SaaS Keeps Recession Wolves at Bay: Q&A With E2open CEO Mark Woodward

It is has been a roller-coaster year for E2open CEO Mark Woodward, mainly because that is how long he has been at the helm of the Software as a Service provider of supply-and-demand chain, procurement, and B2B integration applications.

Over the past twelve months at E2open, the erstwhile senior advisor to Blackstone Private Equity Group oversaw a shift in product focus and the introduction of new functionality, primarily on the sell side.

“In fact, we’ve rapidly closed three large deals recently because of pent-up demand for functionality in this area,” Woodward said.

CRM Buyer caught up with Woodward on the eve of his first year anniversary at the firm to discuss how the recession has affected E2open and what he thinks the next 12 months will be like.

CRM Buyer: How is E2Open weathering the economic downturn?

We are doing very well, and part of that is because we are a SaaS offering. That doesn’t mean we don’t have to fight for every dollar — but in the most recent quarter, our business activity was up 28 percent. Also, business for the first half of the year compared to the same period last year will be up 35 percent.

CRM Buyer: What are some of the cost-cutting measures you’ve taken?

Certainly, we want to make sure we are being cautious with the use of our cash, so we are restricting travel as much as possible. We were also fortunate that our lease was coming up for renewal — we were able to get a new lease lowered by 60 percent.

We are also watching our hiring. We may not fill an open position, for example, unless it is absolutely necessary. Also, the solution we offered in the past required a lot of service — we’ve made changes so our application can be implemented with a lot less human effort. So, we’ve been able to scale down significantly in our service organization.

CRM Buyer: How can your products help your customers’ bottom lines in the near term?

First of all, because we are SaaS provider, we cost much less up front in licenses and in becoming live. This allows customers to realize a more rapid ROI with much lower costs.

CRM Buyer: What are some of the bright spots for your company right now?

As I said, we have gone through a bit of change in the way we deploy technology. Before, the company was a bit more project-focused, and each customer’s implementation was different. Last year, we went to a more product-focused orientation with a standard solution.

CRM Buyer: How will your company look a year from now?

We are certainly trying to grow. We are looking at ways to expand through partnerships or through new acquisitions.

CRM Buyer: In what functional areas?

I can’t get into that.

CRM Buyer: Which is more likely, an acquisition or development?

That is hard to tell. We are very close to getting the company on a predictable growth slope. In the last three quarters, we have shown great year-over-year growth, so we are in a position where we can start making those kinds of decisions shortly. It comes down to price relative to market opportunity.

If we could find a SaaS-based solution that fits well with ours, that would be my preferred way to grow, because we can also acquire a customer base, it is faster, and so on. But at the same time, we have our CTO and head of R&D looking at ways to do these things better ourselves.

CRM Buyer: You made a significant shift in product focus and implementation over the last year. Are there any other major changes for the company in the pipeline?

We want to see how we can put more of our solution in the cloud. We’ve already moved a couple of portions of it into the cloud; we’ve done quite a bit of virtualization, for instance. We believe we can dramatically reduce our operating expenses by deploying even more that way.

CRM Buyer: You offer a wide range of functionality. Who is your closest competitor?

SAP. In terms of enterprise class functionality, they are our biggest competitor. They are mainly premise-based, though.