CAX ESTIMATION. Estimate market size for cloud based customer service software providers like Freshdesk, Zendesk etc. in the US

Transcription

1 CAX ESTIMATION Estimate market size for cloud based customer service software providers like Freshdesk, Zendesk etc. in the US 1

2 Content Section Page Number Market Size, Vendor share, List of target companies Market Size 4 Vendor Share 5-6 List of target companies 7 Facts and Assumptions Facts 9 Assumptions 10 Estimations Supporting facts/figures and rationales References 20 2

3 Market size, Vendors and list of target companies 3

4 Dollar value of the SaaS Helpdesk Market size for the target market in the US in Million USD 4

5 Market share of top help desk software vendors in US By number of customers in the US By number of active users in the US Refer slide 14 for detailed calculations 5

6 How top vendors [by number of customers] are positioned in the market High Focus on customer retention Focus on small-mid sized customers Focus on mid-large sized customers Low Low High X axis: Estimated number of customers in US X axis: Estimated number of active users in US Size of bubble: Usage ratio [explained on slide 14] 6

7 List of 10 companies that client should target Company name Company size Stakeholder within the target company to be targeted Ixia Liquidity services Shutterfly Inc. IPG Photonics Orbitz Worldwide Simon and Schuster Gilt.com Athenahealth.com Drugstore.com Fortinet Turnover :455 mn USD Employee strength : Turnover :496 mn USD Employee strength : Turnover :666 mn USD Employee strength : Turnover :581 mn USD Employee strength : Turnover : USD 847 mn Employee strength : Turnover : USD 790 mn Employee strength : Turnover : USD 550 mn Employee strength : Turnover :451 mn USD Employee strength : Turnover : Above USD 450 mn Employee strength : Turnover :552 mn USD Employee strength : Professional services and Education services department Surplus asset management and other services division and the procurement & customer support wing Division handling the technology for photo sharing Applications divisions of the company and the procurement & customer support division Technology Procurement division & customer support wing handling the ticket booking Division handling the Business portal of the firm and other services like video streaming and the division looking after the procurement and technology wing related to customer support, purchase guidance Division handling the online payment transactions and also the one handling the website maintenance and upgradation Division handling the electronic/online health management systems technology and the online payment division Division handling the customer care and online transactions Cloud management, antivirus and other service support division 7

8 Facts and assumptions 8

9 Facts FACT 1 SaaS Market was valued at USD 14.5bn globally in 2012 and is expected to rise to USD 33 bn by 2015 FACT 2 SaaS market is expected to be worth USD 133bn by 2020 FACT 3 USA accounts for 60% of total SaaS market and North American SaaS revenues were around USD 9.1bn in 2012 (with USA accounting for maximum of those) FACT 4 SaaS market worldwide is expected to grow at a CAGR of 32% globally and that in North America is expected to grow at a CAGR of 25% FACT 5 Customer support market for SaaS based CRM is forecasted to be worth USD 4.6 bn in 2013 and projected to grow at a CAGR of 7.8% FACT 6 The target industry accounts for approximately 13% of the US GDP (analysis in slide no. 14) FACT 7 As per Gartner, the average IT spends by industries is 3.3% of the revenue and 12% of total IT spends is on SaaS (as per BCG) 9

10 Assumptions ASSUMPTION 1 The SaaS compounded annual growth rate for US is same as that of North America ASSUMPTION 2 The growth rate, globally and for North America (hence for US), is going to remain as it is by assuming no major technological disruption or macroeconomic changes ASSUMPTION 3 The market share for the top helpdesk vendors is calculated by considering the no. of users & customers, revenue and Google trends statistics. Also the figures have been triangulated by considering the top 20 vendors ASSUMPTION 4 The CAGR for USA for SaaS based helpdesk market is same as that for total SaaS market (i.e. 25%) ASSUMPTION 5 The CAGR for SaaS based CRM customer support is the same as that for total CRM customer support ASSUMPTION 5 The IT spends for US are same as those globally & spends of SaaS based CRM customer support to be in the same ratio with total SaaS spends as the ratio of the market sizes 10

11 Estimations 11

12 Estimation: US SaaS Market Size Analysis from Pierre Audoin Consultants (PAC): US accounts for 60% of global SaaS sales in 2012 Analysis from Parallels Global SMB Cloud Insights: Global Market Size 2012 : USD 14.5bn =60% of Global SaaS market = 60% of USD 14.5 bn = USD 8.7 bn Analysis from Parallels Global SMB Cloud Insights: North America Market Size CAGR : 25% Hence, by correlating the analyses of PAC & Gartner, the market size for SaaS for US in 2012 can be considered USD 8.7bn (which is 96% of total market size of North America) and growth rate 25% Thus, market size for SaaS in US for 2015 = USD 8.7bn *(1+0.25)^3 = USD 13.6bn [Projected SaaS market size in US by 2015] 12

13 Estimation: US SaaS Customer service/helpdesk market size Globally, Share of customer service in SaaS based CRM in 2013 : 4.6 bn USD As per Garner, 40% of CRM software are SaaS based Global Market size for SaaS base customer service and support = 40% of 4.6bn USD = 1.67bn USD North America s share in SaaS based CRM Customer support in 2013 : 52.9% North America s Market size for SaaS base customer service and support = 52.9% of 1.67 bn USD = 880 mn USD Share of USA in Overall North America s SaaS market : 96% US Market size for SaaS base customer service and support = 96% of 880 mn USD = 845 mn USD CAGR of SaaS industry in North America [source: Analysis from Parallels Global SMB Cloud Insights] = CAGR : 25% SaaS based CRM customer support size for USA in 2015 =1.32 bn USD 13

