UK offers rich pickings for SaaS startups

Country offers good opportunities for providers that target SMEs

The UK market is better placed than either that of Europe or the US to support small and medium software-as-a-service (SaaS) companies, according to several top UK startups who were presenting at Tech Tour, a cloud and ICT summit being held in Geneva yesterday.

The summit has seen 25 high-growth startups from across Europe presenting to leading venture capitalists in a bid to bag investment.

The 25 companies were chosen as the most promising and innovative companies in the cloud sector from a cluster of 234 by a selection committee comprising technology venture capital firms, members of the legal profession and blogosphere as well as members of European governments.

One company presenting was the Reading-based startup Workbook, which provides an SaaS solution to SME's of around 50+ staff. The solution comprises a series of integrated web-based apps including customer relationship management, sales, marketing and invoice processing tools.

The company's only direct competitor is Salesforce.com, which CEO John Cheney argued doesn't directly target the SME market.

"We are a UK-based firm, and the UK is known as a nation of startups – there are far more SMEs here than enterprise-level companies so the market is rich with potential customers for us. We have tailored our solution specifically for this market.

"In addition, the legal and commercial market in the UK means that the environment is suitable for a cloud startup such as ours," he said.

He went on to explain that because there is a higher concentration of SMEs in the UK than either the US or Europe, SaaS is the most demanded type of cloud service.

On the other hand, companies that are looking to use the cloud to support their infrastructure (IaaS) or other platforms (PaaS) tend to be enterprise level and so served by bigger companies in the US or Europe.

There are other reasons why the UK is a good market to set up as a SaaS provider, one of which is that the UK has more balanced laws in terms of data privacy legislation, with those in France and Germany being more restrictive. The US's Patriot Act, which was introduced as anti-terrorist legislation, can also put companies off setting up the States.

Bristol-based company Brightpearl also provides web-based integrated software to the SME market, and targets companies of up to 200 staff.

It integrates CRM, accounts, inventory management and e-commerce services.

Chief executive Salman Malik, who had been developing web-based software for US giant Siebel before moving to Brightpearl, said: "The UK SME market is massively underserved and many of these companies simply don't have the technology or the resources to create their own platforms in-house."