Dade was too cash-strapped to hedge against, caused the company to collapse. It filed for bankruptcy in August 2002.
Dade's creditors took over the business, and Bain lost all its shares. But, Bain and Goldman - after putting down only $85 million to buy Dade and receiving the $365 million distribution, made out like bandits - a $280 million profit. Later, the Globe reported, creditors alleging these gains were "illegal dividends'' got the private equity firms and other entities to pay them back $68 million of the $365 million.
Did this company have to be treated this way? Was it making a bad product? Was it at the end of its productivity? After the bankruptcy, creditors agreed to cut the company's debt by more than half in exchange for company shares. They saw that if Dade focused on growth and not on juggling its debt load, it had the potential to be a strong business. Dade began pumping money into R&D - more than 8 percent of revenue in 2003, 2004, and 2005. By 2006, Dade's sales had risen 40 percent. The next year, Siemens bought the company for $6.7 billion, five times more than its value at the time of the bankruptcy.
Pagliuca said recently that the Kennedy ads showing the bitterness of laid-off workers were unfair because they distorted the entirety of Romney's body of work. An examination of Bain's record, and Pagliuca has been a key member of Bain since its early days, shows that Bain made big profits out of six formerly healthy companies it helped drive into bankruptcy (Stage Stores, Ampad, GS Technologies, Details, KB Toys, and Dade). During the credit boom from 2005 to 2007, Bain bought 22 businesses. Moody's Credit Rating Service in November said 10 of those companies, including Clear Channel Communications and Guitar Center, are either distressed or in default, 45 percent of the total.
I am not a resident of Massachusetts and take no side in this campaign. But I agree with Pagliuca that the entirety of a man's work be available to voters before they throw the lever.
Private equity firms buy companies under an unusual arrangement - they force the companies to take on huge debt obligations to finance, in essence, their own purchases. The buyout kings then pay themselves huge fees for running these companies, well before it is determined whether they ran them well or into the ground. A Davos study shows that once in control, private equity firms cut more jobs than competitors. And according to a University of Chicago study for the years 1980 to 2001, investors in private equity firms also lose, receiving returns that fell short of the broad market averages.
Consider the private equity buyout that took place under the direction of Bain Capital and Stephen Pagliuca - that of Dade Behring, an Illinois lab equipment manufacturing firm that was bought by Bain and was ultimately left with about $450 million in debt. What happened after its purchase?
While lab-equipment manufacturers typically allocate 10-to-15 percent of sales to research and development, under Bain, Dade spent nearly half, 6 to 7 percent - $61.7 million in 1997 and $88.2 million in 1998. The anemic R&D spending fit the pattern of recent private-equity excesses - first because Dade Behring needed money to pay off the debt Bain had loaded it down with, and second, because Bain lacked the proper incentives to build a company it planned to exit within five years.
Like clockwork, nearly five years after its initial investment, Bain was practicing its exit dance, changing the employee benefits package for many workers from a defined-benefit pension plan, in which employees were entitled to about 75 percent of the average of their combined salary in their last three working years, to a cash-balance plan, saving the company perhaps $10 million to $40 million from the conversion. The same month Dade used the projections of that very savings as part of the basis to borrow $421 million, $365 million of which it turned around and used to buy back some of Bain and co-investor Goldman Sachs Capital Partners' shares.
The Standard & Poor's rating agency believed the company with the added debt would be unable to pay its interest if it faced adverse business conditions.
With added debt, new areas had to be cut. Dade's Miami office, which had 850 employees in 1999, consolidated operations with a similar division in Germany. Pagliuca told the Globe that job cuts were necessary to improve Dade's performance. But by then it didn't matter how many divisions were consolidated or workers fired. Nothing could save the company from its crushing debt load. Finally, the decline in the value of the euro, which Dade was too cash-strapped to hedge against, caused the company to collapse. It filed for bankruptcy in August 2002.
