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Lars Dalgaard, Founder & CEO




      Stanford Engineering School
             May 11 2009
About the CEO…
My Journey                              Stanford, CA
                Switzerland
                  U.S.A.




                              Germany
                              Holland


  Denmark
                                                       San Mateo, CA




Not long ago…


                                                           2001-
about SF
we’re in business
A company’s
workforce is
approximately 70%
of its operating
expense        Getting There, a whitepaper from
               KnowledgeInfusion/SuccessFactors
The strategy / execution gap
                                                        High




      95%
      50%
      of employees
      don’t understand
      of the average
      their company’s
      employee’s time
      strategicon non-
      is spent goals
       productive work
       Corporate StrBalanced Scorecard: Norton/Kaplan
       ategy Board: Measures that Matter




                                                        Low
Challenges in cultivating top talent


       71%
       86%
       of employees say
       that when they do
        of the workforce
       a good job, their
        is disengaged
       performance is
       not rewarded


         Watson Wyatt: Work USA Study
Challenges in workforce optimization



       84% of large
       global companies
       say they are not
       using their
       workforce to their
       full potential
SuccessFactors Integrated Applications
Old Model                          SaaS
                 Big upfront costs including   Lower cost, paid as value
Purchase            ongoing maintenance              is received


Implementation    Slow and expensive via          Fast time to value
                  significant IT resources
& Upgrades

                                                SuccessFactors Owns
Risk                Customer Owns Risk
                                                        Risk


                                                 Customer success as
Incentives       Maximize upfront deal size
                                                evidenced by renewals
we are today
At IPO    Today

Users        3.0M +
                       4.7M
Customers    1,400 +
                       2,700+
Countries    156 +
                       180
Industries   56 +
                       60
Languages    18
                       31
Cumulative Customers
                                                                                                        2,700+
                                                                                         100+

                                                         30
                              8
     1
                           Leading
                             financial
                              services                                 Leading
                                      company                           retailer
          One of the
         world’s largest
              retailers                          Award-winning
                                                         retail bank
                            Leading
                               financial
                                services
                                       company

>300,000 users
                     >50,000 users

                                                 >25,000 users

                                                                                   >10,000 users
                                                                                                        >3 users
The first new
enterprise software
category in a
decade
Fastest Growing Public SaaS Company
                                                                                   161




                                                                         112




                                                               60


                                                    27
                        8                 14
      4

   FY 2002            FY 2003          FY 2004     FY 2005   FY 2006   FY 2007   FY 2008


Revenue + Change in Deferred Revenue ($Millions)
                                                                                           18
Large, Greenfield Market Opportunity
Performance & Talent                Estimated Potential
Management                          Market Opportunity
                                    Enterprise
                                    130mm * $35 =                                 $4.6bn
                                                  27,500 Institutions > 2,500 Employees*


                                    SMB
                                    150mm * $75 =                                $11.3bn
        89% Greenfield                                9mm Institutions > 3 Employees*

       Market Opportunity

                                                       $15.9bn
Source: Bersin & Associates, 2007   Note: Assumes ~80% of employees are in addressable market
                                    Source: Dun & Bradstreet /Hoovers*, U.S. Census Bureau
                                    (http://www.census.gov/epcd/www/smallbus.html)
Our five year strategy

              2003                         2008
Geographies     100% - North America
                                                     19% - EMEA, APAC, LATM

                                                   81% - North America



Markets           5% - Mid Market
                                                     47% - SMB, Channels, Intl.

