Appirio Gains Sequoia Capital Funding: What Does It Mean?
Quite a bit, actually. This is one that you should look at deeper than the headline.
Last week, Appirio announced that it bagged Series B funding upwards of $5M by Sequoia Capital. It’s worth noting that Sequoia is the same firm that underwrote upstarts such as Google, Yahoo, LinkedIn and PayPal. The pedigree is Midas-esque in its strength.
Jeff Kaplan of THINK IT Services nails it in a smart piece entitled The Market Implications of Sequoia Capital’s Funding of Appirio:
Many analysts and trade pub reporters have questioned whether there is a role for consulting and professional services in the SaaS market. There is no question that traditional professional services firms such as Accenture and CAP Gemini are still searching for the right way to scale down their methodologies and costs to fit the on-demand services market. However, Appirio’s revenues have grown more than 400% in the last three months, during which over 1500 customers in 80 countries have adopted its on-demand solutions.
In other words, the SaaS consulting market, as a market differentiated from blue-chip ERP/enterprise IT consulting, has been financially validated. This isn’t “so-and-so customer chooses so-and-so SaaS vendor, so check out how SaaS is maturing.” This is an order of magnitude stronger than win stories or market buzz: this is $5M of real dollar validation by an investment firm that has a history of picking winners.
Here at MiPro, we continually are trying to refine our methodologies, delivery timetables and cost structures for our on-demand clients. We know the SaaS market is a different animal entirely than, say, our mainline PeopleSoft ERP practice. On the macro level, it’s good to see the validation Kaplan suggests from a broader market vitality perspective. In a more subtle level, it makes me proud that we are working in the exact same direction as some of the biggest names in SaaS/on-demand consulting. Cool stuff.