Dade's creditors took over the business, and Bain lost all its shares. But, Bain and Goldman - after putting down only $85 million to buy Dade and receiving the $365 million distribution, made out like bandits - a $280 million profit. Later, the Globe reported, creditors alleging these gains were "illegal dividends'' got the private equity firms and other entities to pay them back $68 million of the $365 million.
Did this company have to be treated this way? Was it making a bad product? Was it at the end of its productivity? After the bankruptcy, creditors agreed to cut the company's debt by more than half in exchange for company shares. They saw that if Dade focused on growth and not on juggling its debt load, it had the potential to be a strong business. Dade began pumping money into R&D - more than 8 percent of revenue in 2003, 2004, and 2005. By 2006, Dade's sales had risen 40 percent. The next year, Siemens bought the company for $6.7 billion, five times more than its value at the time of the bankruptcy.
Pagliuca said recently that the Kennedy ads showing the bitterness of laid-off workers were unfair because they distorted the entirety of Romney's body of work. An examination of Bain's record, and Pagliuca has been a key member of Bain since its early days, shows that Bain made big profits out of six formerly healthy companies it helped drive into bankruptcy (Stage Stores, Ampad, GS Technologies, Details, KB Toys, and Dade). During the credit boom from 2005 to 2007, Bain bought 22 businesses. Moody's Credit Rating Service in November said 10 of those companies, including Clear Channel Communications and Guitar Center, are either distressed or in default, 45 percent of the total.
I am not a resident of Massachusetts and take no side in this campaign. But I agree with Pagliuca that the entirety of a man's work be available to voters before they throw the lever.
SupportSpace Raises $10 Million Series B
SupportSpace, a company that provides on-demand remote tech support solutions, announced today that it has raised $10 million in funding. The round was led byEmergence Capital Partners and also included previous investors BRM Group and Gemini Israel. SupportSpace has raised $24.25M in total funding so far. Kevin Spain of Emergence Capital Partners has also taken a board seat as part of the funding.SupportSpace, founded in 2006, aims to help expand their remote tech service by offering a SaaS (software as a service) platform for the management, marketing and delivery of remote services and a network of virtual experts.
To get tech support using SupportSpace, you choose a service or an online expert, then connect to the expert and watch your problem being resolved on your screen in real-time.
According to SupportSpace Co-Founder and CEO Yair Grindlinger, SupportSpace will use the funds to enhance its infrastructure, expand its team, and acquire new partners.
Investimonials Wants To Be Your Guide To Quality Financial Products
If you've ever tried searching the web for financial advice, you probably know just how much junk there is out there. Sure, there may be a few diamonds in the rough, but oftentimes the best results go to the finance 'experts' who are good at SEO – not the ones who know what they're talking about. Investimonials is a new site launching this week that's looking to offer an unbiased view of the variety of financial brokers, services, videos, and books out there. And to do that, it's turning to the site's community to submit their own reviews (it's essentially a TripAdvisor for financial goods).
The new site was founded by Timothy Sykes, a controversial financial expert who was named to Trader Monthly's 2006 "Top 30 under 30″ and had a once-successful hedge fund that shut down in 2007 after taking heavy losses. Since then, though, he's mounted a comeback and is now one ofCovestor's top ranked traders (though some people aren't fans of his tactics).
Sykes says that his goal with Investimonials is to help users cut through the spammy and scammy financial sites that litter the web, by offering a comprehensive hub of user reviews for each product. Investimonials will be launching with eight categories, including the top rated Brokers, Newsletters, DVDs, Books, and websites, with plans to have "dozens" over the next few years. At launch the site has 3,000 products ready to review, though the vast majority of them haven't been reviewed by anyone yet.
Sykes says the primary competitor in this area is EliteTrader, which has been around for a decade and has around one thousand total reviews (the site also looks pretty dated).
Investimonials incentivizes users to write reviews and share their personal contact information by offering 'iv bucks', which can be traded in for prizes. Many of these are Sykes's own products, though there are a variety of prizes from others as well.
