Tioga Venture Blog

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).

 

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

AFDEL : Croitre à l’international par acquisition

Dans le cadre de l'AFDEL, la prochaine réunion de la commission internationale aura lieu le mercredi 16 mars de 17H à 19H dans les locaux de l'AFDEL. Lors de cette réunion, nous aborderons le sujet de la croissance à l'international par acquisition. Si le sujet du développement à l'international est une évidence pour de nombreux éditeurs français, la manière de le faire est souvent moins claire. La croissance organique est plus sure mais plus lente et peu de dirigeants ont une véritable expérience de fusion-acquisition, encore moins à l'international. Les intervenants qui partageront avec nous leur expérience sont :

• Jerome Malavoy, CEO de Trace One
• Bruno Tourme, Managing Director de Bryan Garnier

La participation est réservée aux membres de l'AFDEL. Inscription directement auprès de l'AFDEL.

Frédéric HALLEY

L’innovation au profit de l’industrie française : l’acquisition de Vizelia par Schneider Electric

L'acquisition de Vizelia par Schneider Electric est un exemple à méditer pour plusieurs raisons.

Rappelons d'abord le contexte : Vizelia est un éditeur SaaS, qui a construit au cours des dernières années « Vizelia  Green », dont l'objectif est de gérer dynamiquement l'énergie des bâtiments. D'un point de vue technologique, la solution est entièrement développée en technologie Microsoft .net ; le mode Saas apporte une grande simplicité et flexibilité, la gestion d'une multiplicité de capteurs dans une multiplicité de bâtiments, et permet ainsi un benchmarking instantané des performances énergétiques.

Dans cette acquisition, la  première source de méditation est le mariage de l'innovation et de l'industrie « classique » ; Schneider, en tant que spécialiste mondial de la gestion de l'énergie, trouve à travers Vizelia une solution différentiante par rapport à ses concurrents. Vizelia peut maintenant déployer sa solution dans le monde entier grâce à la présence internationale de Schneider Electric.

La deuxième source de méditation est la nationalité de l'acquéreur,  à une époque où l'on a tendance à penser qu'un acquéreur de solutions technologiques ne peut être que de l'autre côté de l'Atlantique. Nous avons ici l'illustration d'une forte création de valeur, grâce à la forte présence internationale de Schneider. Cet exemple est une source de réflexion pour d'autres acteurs mondiaux du CAC40, qui pourraient renforcer leur position dans le monde à travers des acquisitions de technologies innovantes.

Tioga, qui a conseillé Vizelia depuis plus de 5 ans, souhaite un grand succès à Vizelia et à Schneider Electric dans la création d'une position de leader mondial sur la gestion de l'énergie dans les bâtiments.

Julien MAZEROLLE

AFDEL : A la conquete de l’Amerique

Dans le cadre de la commission internationale de l'AFDEL, la prochaine réunion animée par Tioga Venture aura lieu le lundi 6 décembre à 14H sur le thème : « Les Etats Unis, rêve ou passage obligé de l'expansion ». Pour les éditeurs français, l'expansion en Europe est souvent une étape naturelle du développement. Les Etats Unis représentent en revanche une étape majeure tant par son potentiel (le plus grand marché du monde) que par sa difficulté. Sans compter le mythe de la Silicon Valley, très présent dans notre industrie.

Pour débattre et partager les expériences sur ce sujet, le panel d'intervenants comprendra :

• Philippe Collombel, associé de Partech International, fonds franco-américain bien connu pour avoir accompagné de nombreux éditeurs dans leur développement aux Etats Unis
• Alain Baritault, Journaliste Economie et Technologie et Directeur du Founder Institute à Paris, qui habite dans la Silicon Valley depuis plus de 20 ans et connait parfaitement le milieu de la tehcnologie aux US.

Comme d'habitude, la commission est réservée aux adhérents de l'AFDEL. Inscription directement auprès de Fabrice Larrue de l'AFDEL.

Frédéric HALLEY

AFDEL : Comment démarrer à l'international

Dans le cadre de la commission internationale de l'AFDEL, la première réunion de la commission aura lieu le 22 octobre 2010 à 16H30 dans les locaux de l'AFDEL. Le thème de cette première rencontre sera double :

1. "Comment démarrer à l'international" avec le témoignage de Jean Noël Grandval, cofondateur de Instranet (éditeur franco-américain racheté par salesforce.com en 2008). Jean Noël reviendra sur son expérience d'entrepreneur face au développement international en Europe, aux US et dans le reste du monde.
2. Zoom sur le Vietnam avec une présentation de Sylvain Biard, conseiller export filière NTIC Ubifrance Vietnam.

