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Why should we think smaller cloud/SaaS companies will survive, financially? (Webinar Attendee Question)

Asked on May 9, 2013

This question was asked by an attendee during the Proformative webinar "The Evolving Role of Finance Leaders: Owning Technology" held on November 14, 2012. A video of the webinar can be viewed here: https://www.proformative.com/resources/webinar-video-evolving-role-finance-leaders-owning-technology

Answers

Tom Kelly Managing Director • November 15, 2012

You shouldn't. As with any purchase you need to do your diligence. That said, in some cases the lower cost of a Cloud based product and the efficiency gained from adoption may outweigh the risk of using an application for a newer Cloud entrant. Every company's situation is different in this regard so the standard "Trust but Verify" applies.

Kelly Battles CFO • November 28, 2012

There is always a risk in selecting vendors and again due diligence is important.

Example areas to explore are how long has the vendor been in business? Is the company self- funded, Cash flow positive? If not, are they growing (high growth tends to attract strong investment) and do they have well-known investors with access to additional capital? Do they have enterprise class customers who have done the due diligence before youand selected the vendor? I agree with Tom, trust but verify!

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