Investimonials seems like a good idea, though it's going to have to be very transparent if it wants to avoid constant accusations of bias. And as with all review sites, it's going to suffer from the chicken-and-the-egg problem – until it has a lot of reviews about products, few people will have a good reason to use it.
The new site was founded by Timothy Sykes, a controversial financial expert who was named to Trader Monthly's 2006 "Top 30 under 30″ and had a once-successful hedge fund that shut down in 2007 after taking heavy losses. Since then, though, he's mounted a comeback and is now one ofCovestor's top ranked traders (though some people aren't fans of his tactics).
Sykes says that his goal with Investimonials is to help users cut through the spammy and scammy financial sites that litter the web, by offering a comprehensive hub of user reviews for each product. Investimonials will be launching with eight categories, including the top rated Brokers, Newsletters, DVDs, Books, and websites, with plans to have "dozens" over the next few years. At launch the site has 3,000 products ready to review, though the vast majority of them haven't been reviewed by anyone yet.
Sykes says the primary competitor in this area is EliteTrader, which has been around for a decade and has around one thousand total reviews (the site also looks pretty dated).
Investimonials incentivizes users to write reviews and share their personal contact information by offering 'iv bucks', which can be traded in for prizes. Many of these are Sykes's own products, though there are a variety of prizes from others as well.
Investimonials seems like a good idea, though it's going to have to be very transparent if it wants to avoid constant accusations of bias. And as with all review sites, it's going to suffer from the chicken-and-the-egg problem – until it has a lot of reviews about products, few people will have a good reason to use it.
What If Steve Jobs Hadn’t Returned To Apple In 1997?
Today is Thanksgiving in the U.S. Traditionally we take stock of the things that we’re thankful for on this day each year. And I realized that one of those things is Steve Jobs. I’m thankful that he returned to Apple in 1997 and did the things he has done since. It wasn’t at all a certainty that he would ever return to the company that he cofounded two decades earlier. In fact, it was only luck and coincidence that pushed him back there.
It was late December 1996. I was an associate at Wilson Sonsini Goodrich & Rosati, the largest and most well known law firm in Silicon Valley. I’d fought for my job there, and I was lucky to be in a small group of lawyers that worked on some of the hottest deals at the firm – Netscape public financings and acquisitions, Pixar’s corporate deals with Disney, and NeXT Software, among others. Steve Jobs ran Pixar and NeXT, and whenever he did something that needed a law firm, he called my boss. Well, my boss’ boss – Larry Sonsini.
That month Larry got a call. Steve was going to try to sell NeXT Software to Apple. He’d presented to the Apple board of directors, and his characteristic anti-charm won them over. They’d shortly pay about $400 million to get NeXT, with Steve Jobs returning to Apple as an advisor. It wasn’t long before he took the CEO job and started a more than decade-long run of hit products that have disrupted the computer, music, television, movie and telecommunication industries.
We worked night and day on that deal for six straight days, barely leaving the office and usually sleeping on the floor under our desks. When we were done, one of the partners drove me over to Steve’s house to get his final signature on the documents I remember stuttering in his presence about my first computer, an Apple II+. A few days later Steve left me a voicemail about an administrative issue. I saved that voicemail for years, until I left the firm. It was, all in all, a formative moment for me.
And even today, not that many people fully realize how unlikely it was that the deal would ever happen. Apple was also negotiating with Jean-Louis Gassée to acquire his company, Be Inc. Be’s operating system BeOS was probably a better product fit with Apple than NeXT. Apple offered a rumored $200 million for Be, but Gassée held out for far more. And so Apple went with Jobs at the last minute.
Here’s what the NeXT Software website showed immediately after the announcement:
What if Apple had bought Be, and Steve never returned to Apple? What would the company, and our world, look like today?
Apple Then, Apple Now
When Steve Jobs returned to Apple the company had just completed a fiscal year where they lost about $1 billion on $7 billion in revenue. The company was worth about $4 billion. Rivals like HP and Dell were worth about $62 billion and $8 billion, respectively.