   

Comme toutes les commissions de l'AFDEL, cette réunion est réservée aux membres de l'association ; mais il n'est pas trop tard pour adhérer.

Frédéric HALLEY

Tioga renforce son soutien à l'AFDEL

A titre individuel, les associés de Tioga Venture ont supporté l'AFDEL (Association Française des Editeurs de Logiciel) depuis sa création. Ce support s'est renforcé l'année dernière quand nous sommes devenus officiellement partenaires (communiqué de presse de septembre 2009). Ce partenariat s'est encore renforcé cette année puisque Tioga Venture prends la présidence de la commission internationale. Nous sommes très heureux de pouvoir contribuer au développement de l'industrie du logiciel en France de cette manière. Le développement à l'international est traditionnellement une étape difficile à franchir pour de nombreux éditeurs. Néanmoins, la taille limité du marché domestique rends le plus souvent ce développement nécessaire.

Dans les différentes réunions de cette commission nous nous concentrerons sur le partage de bonnes pratiques et l'échanges d'expériences avec en complément des zooms sur certains pays. La première réunion de la commission aura lieu le 22 octobre (ouverte uniquement aux membres de l'AFDEL).

Frédéric HALLEY

Dassault Systemes vs Google?

Yesterday, the top news in the French high-tech community was the acquisition of Exalead, an enterprise search company, by Dassault Systemes, the leading PLM software vendor, for 135M€. The good news was a significant exit for a French Startup. If the VC market has been flushed by money driven by tax loopholes, the exit market has been going through a much drier spell. It also means that Exalead leading technology can accelerate its distribution through Dassault Systemes and its customer base.

However, this is a very surprising deal. The rational of the acquisition as described in the official press release is very light. The core market of Dassault Systemes is still in the discrete manufacturing space (Automotive, Aerospace) and the complementarity between their PLM suite and a search engine is not that obvious. Yes, Dassault Customers can benefit from Exalead technology but a distribution agreement would do the same. If it is a pure technology diversification, Exalead is small (16M€ revenue allegedly) and will not impact materially the EPS.

The more surprising comments on the deal both official and on the web are about Exalead. There is no doubt that Exalead has a good technology and has been fairly successful. However, presenting it as the French Google is a major distortion of reality:

1. Exalead is not a consumer search engine driven by advertising. It is mostly an enterprise search company. Its real competitor are indeed Google and Microsoft but mostly Autonomy. Autonomy is a UK company worth about 5Bn€ (close to Dassault Systemes' market cap of 6Bn€) with revenue that should be close to 800M€ this year.
2. Exalead has relied on significant state financing from the French state via Quaero, the ill-fated state initiative to build a French competitor to Google. Exalead was the number 2 recipients of state subsidies with 19M€ behind Technicolor. We are very far from the Darwinian model of innovation of Silicon Valley

The undisputed winner of the day is Qualis a financial holding which owned 69% of Exalead. Congratulation to them! And good luck to Dassault Systemes in their diversification and their future fights against Autonomy, Google and Microsoft.

Frederic HALLEY

Microsoft European Bizspark summit : B2C vs B2B

Last tuesday was the 6th Microsoft Bizspark European summit on growth and entrepreneurship. It was located in the Microsoft campus in Paris and was hosted by Guy Kawasaki. Among the different presentations, the major one were :

• presentation on innovation by Guy Kawasaki
• a keynote of Jean Philippe Courtois, president Microsoft International. Presentation videos here.
• a startup competition featuring 18 companies
• a presentation on Web Api by Douglas Purdy
• A general discussion with Bernard Liautaud

Comments were unanimous : the event was a major success! Great organization (maybe except the food that was a little scarce), good networking with many of the European Venture Capitalists present, as well as many entrepreneurs and Bizspark network partners. The different Microsoft presentation illustrated the amazing scope and network that Microsoft has developed to push and support innovation and startups. In a few years, what started as Idees in France with 40 startups, has become a worldwide program covering 30 000 companies.

