Tioga Venture Blog

Old Blog - New blog

As you noticed, this blog has been quiet for a significant amount of time. Partly for bad reasons (not finding the time to blog) and partly for good reasons. Over the last 6 months, Tioga Venture underwent major changes as our two partners decided to join new companies and start exciting projects :

Julien Mazerolle joined Vocalcom as head of Professional Services

Frederic Halley joined Next World Capital as venture partner.

As I am a big believer in social media and that blogs is the stepping stone on which you build your social media strategy, I will start a new blog : http://eurotechview.com/. The bad reasons for not blogging still need to be addressed but I will be back soon.

Frederic Halley

Google Chrome secret to beat Microsoft IE

 

It is no secret that over the last two years, Google Chrome has been stealing significant market share from competition, both from Firefox and Internet Explorer. Over the last 2 years, Google Chrome has reached 20% market share.

Why is that? First, and foremost, Google Chrome is a good browser: it is simple and fast and offers most of the functionalities proposed by competition. On top of that, Google marketing machine has been pushing very hard this product over the last 2 years, for instance:

• In 2010, they had a major advertising campaign in the French market with TV advertising, billboards in the metro, banners on major websites …
• On Google search homepage, the advertising to download is constantly present (if you are using a different browser).

Looking at the details with our team, we noticed that one of the most striking features of Chrome is its release cycle. Google releases one major version every other month when Microsoft releases a major version of Internet Explorer every other year. The following graph maps this phenomenon quite well. At the time of its release, internet explorer is roughly at par with chrome in term of performance (here load time to keep it simple), except chrome will then release 2 or 3 major versions in the following 6 months creating a new performance gap. Beyond the capabilities at a given time, the real differentiation of Chrome is the way the development is managed more than an absolute level of performance. In the end the learning is faster and the quality perceived by the consumer is better. Interestingly, Microsoft has mostly stuck to its old ways of doing things releasing a version every two years. This way of working is an asset when working with enterprises as they don't want constant upgrades but not so much when you're addressing the consumer markets. Once again Microsoft is on the enterprise side of the business whereas Google has a consumer side to it.

 

We believe that this applies to many software products, especially targeted at consumers. Fast release cycle end up creating a better product and a real advantage on the market place.

What do you think?

 

Frederic HALLEY

 

Google+: strong growth but the jury is still out

Google+ has been launched a few weeks ago and the numbers of its staggering growth are released weekly, pointing to a much faster growth than facebook or twitter.

 

The comparison is intriguing but mostly meaningless. Google+ is a service released by the most powerful internet company in the world with a user base of close to a 1bn, including hundreds of millions of gmail accounts. At the time of their launch, facebook and twitter were unknown start-ups among hundreds vying for internet users' time. They were targeting only US users or even a subset (top US universities for Facebook). On the contrary, Google has deployed a massive PR and marketing effort to convince its user base to try its service. So far, it has managed to convince 1% or 2% of its users to try Google+. Quite good but not earth shattering.

The real question for Google+ is whether it will be able to cross the chasm or not. Early adopters and geeks tend to love most products launched by Google. At its launch, Google Wave had good reviews from the tech enthusiast. The issue came when real people started trying the service and didn't see the point. As far as Google+ is concerned, I don't think that is the risk. It is a very nice service with a clean and efficient user interface. This time, I don't think there is a real risk of average users not enjoying Google+.

However, for a social network, being good is not enough. It needs to be significantly better than existing solutions (i.e. Facebook) to justify users switching. The staggering figures for Facebook is not so much the number of users (it is still very impressive) but even more the time spent per user. The stickiness is such that in many countries, Facebook is the number one website in term of time spent. The stake for Google is to have people try Google+ but beyond that, have them switch a major part of their digital life (friends, games, photos …). So what we are seeing is just the beginning of the battle between Facebook and Google who are know the major competitors in internet: they are fighting for same advertising dollars and eyeballs time.

Google+ is very good social networks and is a real alternative to Facebook but the fight for time (and not only users) is only starting.

Frederic HALLEY

Tioga Venture Partners with Tableau Software to Provide Leading Analytics Capabilities

 Paris, July 6, 2011

Tioga Venture today announced that it is officially a partner of Tableau Software, the fastest growing – according to Gartner – provider of business analytics software.

The time of 'big data' has arrived and tens of millions of lines of data daily are common while the developments of social media and e-commerce have disrupted the business intelligence (BI) world. The amount of data generated by the largest websites is massive and at the same time, the speed required to analyze this data and act on it has accelerated exponentially. The solutions from the 80s and 90s have not adapted to this new paradigm and a new generation of solutions has emerged to place the power back in the users' hands.

