Update: RightNow Makes SaaS Progress

RightNow, a CRM (customer relationship management) developer, gave skeptics reasons to believe companies can successfully leap from traditional software to newer software as a service (SaaS) business models.

Although RightNow wasn't profitable in its most recent quarter, the company's financial results easily beat Wall Street's expectations. Here's the scoop.

  • Total revenue in the first quarter of 2008 was $32.9 million, a 28% increase over $25.7 million in the first quarter of 2007.
  • Net loss in the first quarter of 2008 was $(3.4) million, compared to a net loss of $(6.0) million in the first quarter of 2007.
Both figures impressed Wall Street. But the good news didn't stop there. Jeff Davison, CFO, raised his quarterly guidance to Wall Street pundits, insisting that RightNow's shift to predictable, recurring revenue is accelerating.

I'm not suggesting that SaaS and managed services are identical. But they are close cousins. And RightNow's performance provides hope to MSPs that are making the transition from traditional customer contracts to recurring, monthly service level agreements (SLAs).
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