Blog for Sales Performance and Commissions Professionals

We were barely getting used to calling ‘Merced’ by its new name – ‘NICE’, when this news hit the wire – IBM buys Varicent!

This is the second major acquisition in the SPM arena in the last four months. M&A activities are a good indication of industry maturity. So is the SPM arena already maturing? And how does this acquisition impact Varicent’s customers and its competition? The news comes as a surprise, and the title of the press release is puzzling in itself. It reads “IBM buys Varicent to boost business analytics”. We think of Varicent as an SPM company, don’t we? And yet, IBM bought it for its Data Analytics, as though it discovered a hidden gem under the layers of SPM application that customers love! It is more likely that the author picked a name better understood by the masses(vs ‘SPM’), or maybe, it is indicative of the future roadmap – leveraging SPM data in an analytical fashion to improve overall sales performance.

The press release goes on to state ‘..the software will be folded into IBM’s Smarter Analytics line of software packages’. In the recent past, IBM has mostly acquired companies that offered IT Management or Infrastructure Technologies, whose products are were leveraged across a range of industries and functions. Click here, for a list of IBM acquisitions. I cannot think of any major application vendors acquired by IBM in the recent past. With the purchase of Varicent, Big Blue has stepped beyond its chosen path. If IBM plans to stick around and become a significant player in the SPM landscape, then it is a big reinforcement to the value proposition of SPM solutions. Quoting Chris Caberra, Xactly CEO, ‘We say welcome, IBM’.

All indicators point in the direction that Varicent would continue to operate as an independent entity, under the IBM brand, just like Netezza or Algorithmics. Both are thriving after getting acquired by IBM, and successfully serving small and large enterprise customers alike. I expect to see ‘Varicent, an IBM company’ in all their future messaging, and Varicent continuing to operate as an SPM player for years to come. With IBM getting into the SPM ring, we’ll have not one, but two niche SPM packages backed by the strength of publicly listed companies – Callidus and Varicent(not counting Oracle as a niche SPM player). Decision makers on the customers side, concerned about Varicent’s sustaining power, can now take comfort in dealing with IBM.

If IBM plays it cards as expected, folks at Callidus are likely to see serious challenges in more of their sales cycles. But in the short run, as it happens with every M&A, prospects and customers might get jittery, and competition(read Callidus and Xactly) will look to take advantage of the opportunity to lure away customers.

As for Varicent’s current users, it should be life as usual. I don’t envision IBM changing or discontinuing the SPM product line in the foreseeable future. The pricing may go up just to be in sync with IBM branding, but customers wouldn’t mind paying a premium for IBM’s brand value. In fact, IBM acquisition should help customers in three significant ways:

1. Global Reach – IBM with its global footprint is better equipped to serve Varicent’s global customer base.

2. Data Analytics – This is a no brainer. IBM will integrate its portfolio of big-data technologies to further enhance Varicent’s analytical capabilities.

3. Cloud Capabilities- IBM has acquired several cloud technology companies in the recent past – Cast Iron Systems, Green Hat and DemanTec etc. to name a few. With some innovative re-engineering, IBM has the opportunity to leverage these technologies, and significantly enhance the SaaS offering of Varicent. We can expect to see much more solid SaaS capabilities in future versions of Varicent.

Welcome, Varicent, an IBM company.

About the Author
Maneesh Gupta is the Managing Partner at Spectrum Technologies. Spectrum is a silicon valley firm providing niche services in the area of Sales Performance Management Systems since 2007.

Maneesh can be reached at
To learn more about Spectrum please visit –

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  • Filed under: SaaS, Sales Performance Management, Varicent
  • IBM acquires Varicent Software

    IBM today announced its intention to acquire Varicent, a renowned leader in Sales Performance Management Software. What does this mean for the Sales Performance market? It certainly reinforces the fact that Smart Analytics is the way of the future. With IBM adding one more feather in its already existing portfolio of Business Intelligence and Analytics packages, Sales Performance Analytics is here to stay.

    Read the official press release here.

    And post this announcement, Xactly is offering ONE FREE YEAR of Xactly’s SaaS solution to any Varicent customer.

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  • Filed under: Sales Performance Management, Varicent
  • How To Measure The Success of Your SPM Implementation

    During an RFP process, I was in a customer reference call and a question came up – Did you have a successful implementation? They gave their answer but it got me thinking – what exactly defines the success of an SPM implementation? Of course the straightforward answer is within-budget and on-time delivery. But what are some of the other metrics besides the obvious?

