rSmart is an early stage software company with an open source development model ... our products are enterprise business applications ... like Compiere, xTuple, and SugarCRM ... that we develop with an open source community ... and then make a business out of supporting them commercially for Education enterprises ... we do that On-Premise and On-Demand
Sakai is the community brand for the academic/eLearning system Our product, the rSmart Sakai CLE... ... is an enterprise collaboration suite. ... it provides institutions an ability to put courses online ... augment regular classes with technology ... and address growing demands for accountability by aligning student work with learning outcomes. ... these are the key capabilities it competes on today ... but it’s a more general enterprise collaboration suite that is also being used for ... research collaboration ... and general group collaboration It’s also built on a modern service-oriented Java Enterprise Architecture
CLE Average $65K (25/40), $2B addressable KFS Average $.5M (57/450), $2.2B addressable
So to summarize the business model... We have 2 products ... the OS development model affords us a very efficient use of R&D dollars ... the products have an outstanding fit with the market requirements ... and our immersion and leadership in the community makes it a great sales channel for us Our customers (universities, k-12 schools and districts, corporate learning entities) ... pay us an annual subscription to use our commercially maintained and supported versions of the software So our #1 metric is monthly recurring revenue. We also pay close attention to how much of that we’re delivering On-Demand (about 50% today and we aim to increase that) Our target is to have an 80/20 revenue mix favoring subscription revenue We generate leads through telemarketing, through the community, using the common web techniques, and through campaigns with partners... we use an “inside sales” model to work the pipeline.
I mentioned earlier that we have an open source development model ... so the communities that we use to develop our products are of great importance The Sakai and Kuali communities are patterned after one another ... and somewhat unique among open source communities. The Kuali community is the result of significant investment. ... leading institutions like Indiana U, Michigan State, UC, MIT, and UBC... ... are the Nucleus attracting many peer institutions to invest in ... several major community development projects under the Kuali brand We’ve formed a not-for-profit “Kuali Foundation” to hold the IP, and employ a modest staff. ... the responsibility is to facilitate the work of the institutions developing the software ... QA, Project Management, Collaboration and shared development Infrastructure The key is that these projects are sustained by major institutional commitment. The hundreds of people developing the software aren’t volunteers . They’re employees of these member institutions. ... and of rSmart. We’re deeply immersed and in many ways considered a peer among the institutional leaders. ... we are one of the founders of the first project (KFS) ... we hold board of directors seats ... we participate in the architecture and engineering leadership ... and we participate in the functional leadership. ... So this community is our product development and innovation engine. We take the output... the software ... and we make it commercially consumable. We do that by packaging several software components, ... providing implementation support, ... integrating it with other key information systems ... software maintenance and updates ... support and troubleshooting for business and technical users ... providing legal assurances ... and we deploy the software either: On-Premise, On-Demand (as a service), or as a Managed Appliance. --------------------------- Investment Summary $7.3 initial project (2.5M from Mellon) in 2005 $37.5 for Student $1.5 from Mellon on KRA $4 ?? (Brad’s IM) 40+ institutions is the number that are attending Kuali Days.
Overview <ul><li>April 2010 </li></ul>
rSmart provides tremendous support of open software created by education communities
Enterprise software created by the higher education community Financials Student HR ✓ ✓ <ul><li>rSmart Sakai CLE ENTERPRISE COLLABORATION AND LEARNING </li></ul><ul><li>Blended eLearning </li></ul><ul><li>ePortfolios </li></ul><ul><li>Project and Research Collaboration </li></ul><ul><li>rSmart Kuali Financials COMPREHENSIVE ENTERPRISE </li></ul><ul><li>FINANCIAL SYSTEM </li></ul><ul><li>Scales for all institutions </li></ul><ul><li>Service oriented, modular design </li></ul><ul><li>Enterprise workflow </li></ul><ul><li>Business intelligence </li></ul>eLearning
Market Size <ul><li>34,500 institutions worldwide </li></ul><ul><li>Addressable market </li></ul><ul><ul><li>Sakai Avg: $65K </li></ul></ul><ul><ul><li>Kuali Avg: $500K </li></ul></ul><ul><li>eLearning market only 10% penetrated </li></ul>source: ??? source: Robert W. Baird & Co. 2009
Business Model Financials Student HR eLearning ✓ ✓ <ul><li>2 community developed products </li></ul><ul><li>Very efficient & orderly R&D </li></ul><ul><li>Community “sales” channel </li></ul><ul><li>Built by education for education </li></ul><ul><li>Subscription Revenue Model </li></ul><ul><li>“ Red Hat” for Education </li></ul><ul><li>Support / maintenance based subscription model </li></ul><ul><li>Key metric is (MRR) Monthly Recurring Revenue </li></ul><ul><li>65% SaaS </li></ul><ul><li>Target 80% subscription, 20% services </li></ul><ul><li>Heavy services early in the lifecycle </li></ul><ul><li>Route to Market </li></ul><ul><li>Inside sales </li></ul><ul><li>Community </li></ul><ul><li>Web (SEO, Downloads, Online Trial, Webinars) </li></ul><ul><li>Partners </li></ul>
Community Engagement <ul><li>Kuali - $50M Invested, $10M in July & August </li></ul><ul><ul><li>40+ leading universities - Indiana, Michigan State, Cornell, University of California, MIT, Carnegie Mellon, University of Washington, USC, etc. </li></ul></ul><ul><li>Sakai - $12M Invested, new resources dedicated last week for next version </li></ul><ul><ul><li>200+ institutions on six continents </li></ul></ul><ul><ul><li>Cambridge, Charles Sturt (AU), Georgia Tech, NYU, Stanford, UC Berkeley </li></ul></ul>Factors Driving Investment Sakai Community Survey, March 2009 Very Important Somewhat Important Greater benefit from our resources through collaboration 78.4% 21.6% Institutions should own the learning platform 56.8% 35.1% Institutions are best able to develop to needs 55.6% 38.9% Investing institutions are best able to innovate 43.2% 29.7% Cost of ownership is reduced 22.2% 36.1% We cannot trust proprietary vendors 16.2% 45.9%