August 5th, 2009

Go cloud, young man

Posted by Phil Wainewright @ 5:29 am

Categories: ERP, Intacct, Web 3.0

Tags: Job, Web, Accounting, Accountant, Accounting Company, Cloud, Rationale, Recruitment & Selection, Internet, Human Resources

Several times recently, I’ve advised personal acquaintances who find themselves between jobs to investigate any opportunities to put their skills to work online. The rationale is simple. In an economic recession, everyone is looking for ways to save money, and therefore the growth sectors are those that help people and businesses do more with less — low-cost supermarkets and fast-food outlets, second-hand and discount traders, and the subject of this article: any online service that strips out excess costs through automation and remote access to administrative and professional expertise.

By and large, online is cheaper because it eliminates all the time frittered away moving information from one place to the next and moving people from one meeting to another. Imagine how much time is saved when a customer looks up data for themselves and then enters new information directly on an online form, instead of having to phone up and ask questions, then fill out a paper form and have someone re-enter that data on receipt. Think how many more people an adviser can deal with if instead of handling physical paper and attending face-to-face meetings, they can just pick up the phone to their client and discuss documents and data they’re both viewing online.

That time saved is a huge salary cost that an online provider no longer has to bear. It’s a cost burden that keeps prices high at conventional operators. Businesses that transfer custom from their old providers to go online no longer have to pay those inflated prices, so they save money. The online providers still make a profit on their lower operating costs, and as they grow they make even more money. Those cost savings and profits come at the expense of the people who are no longer employed on those wasteful, time-intensive manual processes and face-to-face meetings at the conventional providers. Jobs and profits move from the old providers to the new, which is why I say to my friends, look online for opportunities.

Nowhere is this more true than in the kind of professional work in which most of my personal acquaintances have made their careers — banking, insurance, law, accountancy, sales and marketing, journalism and so on. Yet despite this, most of the people to whom I give this advice completely ignore it, either because they don’t get it or they don’t want to believe it.

What they don’t understand (or refuse to accept) is that the Web Read the rest of this entry »

January 27th, 2009

Intacct wins converts with help of its channel

Posted by Phil Wainewright @ 2:45 am

Categories: ERP, Ecosystems, Intacct

Tags: Software-as-a-service, Intacct, Intacct Win, PC Magazine, Software As A Service (SaaS), Managed Hosting, Cloud Computing, Emerging Technologies, Phil Wainewright

One facet that’s becoming a distinctive, default feature for SaaS financials apps is real-time drill-down into consolidated global operational finance data — such as, who are my ten biggest debtors worldwide, or what’s the dollar value of my sales pipeline in Southern Europe this week? With yesterday’s announcement of Intacct’s latest release, I’ve now seen this from all three of the big-name pureplay SaaS financials vendors [disclosure: Intacct is a current client]. NetSuite brought this capability live last year with its One World edition, and it has always been one of the core attributes of Workday’s proposition. Like Workday, Intacct has coupled this with a new Flex-based user interface (see partial screenshot below).

Real-time global consolidation is distinctive for SaaS because, as Intacct’s SVP of marketing, Dan Druker, wrote on his blog for the announcement, “because we are SaaS, we can assume that all financial data for every business entity, in every location and in any accounting regime or currency is always available on-line and real-time … in a flat world connected by the Internet, the days and weeks it used to take to run a consolidation and reporting cycle collapses into seconds and minutes.”

With conventional software, this kind of capability is only available at huge additional expense, but it comes standard with SaaS. That’s a tremendous competitive advantage for SaaS vendors aiming to win over midmarket customers. As I wrote last spring of NetSuite’s OneWorld offering:

“Business decision-makers in today’s highly connected world feel a pressing need to have access to accurate, real-time data when they make decisions, and conventional midmarket business software doesn’t give them that, especially if they operate internationally or across multiple business units … [E]ach separate business operation has its own business systems and the data from each system has to laboriously aggregated at the end of each month before it can be evaluated. This time lag is going to be even more keenly felt now that everyone is nervous about the effects of the credit crunch. If your sales have suddenly reversed the rising trend of the past few years, you need to know that straight away, not six weeks after the fact.”

More than a thousand of Intacct’s 3,000 or so customers use its multi-entity and multi-currency capabilities (in fact, if it wanted to play a numbers game, it could claim “more than 10,000 businesses” in its customer base, taking into account separate entities within these customers). All of them will now be able to take advantage of the global consolidation function, which allows users to drill down from the global view to any individual record or transaction, and permits instant reporting and analysis of virtually any permutation of real-time data.