Tableau Software is recognized by many analysts as the foremost software to analyze 'big data'. Claiming many of the marquis e-commerce and social media companies as customers, Tableau Software has demonstrated continually that it has the capabilities to address the new challenges of data analysis, including rapid-fire processing of millions of rows of data and a visually intuitive interface to manipulate and analyze data.

Headquartered in Paris, France, Tioga Venture's expertise in technology and marketing combined with analytical skills and real business experience have allowed Tioga to significantly contribute to the success and growth of internet and e-commerce-driven companies for the past decade. Tioga will bring this expertise to Tableau, focusing on its e-commerce and internet customers.

Bruno Saint-Cast, VP European Sales at Tableau Software declares, "We are very happy to have Tioga Venture as a partner. Their expertise in e-commerce and the Internet will allow us to accelerate our growth in these sectors throughout France." Frederic Halley, Managing Partner of Tioga Venture adds, "We strongly believe that Tableau has the best solution for the data analytics of e-commerce and internet companies. Tableau's products will allow our customers to accelerate and industrialize the way they analyze data to impact their business in ways previously unavailable."


About Tableau Software

Tableau Software is the leading provider of visual analytics and rapid-fire business intelligence software. Ranked by Gartner in 2011 as the world's fastest growing business intelligence company, Tableau makes its award-winning applications available for download at http://www.tableausoftware.com/trial. They enable anyone to easily create and share interactive data visualizations, dashboards and analytics from virtually any data, even massively big data, and can scale to organizations of any size or reach. For more information, please visit http://www.tableausoftware.com.

About Tioga Venture

Tioga Venture is a leading global venture consulting firm that provides expertise to companies who are positioning for significant future growth. Tioga's strategic insight, managerial expertise, and consulting services to technology ventures and executives help overcome strategic, organizational and operational challenges in sales, customer service and marketing. Clients include Microsoft, Ebay, Autodesk and Alcatel-Lucent.  Tioga Venture is headquartered in Paris with offices in Silicon Valley. For more information on Tioga Venture, visit our web site at: http://www.tiogaventure.com.

 

Taleo acquires JobPartners: end of party is near

On June 21st, Taleo, the leading talent management Saas company, acquired JobPartners, a French-UK Saas recruitment company. The deal is interesting for many reasons. It marks the acceleration of the consolidation of the Saas talent management space in Europe. Among the Saas talent management companies that started in the early 2000s (JobPartners, Stepstone, Mr Ted, …) very few are still independent. At the same time, the US companies have gone public and raised massive amount of cash on very high valuation

The diagram above shows the relative revenue and gross margins of the 3 US leaders: Cornerstone On Demand (CSOD), SuccessFactors (SFSF) and Taleo (TLEO). Taleo is worth 1,5bn$ and SuccessFactors 2,7bn$. Of course, no European competitor matches them, neither in size nor in valuation. The revenue multiple varies from 5x for Taleo to 16x for Cornerstone On Demand. The market conditions are dramatically different as few if any of the Saas pure play companies are quoted and not with that kind of multiple anyway. The consequence of the difference in market size and financial market conditions is what we are observing now: the acquisition of European companies by US leaders.

From the 8-K of Taleo, we can get a few numbers on JobPartners: the company will bring approximately 10-12M$ revenue GAAP to Taleo (and approximately double that in non-GAAP). It points to a very high contribution of service to revenue at JobPartners; consistent with their positioning serving large accounts, but not quite worth the same. The acquisition at 38M$ gives a multiple of 3,5x revenue. A good buy for Taleo which is valued at 5,5x its revenue. It also confirms that, in absence of strong public market, it is difficult for European companies to get the same kind of multiples as the ones seen in the US.

For the European Saas talent management companies that are not getting acquired by US vendor, the future is not necessarily bright. The three US leaders are investing heavily in Europe building direct sales force and channel across EMEA. They now have more boots on the ground than many competing startup.

Maybe this is the end of the party and time to find a date.

Frederic HALLEY

Les TIC en Chines : mythes et réalités

Depuis septembre 2010, Tioga Venture anime la commission internationale de l'AFDEL (l'Association Française des Editeurs de Logiciel). L'objectif de cette commission est notamment de répondre aux interrogations des dirigeants sur l'international mais surtout de partager les bonnes pratiques, et parfois les échecs, entre les membres. Lors des premières commissions, nous avons abordé des sujets comme :

• Comment démarrer à l'international
• Les Etats Unis
• La croissance par acquisition à l'international

La prochaine réunion de la commission sera consacrée à la Chine, marché mystérieux qui attire de par sa taille et sa croissance mais d'une grande complexité d'accès pour de nombreux éditeurs français. Cette commission sera co-organisée avec Ubifrance et donc ouverte à tous (y compris aux éditeurs qui ne sont pas encore membres de l'AFDEL). Cette réunion se tiendra le mercredi 22 juin de 9H à 11H dans les locaux de Ubifrance (77 boulevard St Jacques, 75015 France). Au programme, une intervention de l'équipe Ubifrance Chine sur les spécificités et caractéristiques du marché chinois mais aussi des témoignages de dirigeants (Dibcom, Basseti, Sage). Inscription directement auprès de Ubifrance ou de l'AFDEL.