                  95% - NA Enterprise          53% - NA Enterprise



Products          7% - Other Modules
                                                      40% -   Performance and
                                                                  Goals
                 93% - Performance and Goals    60% - Other Modules
Industry consensus that we lead the pack




                                                             TM
IDC MarketScape: Worldwide Integrated Talent   Forrester Wave
Management 2008 Vendor Analysis Report         Integrated Performance and Compensation Solutions

  21
its not that secret
No Assholes*
respect for the individual




                              * It’s okay to
                             have one, just
                             not to be one
Passion
get a rush from what we do, or get out
Customer Success
making heroes of our customers through results
Kaizen!
continuous improvement
Take Risks
make mistakes, learn from them
Meritocracy
 pay for performance
Support
we don’t leave our wounded behind
Get it Done
do whatever it (legally) takes
Transparency
brutally honest communication and decisions
Measurable Results
     Points, not yardage
to customers
“Execution” – a CEO’s biggest concern

      Rank                             Change Jul. to Oct. ‘08

       1     Excellence in Execution                    +9.4%


             Consistent Execution of Strategy
       2     by Top Management                          +5.1%


             Speed, Flexibility, Adaptability to
       3     Change
                                                       +22.1%




                                Source: The Conference Board – CEO Challenge 2008
SuccessFactors customers are executing
faster…and better




          Source: SuccessFactors customer survey by a top 3 management consulting Firm
And, the pay-off is biggest for customers
with a strategic focus




  Strategic vs. Tactical = 5X Impact on Productivity


             Source: SuccessFactors customer survey by a top 3 management consulting Firm
customers say
SuccessFactors is key to strategy execution

                                                   CEO



                           Global Head
                CFO                                  COO                  CIO                 CTO
                             of Sales




                               Performance management key to engaged
                                      Getting everyone aligned, winning
                                        Improved business performance
                                               Retaining the best people
   $14.2 billion        “For us to win a critical ‘business has doubled in theengagement strategy.
                              “(This is) during these toughperformance driver’ mustaligns your
                               “SuccessFactors absolutely helps us drive ourwe as it set clear
                               “Retention of new recruits economic times year and a half
Global consumer
Global distributor of
  global leader         objectives Allied Building withbeen using SuccessFactors” the overall
                              personal performance see how their goals fold into
                               Employees can easily and leadership required tobusiness unit,
                               that for objectives has the overall goals of your create a
 packaged goods
  electronic parts
  200 locations         stronger, fasterobjectivesTextronOura whole…” Management process
                              functional area and Clark. company.”
                               strategic Kimberly of the as Performance
                        is a critical part of this goal.“ –Reilly, Chief Financial–Officer,Campbell, Chairman & CEO
                                                     – Brian Philip Gallagher, SVPLewis Allied Building Products
                                                                                    & Global President Technology
                                                                                                  – Tom Falk, CEO
What’s
next for us
How many of you have managed
more than…




                           …?
So…
You’ve got all the answers.
You’ve got all the tools.


Right…
questions?
Lars Dalgaard, Founder & CEO

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Lars Dalgaard SuccessFactors Stanford May1109

