I had the opportunity to attend the 2014 user conference and things feel different. I've been following Saba for more than 14 years now (I used client/server version – Saba 3.0), and the company has been through a lot.
Saba pioneered the enterprise, multi-domain learning management system. They have some of the most complex and difficult large global customers. The company acquired Centra and built out its own online meeting software. They work with nearly every content provider. They have always had strong support for customer education (the original Saba data model called a course a "product"). The company's compliance and certification system is among the most sophisticated (and complex) in the industry. And for many years Saba has been investing in collaboration and social learning features.
Almost 8 years ago Saba entered the HR software market with its first implementation of performance management. The original design has been completely changed and now Saba now offers an integrated suite of talent management capability, including a new recruiting system with many advanced features. This week they launched a new version of the company's enterprise compensation management system. The company has pioneered enterprise collaboration (and had some false starts along the way), and now offers a very interesting new tool called TIM (The Intelligent Mentor) that helps you find the course you need (a badly needed "recommendation engine" which every LMS should have). When Saba acquired Human Concepts they also obtained a leading HR analytics tool, albeit one which has not yet been adapted to manage big data.
As with all pioneers, Saba had many challenges. The company is the only LMS vendor that has adapted from client/server to web/java to cloud. The company had many senior executives come and go over the years (at least one VP of marketing for each year I've worked with the company). And most recently, Saba has been under the cloud of restatement of earnings – which is expected to be completed by the end of this calendar year.
That all said, I believe Saba is on the comeback trail. While the company may not grow as fast as companies like Workday, CornerstoneOnDemand, or SuccessFactors, they are a force in our marketplace. Many of the world's largest companies rely on Saba for their global learning platform, and more are signing up. And the new management team – led by Shawn Farschi – represent a young fresh team of cloud experts, many of which come from Webex and other highly successful cloud companies.
A few statistics the company shared with me this last week:
- In the last 12 months, Saba acquired close to 200 new customers
- Saba now has over 2,200 total customers, 700 of which are using talent related products
- Over 800 of Saba's customers are now on the cloud, and many are moving from license to cloud (Saba Cloud)
- Saba has 31 million licensed users (one of the largest talent management footprints) with 12 million + on the cloud
- Today 88% of Saba's revenue is cloud-based (vs. licensed) and only 15% of its revenue comes from implementation services
- In the last 12 months 60% of the company's new customers are mid-market or SMB.
The learning management systems market is one of the fastest growing segments in HR software – we estimate that the market grew by over 11% last year (one of the fastest growing years in corporate training) and will soon publish our estimates for the coming year. It's over $2 billion now and while there are more than 200 players, only a handful have the capability of managing the level of complexity that global enterprises need. (These include SuccessFactors, Oracle, CornerstoneOnDemand, SumTotal Systems, and others.)
In all my years as an HR analyst, one thing I've learned above all else: it is always the management team and company culture that creates success. The barriers to entry in the HR software market are lower than ever (three engineers with an Amazon Web Services account can build a fantastic product), so it's customer focus and understanding, leadership, culture, and passion that drive success.
For many years Saba struggled to evolve its product strategy, absorb acquisitions, and reposition itself into the talent management market. Now, with a new management team, the company seems to have gotten out of its own way and has a feeling of success and alignment again. While this is a highly competitive market and Saba still has a lot of customer trust to rebuild, the new management team is on the right track. The market is red hot, so there's plenty of room for many vendors to thrive.