5 Reasons Why SaaS Companies Can’t Use Third Party Software Out of the Box

In the late 90’s and early 2000’s, companies like Yahoo and other consumer web companies were experiencing an unprecedented scale challenge –more than a hundred million users were using their web application. This was a scale that had never been seen before by makers of traditional software components and products. Shrink-wrapped products and platform components were written for large organizations and offline bulk processing and thus could not scale.  From outside, I used to hear that Yahoo had to develop everything on their own since no third party software could meet their scale needs. Later on, I worked at Yahoo and saw first hand the scale challenges and built technology platforms to address them.

When I started at Jobvite in 2008, we started to bring in open source technologies and gradually phased out proprietary technologies because we wanted to build a platform that would scale for millions of users without breaking the bank. Back then, Jobvite’s application served 40,000 users. Today, Jobvite’s recruiting platform serves nearly 50 million users.

Although the majority of our platform stack is based on open source technologies, we have come across situations where we’ve had to look for a third party paid software component because either there is no open source alternative and/or we do not want to get distracted from our core. When we start to look at third party technologies, we hardly find anything that supports the fundamental building blocks of SaaS. Hence we are forced to build from scratch on our own or do major re-architecture of a third party component.  Here are the five reasons why Jobvite and many SaaS companies can’t use third party software out of the box:

1. Multi-Tenancy
2. Security Model
3. Scale
4. Scope
5. Customizations and personalization

- See more at: http://blog.jobvite.com/2014/05/5-reasons-why-saas-companies-cant-use-third-party-software-out-of-the-box/#sthash.zCyL91tq.dpufSee more at: http://blog.jobvite.com/2014/05/5-reasons-why-saas-companies-cant-use-third-party-software-out-of-the-box/#sthash.2slydneS.dpuf

Should a CTO read 10k, 10Q and S1 filings?

A CTO plays a very strategic role in a technology-based company – from being a technology visionary that is responsible for the “big picture” to leading Research and Development (R&D). Depending upon how the organization is setup, a CTO’s charter will include at least the following:

• Think big and worry about the future before the future becomes present
• Partner with CEO, head of product and the exec team to set the strategic direction of the company
• Align technology and the company’s core competence with the company’s business goals
• Identify opportunities and risks for the business
• Manage research, product development and site ops
• Communicate and evangelize the company’s technology vision and product strategy to partners, management, investors and employees

Broadly speaking, all CTOs, CEOs and board members will agree with the above charter. However, in my view there is another critical area that demands a CTO’s attention – finance.

CTOs need to be finance savvy and understand how Cost of Goods Sold (COGS) and gross margin impact the future of their company. For a SaaS company, like Jobvite, COGS comprises of hosting/site operations cost, third party technology license cost and customer support cost. An efficiently managed organization will keep the COGS in the 25%-30% range of the total revenue (of course COGS will be higher in the early stages of the company when the company has little or no revenue). Lower COGS means higher gross margin (gross margin is defined as a company’s total sales revenue minus the cost of goods sold divided by the total sales revenue).  Higher gross margin means you have more money to invest in R&D, Sales and Marketing or other functions of the company. Hence you have the ability to accelerate the growth of your company through new product development or investment in sales or brand marketing. Higher gross margin is a competitive advantage and it generally translates into higher valuation for the company.

- See more here:

Twitter, Box, and Dropbox attracting hordes of employees away from tech giants

Google, Microsoft, Cisco, and Apple lost a significant chunk of workers to startups in 2013.

Jobvite released a report today on hiring patterns in the tech industry, and it found that tech giants have lost their luster for many employees.

“Jobseekers do not hesitate to ditch their cushy jobs to move on to growing, trendy, fast-paced startups with the expectation to work on cool new things and increased financial prospects,” Jobvite chief technical officer Adam Hyder told VentureBeat. “Bigger companies lose their luster and culture over a period of time, and employees hate to work on products that generate high revenue but are stagnant.”

You can read more at VentureBeat....

Analyzing Hiring Data: How do I Fare?

12/17/2013 | By Adam Hyder

Last month, I wrote a blog on hiring ratios. In order to come up with these ratios, I looked at Jobvite’s Big Data, an infrastructure comprised of a large sample of aggregated Jobvite customer data and gleaned some solid facts.  As I started to look at the data I started to ask few questions to myself:

1. How long does it take to hire an engineer?

2. I know it is hard to hire engineers here in the valley. But how hard is it relative to hiring for other functions?

3. Are we the only ones who are selective in hiring?

4. How does Jobvite fair compared to others?

As I started to analyze the data, not only I was able to find answers to my questions, I was also able to find many more interesting observations that are worth sharing. 

It takes twice as much time to hire an engineer than it takes to hire a customer support specialist. Take a look at the table below.

 More than 90% of Jobvite customers are hiring engineers. Companies receive far more applications for Marketing and Product functions than for engineering functions. In the table below, you can see that companies receive almost 1.5 times more applications for marketing positions than for engineering positions: 

Engineering jobs in the Bay area are in San Francisco, Mountain View, Santa Clara, Sunnyvale, and Palo Alto.

Most Engineering jobs outside the Bay Area are in Austin, New York, Seattle, Chicago, and Indianapolis.

Thus, analyzing recruiting analytics can help you benchmark your hiring efforts and discover trends within your industry.

- See more at: http://blog.jobvite.com/2013/12/analyzing-hiring-data-how-do-i-fair/#sthash.Sg4PYc2W.dpuf