  • 1. Lars Dalgaard, Founder & CEO Stanford Engineering School May 11 2009
  • 3.
  • 4. My Journey Stanford, CA Switzerland U.S.A. Germany Holland Denmark San Mateo, CA Not long ago… 2001-
  • 7. A company’s workforce is approximately 70% of its operating expense Getting There, a whitepaper from KnowledgeInfusion/SuccessFactors
  • 8. The strategy / execution gap High 95% 50% of employees don’t understand of the average their company’s employee’s time strategicon non- is spent goals productive work Corporate StrBalanced Scorecard: Norton/Kaplan ategy Board: Measures that Matter Low
  • 9. Challenges in cultivating top talent 71% 86% of employees say that when they do of the workforce a good job, their is disengaged performance is not rewarded Watson Wyatt: Work USA Study
  • 10. Challenges in workforce optimization 84% of large global companies say they are not using their workforce to their full potential
  • 12. Old Model SaaS Big upfront costs including Lower cost, paid as value Purchase ongoing maintenance is received Implementation Slow and expensive via Fast time to value significant IT resources & Upgrades SuccessFactors Owns Risk Customer Owns Risk Risk Customer success as Incentives Maximize upfront deal size evidenced by renewals
  • 13.
  • 15. At IPO Today Users 3.0M + 4.7M Customers 1,400 + 2,700+ Countries 156 + 180 Industries 56 + 60 Languages 18 31
  • 16. Cumulative Customers 2,700+ 100+ 30 8 1 Leading financial services Leading company retailer One of the world’s largest retailers Award-winning retail bank Leading financial services company >300,000 users >50,000 users >25,000 users >10,000 users >3 users
  • 17. The first new enterprise software category in a decade
  • 18. Fastest Growing Public SaaS Company 161 112 60 27 8 14 4 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 Revenue + Change in Deferred Revenue ($Millions) 18
  • 19. Large, Greenfield Market Opportunity Performance & Talent Estimated Potential Management Market Opportunity Enterprise 130mm * $35 = $4.6bn 27,500 Institutions > 2,500 Employees* SMB 150mm * $75 = $11.3bn 89% Greenfield 9mm Institutions > 3 Employees* Market Opportunity $15.9bn Source: Bersin & Associates, 2007 Note: Assumes ~80% of employees are in addressable market Source: Dun & Bradstreet /Hoovers*, U.S. Census Bureau (http://www.census.gov/epcd/www/smallbus.html)
  • 20. Our five year strategy 2003 2008 Geographies 100% - North America 19% - EMEA, APAC, LATM 81% - North America Markets 5% - Mid Market 47% - SMB, Channels, Intl. 95% - NA Enterprise 53% - NA Enterprise Products 7% - Other Modules 40% - Performance and Goals 93% - Performance and Goals 60% - Other Modules
  • 21. Industry consensus that we lead the pack TM IDC MarketScape: Worldwide Integrated Talent Forrester Wave Management 2008 Vendor Analysis Report Integrated Performance and Compensation Solutions 21
  • 22. its not that secret
  • 23.
  • 24. No Assholes* respect for the individual * It’s okay to have one, just not to be one
  • 25. Passion get a rush from what we do, or get out
  • 26. Customer Success making heroes of our customers through results
  • 28. Take Risks make mistakes, learn from them
  • 29. Meritocracy pay for performance
  • 30. Support we don’t leave our wounded behind
  • 31. Get it Done do whatever it (legally) takes
  • 33. Measurable Results Points, not yardage
  • 35.
  • 36. “Execution” – a CEO’s biggest concern Rank Change Jul. to Oct. ‘08 1 Excellence in Execution +9.4% Consistent Execution of Strategy 2 by Top Management +5.1% Speed, Flexibility, Adaptability to 3 Change +22.1% Source: The Conference Board – CEO Challenge 2008
  • 37. SuccessFactors customers are executing faster…and better Source: SuccessFactors customer survey by a top 3 management consulting Firm
  • 38. And, the pay-off is biggest for customers with a strategic focus Strategic vs. Tactical = 5X Impact on Productivity Source: SuccessFactors customer survey by a top 3 management consulting Firm
  • 40. SuccessFactors is key to strategy execution CEO Global Head CFO COO CIO CTO of Sales Performance management key to engaged Getting everyone aligned, winning Improved business performance Retaining the best people $14.2 billion “For us to win a critical ‘business has doubled in theengagement strategy. “(This is) during these toughperformance driver’ mustaligns your “SuccessFactors absolutely helps us drive ourwe as it set clear “Retention of new recruits economic times year and a half Global consumer Global distributor of global leader objectives Allied Building withbeen using SuccessFactors” the overall personal performance see how their goals fold into Employees can easily and leadership required tobusiness unit, that for objectives has the overall goals of your create a packaged goods electronic parts 200 locations stronger, fasterobjectivesTextronOura whole…” Management process functional area and Clark. company.” strategic Kimberly of the as Performance is a critical part of this goal.“ –Reilly, Chief Financial–Officer,Campbell, Chairman & CEO – Brian Philip Gallagher, SVPLewis Allied Building Products & Global President Technology – Tom Falk, CEO
  • 42. How many of you have managed more than… …?
  • 43. So… You’ve got all the answers. You’ve got all the tools. Right…