Jun. 19, 2009 (The Hindu Business Line) --
K.V. Kurmanath
Hyderabad, June 19 SumTotal Systems (NASDAQ:SUMT) , which provides talent management solutions, has decided to tap the opportunities in the emerging sectors such as insurance, retail and telecom through SaaS (software-as-a-service).
“We recently launched the SaaS initiative as we rope in new clients for our talent and performance management solutions, particularly to small and medium businesses and enterprises (SMBs and SMEs),” Mr Anupam Pahuja, Managing Director of SumTotal Systems India, told Business Line.
The model would help SMBs and SMEs as they compete with bigger companies, which could afford to buy licences for using solutions at a huge price.
SumTotal recently entered into a merger agreement with Vista Equity to allow the latter to acquire all its outstanding shares at $4.85 a share. The deal is valued at $160 million.
The deal had attracted corporate attention as Accel-KKR was also aiming to acquire the company. SumTotal had agreed to pay a termination fee of $6.67 million to Accel-KKR to facilitate its deal with Vista.
Cheaper option
According to Mr Pahuja, companies and organisations could deploy the talent development solutions at a price 10 times lower in the SaaS model. “Smaller companies can subscribe to SaaS versions and still enjoy the benefits. They need not bother about the operational expenses, besides getting the solutions at a low cost,” he added.
Gartner forecast that SaaS revenues would grow to $9.6 billion in 2009 from $6.6 billion in 2008, showing a growth of 22 per cent.
With the industry showing inclination to this cheaper option, SumTotal Systems was also developing applications on SaaS model to sell the talent and performance management solutions.
Giving an example of insurance company, he said companies could train thousands of its associates and agents at multiple locations across the country without having to spend huge amounts on travel and accommodation.
“They can use our platform and train their staff by using cyber cafes,” he added.
SumTotal has begun talks with partners such as human resource consulting firms and those offering HR outsourcing services to corporates.