    SPM projects are intended to deliver much more than just $ savings. Therefore the conventional ROI calculation doesn’t work here. Some of the non financial parameters to consider :

    • Time/Effort in Comp Administration- Has the system enabled you to normalize headcount or working hours?
    • Sales Incentive Plan Document distribution – Are those being routed on time?
    • Agility in making Comp Plan changes – Are you able to make quick changes to comp plans, or do you still have to push back?
    • Commission Forecasting Accuracy – Are the actual and forecasted numbers comparable?
    • Fiscal Year Beginning Draws – How long are the payees on draws before actual commission is paid?
    • Volume of Disputes – Is the team now able to catch issues before they become disputes. How quickly are discrepancies resolved?
    • Meeting Payroll deadlines – Is it a comfortable run to the finish line, or is it still a mad rush?
    • IT Support Head Count – Has it reduced? How much value is the support team adding?
    • Reporting – Do sales folks actually understand and use the reports? Do the reports provide necessary insight to higher Sales Management?

    If your answers to all or any of the above is positive, then you have a winner!

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  • Filed under: Implementation, Sales Performance Management
  • SPM Vendor Selection – Ten Tips

    Just recently, I concluded a SPM package selection for a large silicon valley firm.  It was a great learning experience. The SPM landscape is very competitive and package selection requires a considerable amount of preparation and planning.

    While it is all fresh in my mind, I would like to share a few thoughts on running an SPM evaluation project.

    Preparation and Planning

    1. Budget – Prepare a budget estimate, discuss it with project sponsors and secure a nod for funding. Gather input  from colleagues and consultants, avoid vendor’s sales reps at this stage!

    2. Timeline  – Prepare a rough project plan (RFP to Go Live). Obtain a buy in from both, Business Execs and IT folks.

    3. Dependencies – Look around for other IT or business initiatives planned in the same time window. Make a note on your tentative timeline that these need to be looked into in greater detail at the appropriate time.

    4. Invest time in creating a good RFI/RFP.  Explain your comp plans, reporting needs, data sources, biz processes, HR policies and IT requirements.

    5.  Build an evaluation scorecard with appropriate weights assigned to each criterion. This would help keep any personal feelings or bias out of the evaluation equation.

    Vendor Selection

    6. Shortlist no more than 3-4 vendors based upon RFI/RFP responses and initial sales demos for the next step.

    7. Setup a core decision making team before scheduling detailed demos.  The key is to include the right people who will ask the right questions and whose opinions count. Email the scorecard to all the participants ahead of the demo meetings so they can use it as a reference during the actual meetings.

    8. Shortlist no more than two vendors for a detailed POC (proof of concept). Set aside a full day for each POC. Provide real life Comp Plans/Data to vendors and give them at least 4-5 weeks to prepare(so they have enough time to have all their questions answered and no excuses).

    9. In addition to the Comp data provided to the vendor, have a separate list of simple and relevant business scenarios and request the vendor to show/run those during the actual POC(like a surprise test).

    10. Scope and Price Negotiation

    • Negotiations will be more effective whilst there are still two players in the game and they are competing against each other. Sometimes it even helps to keep both of them alive all the way until the contracts are signed.
    • Identify what you can do for the vendor, for eg. upfront payment, offsite work, press release, customer references  etc. Do not reveal all the cards upfront, use them one at a time.
    • SaaS contracts are too technical for Procurement to negotiate.  Seek assistance from your IT.
    • And yes, the dirty old trick of stretching the negotiations into the last few days of the quarter. Vendors get more accommodating just so they can meet their quarterly goals.

    Good luck with your vendor evaluation!!

    If you would like to see a scorecard sample, please contact me at

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  • Filed under: Sales Performance Management
  • Single or Multi Tenant

    A few weeks ago, I had interviewed Jeff Saling about the benefits and future of SaaS. In that interview we talked about single tenancy and multi tenancy and what options work for which companies. Customers are sometimes faced with the dilemna of whether to go single tenant or multi tenant. This post will help answers some questions about both kinds of hosting and help you in your decision making.

    What is the difference between single tenant and multi tenant?

    As the name suggests, a single tenant system houses the data for one customer only. The hardware infrastructure is dedicated to one single customer. Whereas in a multi tenant system, multiple customers are housed on a single server and the entire infrastructure is shared amongst all the occupants.

    This basic difference between the two systems leads to other considerations as follows that are important when deciding which system to choose.


    As pointed out above all the hardware resources ie processors, memory etc. are available to the single customer in case of single tenancy(ST) and these resources will be shared across all the customers in a multi tenant(MT) environment. This means that if you need to run resource intensive processes very frequently, you will be fighting for resources in case of MT whereas in case of ST, all the resources are always at your disposal.