14 Estimation: What percent of Overall SaaS market in US is SaaS based Customer service product? US market size for SaaS products : 13.6 billion USD [Slide12] US market size for SaaS-based Customer support products : 1.32 billion USD [Slide13] % of SaaS-based customer support products OF overall market size for SaaS products = 1.32 / 13.6 = 9.7% 14

15 Estimation: US SaaS Customer service/helpdesk market size for Technology, Travel, ecommerce and Publishing industries According to Gartner, cross industry average spends on IT is 3.3% of the industry revenue [as per 2013] IT spend for target verticals = 3.3% of bn USD = 73 bn USD According to BCG, SaaS happens to be 12% of the total IT spends Industry revenues of Target verticals Target Market Industry revenues in USD bn Technology & Tech. services 1541 Travel 303 Publishing E-commerce 343 Total Revenue Market size for SaaS products for target verticals = 12% of 73 bn USD = 8.74 bn USD [as per 2013] (Note :The technology and technology service section comprises of the information technology, medical technology and environmental technology) Market size of SaaS-based customer support products for target market = 9.7% [slide 14] of 8.74 bn USD = 848 mn USD [as on 2013] Projected growth of SaaS based CRM globally = 7.8% Assuming US SaaS CRM market grows at 7.8% as well Market size of SaaS-based customer support products for target market by 2015 = 985 million USD 15

16 Supporting facts/figures and rationales 16

17 Estimation steps for Estimation of top Customer service/help desk SaaS software vendors in the US Share of the top vendors in the US helpdesk market was found out using the following methodology : 1. The revenue of the top helpdesk companies was found out for The revenues for almost all companies is for those units of the companies registered in the US. 2. To get an idea of the company s presence in US, Google trends was used to get an idea of the visits on their respective sites by USA personnel vis-a-vis other those from other countries 3. The details of the users and customers of the companies were found out. This details are not USA specific. 4. All the 4 parameters listed above were rated with points, with the company scoring highest in any parameter getting highest points in the respective parameter. For those companies whose data wasn t available(those companies happen to be low in almost all the parameters), 1 was awarded as a point for the respective parameter 5. The product of the points for parameters revenue and Google trends popularity in US was added to the product of the points for no. of users an no. of customers. 6. The total score for each company was benchmarked against other companies and the respective market share was calculated on the basis of that comparison. The detailed analysis is on the next slide. 17

18 Estimation steps for Estimation of top Customer service/help desk SaaS software vendors in the US Vendor Customers [a] Users [b] Usage Ratio* [b/a] % of website hits coming from US [alexa.com] [c] Estimated' customers in USA [d= a*c] Estimated' users in USA [b*c] 'Estimated' market share of vendor [d/ d] Zendesk 40, % Kayako 34, % Uservoice % Bomgar % Freshdesk % SysAid % ManageEngine % ClickDesk % rightnow % ConnectWise % IssueTrak % LiveHelpnow % Parature % Help Scout % JitBit % Mojo Helpdesk % *Usage Ratio: Usage ratio tells number of active IT administrators who are using the product per number of customers who have subscribed for the product till date. Low Usage ratio might signify Low number of users per customer use the product Customers who once subscribed to your product have switched to other products Source for [a],[b] : Capterra blog post Source for [c] : Alexa.com 18

19 Rationale for Finding top 10 potential customers for our Customer service/help desk SaaS software provider in the US Sr.no. Company Category Reason for recommendation 1 Ixia Technology Last 3 years growth of 30% and last year growth of 43% and major presence in cloud services. Despite their presence in the cloud, they may offload a part of their work to other players. 2 Liquidity services Technology Last 3 years growth of 23% and last year growth of 22%. Also, the firm is in online services related to wealth management and customer management requirement is imperative 3 Shutterfly Inc. Technology 4 IPG Photonics Technology 5 Orbitz Worldwide Online travel 6 Simon & Schuster Publishing Company 7 Gilt.com E-commerce 8 Athenahealth.com Technology 9 Drugstore.com E-commerce 10 Fortinet Technology Last 3 years growth of 25% and last year growth of 25%. The firm engages in online photo sharing and hence they may require assistance with client interaction services Last 3 years growth of 46% and last year growth of 17%. The company is into laser products and hence may require a structured channel for business interaction Growth rate of 8.7% in The travel portal management and services for customer interaction may be required by the firm Revenues from digital sales increased 35% from the previous year and represented 23% of total publishing revenues in The firm deals with digital services for which they may require analytics assistance and customer support. Customer support also required in general Sales grew by 22% in An e-commerce site has heavy visits and other activities on the website. To handle it effectively they may require SaaS services Last 3 years growth of 31% and last year growth of 29%. Their online health management system may require resources for customer handling. Revenue growth expectations of 64% from 2010 to 2013 to USD 750mn. A fast growing e- commerce site that it is, it will require cloud assistance for handling huge customer requests. Last 3 years growth of 21% and last year growth of 29%. Transaction for its online products may require cloud assistance. Despite their presence in the cloud, they may offload a part of their work to other players. 19

20 References 1. Cloud Hits the Enterprise, Deloitte Review, issue 11, Profit from the cloud, Parallels Global SMB Cloud Insights, Google trends : LinkedIn : CRM Software Revenue Forecasts, Worldwide, , Gartner (2012) 21. Siemer & Assoiciates, SaaS Report, Summer

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