Baseline magazine recently published their 50 Fastest-Growing Software Companies for 2006 study based on year-to-year growth performance from 2004 to 2005.

First, here are the caveats. Only public companies with at least $10 million in revenue were considered. Nearly 40% of the companies grew through acquisitions which contributed to total revenue growth. And companies with major non-software businesses were not considered.

So what’s so interesting about the results? Eight of the top ten and 36% of the 50 fastest growing software companies are on demand vendors that offer their software as a service. We believe this trend demonstrates further market validation of the on demand software model. Software as a service offers a more successful alternative to traditional licenses due to faster implementation, lack of IT maintenance, and 100% accountability for business processes and uptime performance.

How did Taleo do? Our healthy 33.7% growth rate during the period ranked us at #44. But among those listed in the category of talent management, we are #1!