Incentive, Compensation and Sales Performance Management

I had a very insightful conversation yesterday with Paul Turner and Jock Breitwieser from Callidus Software. We talked about several topics and I will share their insight in my next few posts.

Paul Turner is Director of Product Marketing at Callidus Software. He has over 13 years experience in enterprise software focusing on sales and business performance management, business intelligence and incentive compensation. Prior to joining Callidus, Paul was Director of Product Marketing at Hyperion Solutions. Paul holds a BSc in Computer Science from Lancaster University, England.

Jock Breitwieser is the Director Public and Analyst Relations at Callidus Software. He has extensive experience in public relations with a strong international background and expertise. Before joining Callidus, Jock was an account manager at The Hoffman Agency.

I recently read several articles talking about the impact of a slow-down in economy on sales performance efforts, both from a SaaS and CRM/On-premise perspective. I used this occasion to bombard my two guests with questions on this topic and several good arguments came out of the conversation.

General Thoughts on the ICM Market:

• The selling point of ICM solutions is to achieve a good return on investment.
  
• Measuring the actual return on investment can be hard to do, but looking at the potential cost savings alone can justify a sales performance system.
  
• With a proven Return on Investment, ICM solutions can be justified regardless of market conditions.
  
• A slower market can actually contribute to an expansion of the Sales Performance Management market.

Market outlook for Callidus SaaS Offerings:

• While Forrester predicted a slow down in the SaaS market, Callidus has seen phenomenal growth in this area - In Q4 of 2007, Callidus On-Demand annual contract value (ACV) increased 150% to $.6 million.
  
• Callidus has also seen a much greater adoption of their on-demand solutions by enterprises of all sizes including Incentra and Lenovo.
  
• The integration of key Callidus components with SalesForce.com is also an aspect which encourages small to medium-sized businesses to adopt Callidus as their Sales Performance Management system.

Market Outlook for Callidus On-Premise Offerings

• Callidus continues signing on new clients and growing in this area.
  
• In 2007, overall revenues were up 35% vs. 2006 ($100 million versus $76 million).
  
• License revenues were also up by 3% to 28.6 million.
  With the acquisition of Compensation Technolgies, Callidus will generate additional consulting revenues from Callidus implementations and adds new offerings for strategic services.

Additional Thoughts

• Callidus recently announced more growth in the European market. They have increased their headcount to 50 employees in the Europe, Middle East and Africa (EMEA) region.
  
• Callidus has also opened a new EMEA headquarters in London.
  
• Getting more clients in Europe offsets the lower US dollar.
  
• One notable new client is npower, a leading UK energy company.

Overall, Paul and Jock were very upbeat about what is coming up in 2008, both from a Callidus perspective and for the Sales Performance industry in general.

[Part II of III of my Interview with Callidus]
[Part III of III of my Interview with Callidus]