Thanks to this kind of capability — together with a longstanding strength in core financials and reporting — Intacct is now starting to win over its first Oracle Financials converts. The savings such customers can realize are pretty impressive Read the rest of this entry »

January 5th, 2009

Debunking myths about the SaaS partner channel

Posted by Phil Wainewright @ 12:16 pm

Categories: Business models, ERP, Ecosystems, Intacct, Intuit, Microsoft, NetSuite, On-demand, SAP, Software licensing

Tags: Phil Wainewright

There are a couple of widely-held myths about the SaaS partner channel that I saw being debunked in the closing months of 2008. No, neither of them were the hoary old myth that SaaS vendors don’t need partners because they can use the Web to sell direct — the dot-com bust proved that one wrong. Solution providers are still alive and well on the Internet, but to succeed they have to ignore some common preconceptions. Here are two statements I often hear from vendors and other experts when talking about SaaS:

• SaaS vendors need channel partners because customers will only buy business solutions face-to-face
• SaaS partners have to run lean operations because their margins are slimmer

Both of these assertions are just plain wrong — and I have to confess, that’s not something I would have expected until I heard the evidence.

First up is the assertion that SaaS business solutions have to be sold face-to-face. I heard this point made very firmly by SAP last year talking about its experiences with its Business ByDesign offering. It had originally hoped this would be bought self-service via the Web, but later found it required at least a day’s face-to-face requirements discovery. This led SAP to conclude that it would have to rely on partners with specialist vertical expertise or existing local trust relationships. It seemed a logical conclusion, knowing that another SaaS business suite vendor, NetSuite, operates a network of regional sales offices precisely so that it can be close to its customers.

But then in November I moderated a solution provider discussion at the SIIA OnDemand conference in San Jose, in which four solution providers who work with, respectively, Intacct, Intuit, NetSuite and Microsoft, spoke from their own extensive experience. There’s a very good video of the complete session online now. The most surprising insight of this very informative panel discussion was that SaaS solution providers are getting smart at using the Web to sell, close and deliver solutions remotely — often without any face-to-face contact at all. What this tells us Read the rest of this entry »

June 20th, 2008

Why multi-tenancy matters

Posted by Phil Wainewright @ 3:44 am

Categories: Architecture, Intacct, On-demand, Oracle

Tags: Software-as-a-service, Oracle Corp., Intacct, DB, Software As A Service (SaaS), Cloud Computing, Emerging Technologies, Phil Wainewright

I’d like to refine the description of multi-tenancy that I set out in my post earlier this week on Many degrees of multi-tenancy. Intacct’s CTO, Aaron Harris, responded with some very illuminating detail on the vendor’s architecture, which leads me to reclassify Intacct (and indeed NetSuite) into the top tier alongside Salesforce.com. Their differences come down to implementation choices rather than any difference of principle, as I’ll explain. There’s also been lots of thoughtful TalkBack, and I’ll highlight some of those comments too.

At the top tier of multi-tenancy, the debate is merely about how many identical instances a vendor wants to support. There’s universal agreement on the need for every customer to be running on identical code, right down to shared schema at the database level. The debate revolves around the optimum size and number of instances that the vendor replicates within its data center. Intacct’s Harris (pictured here) succinctly set out the main factors in an email to me earlier this week, which I’m quoting with permission:

“Intacct currently runs all 2,500 of its customers on 10 production databases. Roughly three years ago we exceeded the capacity of a single DB instance and were forced to make a decision about how we were going to scale. Our options were:

1. go with a big-iron, rack approach similar to Salesforce at the time (scale up),
2. go with many inexpensive servers similar to NetSuite (scale out) or
3. continue to buy the most powerful Intel-based boxes we could find, and add more as necessary.

“We ruled out a) for a couple reasons. We felt having a single instance causes too much exposure. Even if that single instance has greater reliability numbers, the outages become too visible. Second, our over-arching design principle for operations is ’simple, rugged, economical design’. Rack fails on ’simple’ and ‘economical’.

“We ruled out b) because we feel having many DB servers eliminates one of the core reasons for multi-tenancy — economics. It’s not the acquisition of lots of inexpensive servers that fails the economics test — it’s the increased burden on operations staff. Additionally, more DBs means more risk that your instances won’t be identical.”

