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Eloqua CEO: For smart start-ups, no bubble is coming in 2013

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The Exchange is part of an ongoing series on The Hive tackling the questions facing Boston’s entrepreneurs, investors, and innovators. This week, we ask participants if they think there’s a tech and investing bubble that’s going to burst in 2013? Read the rest of The Exchange.

Below Joseph Payne, chief executive of Eloqua, argues it is unlikely the tech bubble will burst in 2013 and points out that companies that make Software-as-a-Service products are going strong and showing no signs of stalling.

I don’t believe we’ll see the technology and investing bubble burst in 2013. While the economy hasn’t been as strong as we would all like it to be, the technology sector remains a bright spot. Companies are continuing to invest in technology, specifically Software-as-a-Service (SaaS) because these Web-based applications require little to no maintenance and are critical for businesses looking to accelerate growth.

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Analyst firms such a Forrester and Gartner forecast the SaaS industry at around $16 billion in 2013, and from what we’ve seen in 2012, I don’t find this stat surprising. Companies like Salesforce.com, ServiceNow, and Box are experiencing incredible growth with no signs of slowing down.

I believe we’ll see quite a few technology IPOs in 2013. While Facebook’s IPO was disappointing, there were many successful IPOs out of the technology industry this year, and I expect that momentum will carry into 2013. Splunk and Workday are two IPO examples from 2013. Both companies had stellar IPOs and both companies are SaaS—further proving that the investment community looks favorably on this type of technology.

Eloqua (another SaaS company) went public in 2012 as well. Eloqua priced at the top of our range, enjoying a successful IPO back in August. While on the road show, I had the opportunity to speak to investors from across the country, and there is genuine interest and excitement around tech and the cloud. The SaaS subscription model is attractive for both customers and for investors since companies are essentially renting software, which is a lot less risky for the CIO and also results in a steady stream of revenue for the SaaS provider.

As investors continue to fund tech companies, I think the wealth will spread from Silicon Valley to other regions of the country. We’re fortunate to have an office in Kendall Square, right at the heart of Boston’s innovation economy. Every time I visit, there are new startups, new investors and new offices from tech players. There’s an amazing talent pool here in Boston, and we have had great success building a team in town. Boston and the U.S. in general has a strong, vibrant technology presence, which is leading to impressive job creation. Occupations such as software developer, computer programmer, and IT manager are in high demand – a tremendous sign for the future.

Companies want – and more importantly, need – to invest in technology that will help them improve their businesses and drive revenue. If our industry keeps hiring and training top talent, and offering smart, valuable products, I predict a healthy outlook for 2013.

Joseph Payne is the chief executive of Eloqua. Weigh in on The Exchange: Read the rest of The Exchange, and then let us know if you think that a bubble is going to burst for entrepreneurs next year at hive@boston.com or on Twitter at@HiveBoston. This week’s exchange was compiled by Sanjay Salomon.

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