Internet Capital Group Well-Positioned for SaaS and Cloud Computing Trends

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Last week, I had the privilege of attending and presenting at Internet Capital Group’s (ICGE) 2009 Strategic Growth Conference in Philadelphia, and came away impressed with the company’s portfolio of web-oriented businesses and vision for the future.

ICG was one of the pioneers of web-based businesses during the late 1990s, and is one of the few survivors of the bust. Like THINKstrategies, ICG believed after the demise of the era that there were could still be tremendous opportunities via the Internet once the enabling technologies and business models matured to meet customers’ changing requirements.

Unlike other investment firms which might have a set of ‘theses’ for the types of companies they fund, ICG has attempted to build a portfolio of companies that can leverage their commonalities to create additional synergies.

Specifically, ICG’s core company portfolio of Channel Intelligence, Freeborders, ICG Commerce, Investor Force, Metastorm, StarCite, Vcommerce and WhiteFence each have powerful data collection capabilities which can be harnessed to produce additional value for their customers and create a competitive advantage for the firms.

This focus on the value of the company’s data generation capabilities is in keeping with the way THINKstrategies views the evolution of the SaaS market from software services to business services and ultimately information services.

ICG’s focus and perseverance is paying off. The company reported that its eight core portfolio companies grew 12% year-over-year in the first quarter of 2009 after registering a 23% jump in revenues in 2008, and their aggregate EBITDA (loss) for the quarter improved 70% in a tough economy.

Riding this momentum into last week’s event in Philadelphia, the theme of the ICG gathering was finding new ways to accelerate growth and streamline operations. Among the ideas discussed were the burgeoning array of economical development resources available worldwide via the web and new methods to create differentiation in an increasingly competitive marketplace.

I came away from last week’s event believing that ICG’s investment model and its portfolio companies’ data-driven, on-demand service strategies are well-positioned to capitalize on the rapidly changing business requirements in today’s tough economic climate.

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Tagged: , Internet Software & Services
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