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Many VCs don't believe that SaaS is an investment sector much less something to devote a section of their website on. They believe that it is merely a new way that software gets distributed. We think differently:
- We believe that SaaS represents a tectonic shift in the enterprise software landscape, not only expanding its reach to the middle market but creating new opportunities to change who the category leaders are in the entire industry.
- Our belief in SaaS being a dominating area to yield superior VC returns is reflected in the fact that we have invested in the largest portfolio of SaaS companies
SaaS is not just ASP 2.0 where software vendors have figured out how to more efficiently host enterprise software and bundle this with a new monthly pricing model. It is above else about ensuring the delivery of value to customers and doing so on a continuous basis. To accomplish this feat economically, requires that not only is the software built on a scalable multitennant architecture but also that the business itself is architected in a scalable way including an efficient sales and service model.
Perhaps the biggest change of all is that SaaS finally empowers users themselves to free themselves of their IT organizations and select a solution that meets their needs instantly. The power shift away from CIOs is the main reason why many former category leaders in the traditional software industry now find themselves in Redwood Shores rather than successful independent businesses.
SaaS creates opportunities for entrepreneurs who deeply know how to deliver continuous value to customers. We not only believe that SaaS requires different types of entrepreneurs but different venture investment partners as well, ones that fundamentally understand the change in thinking required for value delivery and just as important how to measure it.
For us at Bay Partners, our learning has been achieved by working closely with many entrepreneurs that are already staking their claim on SaaS category leadership. We are proud of their success so far and continuously look for new startups with similar ambitions. To that end, we just announced a partnership with salesforce.com to help us identify new companies in the space. This is the first of many initiatives we have planned as we take part in this exciting change in the software industry. Stay tuned for more news from us.....
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