The recent IPO from SuccessFactors will definitely do some damage to the ingrained pessimism many market observers seem to have about software debuts.

Here is a nice overview of the company and the IPO at Seeking Alpha.

What is interesting to me is that SuccessFactors had a nice IPO that drove the stock up to around $13.50 in opening trading, and netted the company a valuation of around $680 million, but did so as an unprofitable company. Its main rival Kenexa is actually profitable, but did report earnings shy of estimates last year.

So, not only is the IPO market getting hot again for apps vendors (we saw Omniture stumble in its IPO but has since gained speed with steady stock climbs), but the prevailing logic may not even apply anymore. After the miseries of 2001, the IPO rule of thumb was $80-100 million in trailing 12 month revenue and at least some semblance of nearing profitability. SuccessFactors is at about half that run rate.

I expect to see some interesting IPO announcements based on the positive signs shown by SuccessFactors’ strong debut.