Among the startup presenting, a few standout by the quality of the presentation of the business momentum they already have. I am fully in line with jury on the two best companies of the day :

• kobojo, a social gaming company in the line of Zynga and Playfish. Great execution on an extraordinary market.
• Artesian, a Saas solution complementing traditional CRM solutions to provide relevant data to salespeople.

Among the other companies presenting, here a couple of personal pick :

• Captain Dash, with a great demo on visual mining, data analysis,
• moneydashboard, a UK me-too of Mint
• Sordu, a turkish elearning platform
• Time cockpit, a time management software

Overall, few stellar breakthrough new ideas or concept but a group of solid companies with interesting ideas or technologies.

Most interestingly is the split of the companies between B2B and B2C companies. Most companies driving innovation, and getting funding, are B2C companies. Social media and gaming have first taken up as B2C play before getting into the B2B space. That is what we call "the consumerization of innovation". This trend started several years ago and has continuously accelerated since that. At the Microsoft Bizspark summit, only 4 out of 18 companies were B2C companies. This is probably representative of the Bizspark companies where B2B are predominant. This also reflects the current Microsoft business which is heavily tilted to B2B with B2C a somewhat a lesser business. It is also clear what B2B startups would gain from being in Bizspark : access to technology, credibility toward prospects and customers, being part of the Microsoft ecosystem. For B2C startup, the value is much less clear.

For more information, here are a few fellow bloggers reporting on the event :

• Olivier Ezratty, Opinions Libres (FR)
• Pierre Olivier Carles (FR)

Frederic HALLEY

Go East (and South) young man

The following post is the translation of an oped we contributed to the AFDEL (French software vendors association) December newsletter. Although, this article was originally targeted at French software vendors, we believe the idea to be very relevant for most European software vendors.

As the crisis seems to be coming to an end, the key question for businesses is when and where will the recovery happen. The French economy seems to have bottomed out and many experts are predicting a slight growth for the coming quarters. For software publishers, the question is now how to take advantage of it and where to invest.

Historically, many French software vendors have focused their international development in the U.S. and other developed countries. While it is true that the U.S. market is the largest homogeneous market for high technology, it is now mature and saturated. Operational difficulties for medium-sized publishers are real, both for recruiting and managing a good team as well as for the intensity of competition. Growth in Europe is hampered by fragmentation of markets in language, legal framework and competitive levels.  Moreover, the growth rates expected in Europe in 2010 are modest: from -0.5% in Spain to +1.6% in Germany - and +1.5% in France (source: The Economist). The software industry is now mature in these markets and initial equipment has now been replaced by support and maintenance contracts that are themselves under strong price pressure.

However, there is hope in the east and south: in the emerging countries, particularly but not only in the BRICs. It already appears that the way out of the global crisis will mainly be driven by the recovery in consumption and investment in emerging markets. Even in 2009, the GDP of China will grow at 8%, a level never reached by developed countries over the past 20 years. The expected GDP growth rates in 2010 are:

–     China: +8.5%

–     India: +6.3%

–     Brazil: +3.3%

–     Russia: +2.5%

Major software vendors, including US vendors, have already started to conquer these markets. In France, these countries, including China and India, have been considered providers as low cost engineers’ labor pool. The outsourcing of certain functions including IT development remains an important issue but whose success is far from guaranteed. Beyond these possible reductions in development costs, it seems important to consider these countries as markets to conquer in the short term: software is a revenue game more than cost cutting game. This approach is easier for the biggest companies who can simultaneously take on multiple countries leveraging their customers’ and partners’ networks. For medium-sized vendors, human and financial investments will be significant, but the risk profile seems favorable in the current macro-economic environment thus justifying the investment. Among the best practices of expansion in emerging countries developed with our clients, the simplest are often the best:

–     Follow-up customers. Any development in a new market is risky.

Capitalizing on major clients is a must. It is always easier to open a new country with a portfolio of clients in deployment. They will provide the basis for creating a team then a dynamic growth. Their local experience may prove useful in very different cultures. This rule also applies to partners and distributors. The more you go along with your usual ecosystem, the better the chances of success and the lower your risk.

–     Target markets. For a medium –sized software vendor, it is difficult to have the resources to address all these markets. The selection of target countries, or regions when China and India are concerned, is a key issue. The verticals vary considerably from one country to another (Aeronautics and commodities in Russia, manufacturing in China, services in India ...). Economic and demographic characteristics of targeted regions are important points to be included in the analysis process before making a decision.