    It goes without saying that a ST system will have a higher level of security and absolutely no risk of accidental data contamination between two customers. But at the same time, MT systems also employ extremely high security standards which are in most cases adequate for a company’s security needs. These systems go through rigorous security certifications that have to be renewed every few years in order to protect the data and the customers they house.

    System/Software Upgrades

    A MT system has to follow the upgrade schedule as per the product vendor and the customers have a little say as to when the upgrades can happen. ST systems have the luxury of sticking to their own upgrade schedule within a certain time frame. This may be important to some customers particularly in cases where the system utilization is very high and downtime for an upgrade is not affordable.


    Although ST systems have a number of advantages, they come at a premium cost. The per user subscription fee for a ST system is significantly higher than a MT system.

    In addition to the above, specific industries that have very high security guidelines or industries in certain geographical locations may need to employ ST systems in order to satisfy legal requirements.

    It is only by considering all of these factors that you would be able to determine the right fit for your company.

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  • Filed under: SaaS, Sales Performance Management
  • SPM Industry News 11/05/2010

    Not many happenings in the industry this week.

    There is an upcoming event from Callidus Software. Click the link below for details.

    Are You Ready for 2011? How Best-In-Class-Organizations Will Be Managing Sales Compensation

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  • Filed under: Uncategorized
  • ICM/SPM Industry News 10/29/10

    1.       Callidus Software announced 2010 Q3 results. Key Highlights

    • Total Q3 Revenue – $18.5M (6% growth from last year)
    • Service Revenue down 33% from last year
    • Recurring Revenue contributes 72% of total revenue (power of Saas!).
    • Profit (Loss) –  ($1.6M)

    For details –

    2.       Synygy Announces Agency and Commission Management Solutions for Insurers

    Adding industry specific features to the package sounds like a smart idea.

    For details

    3.       Xactly signs 30 new customers in Q3, 2010.

    Not bad! Not much info available on the financials, as they are not a public company.

    For details –


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  • Filed under: Sales Performance Management
  • ICM/SPM Industry News

    Dear readers, my apologies for the long silence. I have been busy helping a hi-tech client with vendor evaluation and it does tax your brain!

    Going back to the blog, amidst your busy schedules, dont you wish there was a quick way to stay abreast of the ICM/SPM industry news. Well, at least I do, especially for the last few weeks while being submerged under piles of data. They say, if you can’t find it, invent it!

    Starting today, I’ll be doing a roundup of the important SPM/ICM industry news and events every week.

    Here is the very first newscast for this week:

    Varicent makes it for the first time to Deloitte Technology Fast 500™ list. For the period 2005-2009 it grew 40,269%. They are sure growing fast and everyone better be watching out –

    Callidus announces the launch of its new solution for onboarding sales professionals and independent channel partners. Integrating channel partners has been a significant problem and surely Callidus seems to be on the right track –

    Upcoming Event – Synygy SPM Seminar Series – A multi-city educational event for sales leaders, sales operations staff and others involved with managing sales force performance. Sure sounds like a good learning as well as networking opportunity –

    If you would like to share a relevant news item or event, do write to me at

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  • Filed under: Sales Performance Management
  • Spectrum SaaS Webinar Recording

    Thanks a lot everyone for attending Spectrum’s SaaS Webinar and making it a success. You can download the recording of the entire Webinar at the link below –

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  • Filed under: Sales Performance Management
  • Spectrum Webinar: SaaS for ICM – Is It Right For You?

    Are you considering an ICM Package and evaluating vendor hosted SaaS options? Do you have an on-premise ICM package but are considering moving to SaaS?

    Join Spectrum and Jeff Saling to learn if SaaS is right for you. In this FREE Webinar you will learn pros and cons of SaaS and specific points to consider in evaluating SaaS option for ICM.

    You will learn:
    * Differences between SaaS, Cloud and ASP
    * Cost comparisons of SaaS and On-Premise
    * Business case for SaaS forICM
    * Contract Terms and SLAs for SaaS
    * Data security in SaaS
    * Common risks and cost overruns for SaaS -ICM projects

    Who should attend:
    * Executives in Sales, Sales Operations, Finance, IT and HR

    Space is limited.
    For more details and to reserve your Webinar seat now at:

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  • Filed under: Sales Performance Management
  • Spectrum Technologies

    Spectrum’s ICM team consists of technology and business professionals with solid expertise in implementing and supporting various ICM packages and Commission systems. Spectrum has been involved in ICM implementations since 2004 and our team has an outstanding track record of successful deployments at several Fortune 500 companies. For more information, please visit

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