Today Apple is worth a staggering $184 billion on revenues of $36.5 billion and net income of $8 billion. The company is now worth far more than HP and Dell combined. Hewlett Packard is worth just $119 billion, and Dell is worth $28 billion. You could throw another Dell in there and Apple would still be worth more.
In 1997 Apple had a snoozy product line that included the ill-fated Newton, the Performa, the Power Macintosh, the PowerBook a bunch of printers and a few servers.
User dependence on desktop software meant that only the very loyal or the very strange used Apple’s products. Everyone else wanted a common desktop platform.
Fast Forward to today. Apple has the sexiest products in the business: iMacs, Macbooks, iPhones, iPods and more. Even the Mac Mini has a place in my home, powering my television.
In the last three months of this last year alone, Apple sold 3 million Macs, 10 million iPods and 7.4 million iPhones.
But the hardware isn’t even the start of what Apple has done in the last 12 years. They’ve accelerated the pace of change in the music, film and television industries as well with the iPod and iTunes. And they’ve redefined the mobile phone with the iPhone.
If Gassée, or anyone else, had become the CEO of Apple back in 1997, how many of these products would exist today? Would Apple have ever made the first iPod, entering into an already saturated MP3 player market in the beginning of this decade? How likely would the iPhone have been? And next year we’ll see an Apple Tablet computer. Does anyone think anyone but Steve Jobs would have pushed that product to market?
I don’t think any of those products would have launched. Or if they did they would have been as notable as the MP3 players and phones launched by competitors like Dell and HP. Quick, who can name any of those products? Who’s owned one?
Our World Without Steve Jobs At Apple
Fortune recently named Steve Jobs the CEO of the Decade, and with good reason. Not only has Apple performed financially – it’s worth about as much as Google, and has a larger market cap than AT&T, HP, Intel, Dell and countless other huge tech companies.
But forget all that. What would our world look like without him? We’d likely still be in mobile phone hell. Chances are we still wouldn’t have a decent browsing experience on the phone, and we certainly wouldn’t be enjoying third party apps like Pandora or Skype on whatever clunker the carriers handed us. Even if you use an Android, Palm Pre or newer Blackberry today, you must thank Apple for pushing open the doors to mobile freedom. Think back to the phone you had in 2006, and then tell me you don’t love Apple for the iPhone alone (yes, I’ve moved on, but the iPhone was the genesis).
Steve Jobs was also the man who talked the major music labels into dropping DRM. He nearly single-handedly disrupted the entire industry. And it’s amazing how many laptops and desktops today mimic the look and feel of Macbooks and iMacs.
Apple certainly hasn’t done everything right (MobileMe comes to mind, and I have had nothing but trouble with the Macbook Air). And their stance on the iPhone is irritating and, well, sorta evil.
But all of that’s ok. Because without Steve Jobs’ Apple the world would be a less colorful place. The man is a living legend and deserves his place in history. This Thanksgiving, Steve Jobs is one of the things that I’m thankful for. And I bet you are too.
It was late December 1996. I was an associate at Wilson Sonsini Goodrich & Rosati, the largest and most well known law firm in Silicon Valley. I’d fought for my job there, and I was lucky to be in a small group of lawyers that worked on some of the hottest deals at the firm – Netscape public financings and acquisitions, Pixar’s corporate deals with Disney, and NeXT Software, among others. Steve Jobs ran Pixar and NeXT, and whenever he did something that needed a law firm, he called my boss. Well, my boss’ boss – Larry Sonsini.
That month Larry got a call. Steve was going to try to sell NeXT Software to Apple. He’d presented to the Apple board of directors, and his characteristic anti-charm won them over. They’d shortly pay about $400 million to get NeXT, with Steve Jobs returning to Apple as an advisor. It wasn’t long before he took the CEO job and started a more than decade-long run of hit products that have disrupted the computer, music, television, movie and telecommunication industries.
