NewswireTODAY - /newswire/ - Frankfurt, Germany, 2010/11/15 - Business Consulting firm Frankfurt Partners released the third edition of its biannual Software as a Service (SaaS) Valuation and Metric Report.

SaaS remains a relatively new business model but it has a great potential for growth. As of 2010, it is estimated to have reached less than 20% of its potential market.

The largest proportion of SaaS customers so far are SMEs and medium-sized companies with relatively little break-through into the enterprise market. However, the level of adoption by enterprises is starting to increase rabidly. By the end of 2010, 80% of U.S. organizations will use at least one SaaS-delivered application for business use.

“The M&A Activities have picked up in the last 12 month as a array of companies are seeking to capitalize on the rising demand for SaaS solutions and trying to position themselves as a strategic player in the SaaS market”, says Rene Meister. “Given the attractive characteristics of SaaS companies from a financial perspective (i.e. strong growth, revenue visibility), it is not surprising that M&A activity for SaaS vendors has been strong.”

This report includes extensive benchmarking data about the SaaS Market. It is an invaluable resource for metrics and benchmarks for running a business based on the SaaS business model.

Reports key findings:

• Although many more companies are entering the SaaS market, most of these are providing SaaS as an extension to their existing product line.
• With a total asset value of $2,460 million stated in its end 2009 balance sheet, Salesforce is more than three times the size of its nearest rival.
• SaaS providers require around 50-70% more capital than traditional software companies before they achieve a positive cash flow.
• Pure play SaaS providers are the most valuable out of 23 categories of software companies.
• Mergers and acquisition valuations have generally fallen from an average of 6.2 times revenue in 2007 to 5.3 times in 2010. Overall Deal sizes have been fallen too.
• Successful pure play SaaS providers such as Netsuite and Salesforce.com are valued much higher then companies that still have traditional business models.

Key Topics Covered:

• Overview Leading SaaS Providers;
• SaaS Company Valuations;
• SaaS M&A Deals;
• Key Operating Figures.

For more information about the report please contact us at SaaSReport[.]frankfurtpartners.com or visit frankfurtpartners.de/.

Agency / Source: Frankfurt Partners

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