Freshworks launches SaaS products targeting startups • The Register | #microsoft | #hacking | #cybersecurity


SaaS newcomer Freshworks – said to be challenging Salesforce and ServiceNow – has launched a package aimed at startups and new IT helpdesk tech but is still struggling to get to grips with the enterprise food chain in its IPO year.

Consumer-like user experience, relatively cheap prices, and a modern tech stack notwithstanding, the India-based application interloper lacks key features, such as data dashboarding required by big companies.

Freshworks was founded by Girish Mathrubootham and Shan Krishnasamy as a “user-focused cloud-based customer service software” in 2010, around a decade after Saleforce.com, which for better or worse spearheaded the market. It offers products in CRM, IT ops and service desk, and some aspects of HR. Customers include tyre maker Stonebridge, publisher and education company Pearson, and the National Physical Laboratory, the UK’s national measurement institute.

The Google-backed company was valued at $12.2bn on its Nasdaq IPO in September after climbing 21 per cent more than the initial price. But after seemingly positive quarterly results, which beat market expectations and indicated 46 per cent year-on-year revenue growth, shares fell.

The company announced new product features and approaches to the market this week.

Its Freshservice helpdesk tool now features On-call Management designed to allow IT teams to immediately respond to critical incidents and aid collaboration between IT and DevOps teams. Automated Alert Grouping promises that machine learning will reduce alert noise to identify the most pressing IT ops issues.

Meanwhile, the new Freshstack bundle combines three products for startups: customer support, sales, and market products, which it hopes will “give startups what they need to instantly get up and running with a CRM platform.” Plus, these customers get $3,000 in credits on the SaaS platform.

It’s a puzzling move since by their very nature most startups don’t last long or employ many people.

But CEO Girish Mathrubootham told The Register: “We have other customers. Yes, we see very many startups fail, but also the ones that grow are going to be the leaders of the future.

“Large enterprises already have legacy investments, and they are not going to throw them away overnight. Sometimes, when you’re building the future, you have to go with what we call the technology evangelist, and start-ups are a great place where they’re making a fresh start, no pun intended.”

In a report from analyst group Forrester, Freshworks is ranked among contenders in the salesforce automation market, well behind the “leaders” Saleforce.com, Microsoft, and Oracle, and lagging behind “strong performers” such as SAP, Pegasystems, and SugarCRM. Freshworks produces more than salesforce software, but so do the other companies here: all three of the leaders have cloud platforms, and Microsoft and Oracle have ERP and finance too, for example.

Perhaps more importantly, the leaders also claim a bunch of features around dashboards and BI, which Freshworks lacks, according to the report.

“The product has basic reporting and dashboarding, which limits its use in optimising sales processes. Reference clients would like more operational maturity to support enterprise customers. It appeals to teams with straightforward requirements looking for a solution that’s easy to deploy and use,” the report said.

However, the analyst firm added that reference clients did “rave about its consumer-grade experiences.”

Mathrubootham defended the company’s approach in comparison with the big-hitters in the market by saying that as well as ease of use, the products were designed for rapid go-live, with projects taking a few weeks, rather than months or years, saving on consultancy and licensing fees.

The company also exploits commonality between the products it offers, building them from a common layer called the Neo Platform, “which abstracts many of the services that are required for these products like whether it’s like email processing or chat processing and multi-tenancy single sign-on,” he said.

Lastly, the products are designed to accelerate implementation by eschewing customisation, which can bog down enterprise projects.

“We stay out on deals where a large enterprise wants to customise the heck out of their system and a platform on which they can build whatever they want. We make it very clear. Most customers choose us because they realise 80 to 90 per cent of what they want is actually common,” the CEO said.

Kate Leggett, Forrester veep and principal analyst for CRM and customer service, agreed Freshworks products were fast and easy to purchase, configure, learn, and use.

“The products are all unified, with a unified view of data across applications. They are secure, compliant to data regulatory policies, and they are affordable – well below the cost of competing solutions such as Microsoft and Salesforce,” she said.

Although Freshworks might appear to have a disparate product portfolio across CRM, ITSM, and HR, it does well at making the most of “synergy between these products in terms of processes, data, experiences, engagement channels,” Leggett said.

However, the key to its success was being focused on the lower end of the implementation scale, where it competes with vendors such as Zoho, Hubspot, and a collection of freemium solutions.

“They will find the competitive space much more crowded if they move upmarket. If they do so, they will compete with Zendesk, SugarCRM, and MSFT, Oracle, Salesforce at the enterprise level,” Leggett said.

“As they move upmarket, they will have to mature their operational excellence – for example, their partner program, customer success and post-sale account management functions, customer service etc. to compete with the larger players that have more established post-sale account management practices.”

The problem is Freshworks’ claims of easy deployment and simplicity in architecture will not be tested until it reaches larger customers, which is exactly where it will find winning deals more difficult. It had better hope that some of those startups grow. ®



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