Venez nombreux

Frédéric HALLEY

Tioga assisted Apax Partners in the acquisition of Vocalcom

On May 17th, Apax Partners announced its acquisition of 65% of Vocalcom. With 40M€ in revenue, Vocalcom is a leading supplier of contact and call centers solutions. Created on France in 1995, it is now an international company with two thirds of its revenue in emerging coutries such as Brazil and North Africa.

Apax Partners will take a 65% ownership of the company alongside Anthony Diniz who will keep a 35% stake.

Tioga Venture assisted Apax Partners in its acquisition of Vocalcom.

Official Press Release (in French).

 

Skyrock : le problème des blogs

Mardi 14 avril, Pierre Bellanger, PDG fondateur de Skyrock, a été remplacé comme directeur général de la société par son conseil d'administration. Ce changement a une répercussion considérable dans les médias notamment grâce à une campagne politico-médiatique remarquablement orchestrée. A ce stade, il est très difficile de comprendre dans les medias classiques les raisons de ce changement. Fidèle à nos habitudes, nous voudrions apporter quelques éléments factuels au débat.

Skyrock a deux business distincts :

• Une radio
• Un site web de blog (skyblog)

Les informations publiques disponibles sur l'activité de la radio ne laissent pas paraitre d'un problème spécifique. En revanche l'activité blog a souffert de manière majeure de l'arrivée en France de Facebook. Ci-dessous, les données d'Alexa montrant la part de pageviews (mondial) réalisée sur le site skyrock.com :

La chute est brutale. La 'part de voix' de Skyrock est passée en deux ans de 0,7% à environ 0,02% soit une division par 30 ! Aujourd'hui Skyrock est classée au 19^e rang en France alors que Facebook, avec 20 millions d'utilisateurs, est au 2^e rang. La décroissance s'est apparemment stabilisée depuis la mi 2010, mais il est vraisemblable que cette décroissance ait changé les équilibres économiques de la société.

Gemalto acquisition of Netsize: looking at the numbers

In January last year, Gemalto acquired Netsize. Back then, we shared our thoughts on the impact of this deal on the mobile payment industry (read details here). A few months afterward, we looked for some detail numbers in the H1 results of Gemalto… and could not find much (analysis of Gemalto H1 result here). Gemalto published last week its results and detailed annual report for 2010. Hopefully, this will give us a little more insight into this landmark transaction.

For the first time in its official document, Gemalto shares with is shareholders some details on the Netsize acquisition: "At the start of the year we took a controlling stake in Netsize, with its under-utilized mobile commerce and mobile marketing platform. This makes Gemalto a key player in mobile application sales, and rounds out the services we provide to operators to bolster their subscriber revenues."

The annual report is actually quite rich in numbers about Netsize:

• In 2010, Netsize's revenue were 61M€ and net profit was -4M€
• Gemalto paid 9M€ in cash for an extra 61,53% of Netsize to increase its stake to 85,65%
• At the time of acquisition, Netsize fair value of net assets was a significant -10,6M€. This situation probably explains the somewhat low valuation reached by the company.
• The net result is a goodwill of 18M€, net of minority shareholders' interest

Since the acquisition, things have also change at the management level. According to Netsize website management page, Stanislas Chesnais the founder and CEO has now left the company. Michel Leger, the first COO under Gemalto's watch has now joined Ingenico.

Intercim acquired by Dassault Systems

After a long engagement period, Dassault Systemes has finally acquired leading MES (Manufacturing Execution Systems) vendor Intercim. Tioga Venture was a strategic advisor to Pertinence for its merger with Intercim in 2007. The combination of the Intercim MES solutions and Pertinence manufacturing intelligence's products was key to deliver integrated solutions to customers such as Boeing, Airbus, Sanofi-Pasteur … The resulting combination was this surprising mix where the French management team had a key role in the combined entity, which is unusual in French – US combination of software vendors. Even in 2007, both Intercim and Pertinence had longstanding partnership with Dassault Systemes and its Delmia business unit. The minority investment of Dassault Systemes in Intercim in 2009 was a clear sign of the future. The vision of the integration from design to shop-floor was already part of the Pertinence management vision in 2005! It just took some time to make it happen.

The valuation is $36,5M for the enterprise value (equity and debt) which is good multiple in the current enterprise software sector (current EV/Sales multiple are between 2 and 3).

official press release is here.

Frederic Halley