We worked night and day on that deal for six straight days, barely leaving the office and usually sleeping on the floor under our desks. When we were done, one of the partners drove me over to Steve’s house to get his final signature on the documents I remember stuttering in his presence about my first computer, an Apple II+. A few days later Steve left me a voicemail about an administrative issue. I saved that voicemail for years, until I left the firm. It was, all in all, a formative moment for me.
And even today, not that many people fully realize how unlikely it was that the deal would ever happen. Apple was also negotiating with Jean-Louis Gassée to acquire his company, Be Inc. Be’s operating system BeOS was probably a better product fit with Apple than NeXT. Apple offered a rumored $200 million for Be, but Gassée held out for far more. And so Apple went with Jobs at the last minute.
Here’s what the NeXT Software website showed immediately after the announcement:
What if Apple had bought Be, and Steve never returned to Apple? What would the company, and our world, look like today?
Apple Then, Apple Now
When Steve Jobs returned to Apple the company had just completed a fiscal year where they lost about $1 billion on $7 billion in revenue. The company was worth about $4 billion. Rivals like HP and Dell were worth about $62 billion and $8 billion, respectively.
Today Apple is worth a staggering $184 billion on revenues of $36.5 billion and net income of $8 billion. The company is now worth far more than HP and Dell combined. Hewlett Packard is worth just $119 billion, and Dell is worth $28 billion. You could throw another Dell in there and Apple would still be worth more.
In 1997 Apple had a snoozy product line that included the ill-fated Newton, the Performa, the Power Macintosh, the PowerBook a bunch of printers and a few servers.
User dependence on desktop software meant that only the very loyal or the very strange used Apple’s products. Everyone else wanted a common desktop platform.
Fast Forward to today. Apple has the sexiest products in the business: iMacs, Macbooks, iPhones, iPods and more. Even the Mac Mini has a place in my home, powering my television.
In the last three months of this last year alone, Apple sold 3 million Macs, 10 million iPods and 7.4 million iPhones.
But the hardware isn’t even the start of what Apple has done in the last 12 years. They’ve accelerated the pace of change in the music, film and television industries as well with the iPod and iTunes. And they’ve redefined the mobile phone with the iPhone.
If Gassée, or anyone else, had become the CEO of Apple back in 1997, how many of these products would exist today? Would Apple have ever made the first iPod, entering into an already saturated MP3 player market in the beginning of this decade? How likely would the iPhone have been? And next year we’ll see an Apple Tablet computer. Does anyone think anyone but Steve Jobs would have pushed that product to market?
I don’t think any of those products would have launched. Or if they did they would have been as notable as the MP3 players and phones launched by competitors like Dell and HP. Quick, who can name any of those products? Who’s owned one?
Our World Without Steve Jobs At Apple
Fortune recently named Steve Jobs the CEO of the Decade, and with good reason. Not only has Apple performed financially – it’s worth about as much as Google, and has a larger market cap than AT&T, HP, Intel, Dell and countless other huge tech companies.
But forget all that. What would our world look like without him? We’d likely still be in mobile phone hell. Chances are we still wouldn’t have a decent browsing experience on the phone, and we certainly wouldn’t be enjoying third party apps like Pandora or Skype on whatever clunker the carriers handed us. Even if you use an Android, Palm Pre or newer Blackberry today, you must thank Apple for pushing open the doors to mobile freedom. Think back to the phone you had in 2006, and then tell me you don’t love Apple for the iPhone alone (yes, I’ve moved on, but the iPhone was the genesis).
Steve Jobs was also the man who talked the major music labels into dropping DRM. He nearly single-handedly disrupted the entire industry. And it’s amazing how many laptops and desktops today mimic the look and feel of Macbooks and iMacs.
Apple certainly hasn’t done everything right (MobileMe comes to mind, and I have had nothing but trouble with the Macbook Air). And their stance on the iPhone is irritating and, well, sorta evil.
But all of that’s ok. Because without Steve Jobs’ Apple the world would be a less colorful place. The man is a living legend and deserves his place in history. This Thanksgiving, Steve Jobs is one of the things that I’m thankful for. And I bet you are too.
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