–     Adapt your business model. While sales cycles are rather shorter in emerging countries, it is often necessary to adjust the original business model. The upfront investment in license are rarer, customers preferred rental or risk-sharing. Working with partners and customers already implanted allow finding the right mix before investing in a more significant deployment.

The expansion in emerging countries is not without risk. In addition to the necessary investments, the challenges of operational execution and focus are always present. The risk is overall higher than a geographical expansion in a European country but the long term potential is incomparable. The economic crisis is in this case an opportunity to redirect investment strategically.

The development of software vendors that will happen through the economic recovery in France will be moderate; on the contrary, the vendors looking for strong growth opportunities should now focus on emerging markets. Many companies are well positioned to target these markets now and be back on the growth path. The opportunities are theirs to seize.

Frederic HALLEY

Cocktail AFDEL à Wimbledon

Pour une fois sur ce blog, un post en français pour un sujet français : le compte rendu du cocktail de l’AFDEL à l’ambassade d’Angleterre le mercredi 8 juillet.

Première découverte de la journée : il existe en plein Paris un terrain de tennis en gazon, comme le centre court de Wimbledon. L’accès reste difficile puisqu’il vous  faudra l’accord de l’ambassadeur de sa majesté pour pouvoir disputer quelques sets entre amis, mais c'est toujours bon à savoir.

Au programme du cocktail de l’AFDEL du 8 juillet, pas de tennis, mais la présentation du partenariat avec le FSI. Après l’introduction de monsieur l’ambassadeur, les présentations étaient assurées par Patrick Bertrand, président de l’AFDEL (et DG de CEGID) et Gilles Michel, DG du FSI. Dans l’assemblée studieuse, de nombreux dirigeants d’éditeurs français ou filiales de grands groupes internationaux.

Pour mémoire, le FSI est le fonds souverain dont la France s’est doté récemment et a pour vocation à investir dans des secteurs stratégiques. La bonne nouvelle de cette journée est que le FSI s’est intéressé très rapidement au secteur du logiciel qui est traditionnellement peu visible de nos instances gouvernementales. Les investissements du FSI ne seront pas uniquement « béton – bagnole » mais aussi High Tech. Parmi les premiers exemples, on notera notamment Gemalto et Nexans (pas vraiment logiciel, mais c’est déjà de la high tech). Reste à espérer que le FSI déploiera aussi des investissements sur des sociétés de taille moyenne. En effet, si les petites sociétés peuvent se financer assez facilement avec les fonds ISF et FCPI (voir le très bon blog de Jean Rognetta sur le sujet ici), il est par contre nettement plus difficile de trouver des tickets entre 10M et 100M€ pourtant nécessaire pour assurer la croissance internationale des entreprises de taille moyenne.

Pour plus de détails sur le partenariat et le communiqué de presse officiel.

Réjouissons nous donc de cette excellent initiative et attendons les résultats concrets.

Frederic HALLEY

Hats off to Instranet

One of the difficult thing in the marketing of a management consulting firm is that you cannot really discuss your customers and what you have done for them. Part of the job is not taking any credit for what you have done. It makes it even better when we can communicate on the success of some companies we worked with some time ago. Instranet (www.instranet.com) for instance was a customer of us many years ago - high tech years are like dog years. Instranet was started in 1999 by Business Objects employee number 1, Alex Dayon. They started as a content management software and web publishing vendor. Through the early 2000s Alex and his team refocused the company on being a niche CRM vendor focusing on complex customer support such as telecom.

In the summer 2008, Instranet was acquired by salesforce.com for 31M$ to complement its CRM offering. Interesting exit as Salesforce is not a very acquisitive company and hasn't done much shopping in Europe. Hence my congratulations to the Instranet team for what they have accomplished over the last 10 years.

What is strinking in Instranet's story is the quality of its management and, something very rare, its stability. The top 3-7 people who have been instrumental to the success of the company had been there since the very beginning. Interestingly so, most of them are still at salesforce.com close to one year after the acquisition.

You can find an interview of Alex Dayon here : http://www.neteco.com/286174-alexandre-dayon-salesforce-instranet-pme-comptes.html.

Details on the deal are available on the instranet web site.

Frederic Halley