That final point brings us onto the topic of upgrades, which requires some elaboration. First of all here’s what Harris wrote in his email: Read the rest of this entry »

June 16th, 2008

Many degrees of multi-tenancy

Posted by Phil Wainewright @ 4:08 am

Categories: Architecture, Intacct, Oracle

Tags: Salesforce.com Inc., Software-as-a-service, Database, Pod, Oracle Corp., Intacct, Software As A Service (SaaS), Sales Force Management, Cloud Computing, Emerging Technologies

For SaaS purists, multi-tenancy — the architectural model that allows them to serve multiple customers from a single shared instance of the application — is an article of faith, the one thing that marks them as a tribe apart from traditional software vendors. Suggesting that they’re anything other than fully multi-tenant, then, is tantamount to questioning a man’s virility or impugning an American’s patriotism. It’s not the done thing.

Perhaps, therefore, Milan Thanawala (pictured), director of platform products at Oracle, might have chosen his words a little more carefully in a panel session last week at the SIIA OnDemand Europe conference in Amsterdam [disclosure: I was a keynote speaker at the conference and participate in agenda planning for the SIIA's SaaS events. I spoke — for a fee — at an Oracle event in January, and Salesforce.com, mentioned below, is also a client].

In the midst of a discussion of security, Thanawala made a passing comment that multi-tenancy isn’t a prerequisite for SaaS. Panel chair Bill McNee, CEO of analyst group Saugatuck Technology, immediately challenged this assertion with his own observation that multi-tenancy was fundamantal to SaaS. Now under pressure to defend his position, the Oracle spokesman responded that SaaS ISVs in Oracle’s partner network employ a range of different architectures. He went on to cite Intacct in support of his case, saying that the on-demand financials vendor runs its customers on separate pods, each with its own separate Oracle database.

It was a fateful example to choose. Incarnating every conference speaker’s worst nightmare, up stepped conference organizer David Thomas, executive director of the SIIA’s software division, taking a microphone to flatly contradict Thanawala: “I’m the former CEO of Intacct and I can tell you for a fact that’s not the case. Intacct’s architecture is completely multi-tenant,” he said.

Having participated in a webinar only the previous month with Intacct’s CTO Aaron Harris, Thanawala was disconcerted by Thomas’ intervention but held his ground — as did Thomas. In the coffee break afterwards, the two of them could be seen locked in discussion as they sought to settle their differences.

The simple explanation for Thanawala’s discomfort is that there are many degrees of multi-tenancy, whereas he was using the term solely in its purest sense, as implemented by Salesforce.com. Intacct’s model — espoused by many leading SaaS vendors including NetSuite — is equally valid (although not in Salesforce.com’s eyes). There are lesser-degree variations below these purist implementations. Here’s a rundown of the main differences between the Salesforce.com model, the Intacct model and Oracle’s own preferred ‘pod’ approach: Read the rest of this entry »

May 9th, 2008

VCs put big sums into SaaS

Posted by Phil Wainewright @ 3:16 pm

Categories: Intacct, Venture capital, Xactly

Tags: Software-as-a-service, Rearden Commerce, Analytics, Sales Compensation, Intacct, Software As A Service (SaaS), Sales Force Management, Sales Strategy, Emerging Technologies, Sales

Several SaaS vendors have announced some big funding rounds the past couple of weeks, which suggests that SaaS is still able to command strong VC support where vendors can show good traction for their offerings. The three rounds that caught my eye were:

• Rearden Commerce, $100 million. Announced Tuesday, this substantial investment (PDF release) appears to have been led by features an important new backer: credit card powerhouse Chase, part of the JP Morgan Chase empire (the guys who bought Bear Stearns). Rearden [a past client, see disclosure] automates booking of a wide range of travel and entertainment in a way that integrates with employee workflow at the same time as complying with corporate purchasing policies. It already snagged a £22.5 million investment from American Express eighteen months ago, and Amex has put money into this round too, along with Rearden’s previous VC backers. However it seems likely that the bulk of the money comes from Chase (PDF release), and if the Amex precedent is any guide, it’s a prelude to Chase rolling out the Rearden service to its corporate cardholders (and perhaps ultimately consumers too). Rearden has built a broad customer base of more than 1,700 — mostly since it signed the Amex deal — and according to Techcrunch it has close to $1 billion worth of transactions going through its system.
• Xactly, $30 million. Last week, sales compensation management and analytics vendor Xactly announced a new round of $30 million in revolving credit and equity to finance further global expansion and product development. Earlier in the week, Xactly had announced an analytics product that builds on the data collected in the course of enabling its core sales compensation functionality, and it has ambitious plans for further product announcements based on this core information store. Meanwhile, customer growth continues strongly, with the average customer having around 250 subscribers.
• Intacct, $15 million (on top of $14 million secured last June). Recovering strongly from a period a couple of years ago when it lacked direction, venerable on-demand midmarket ERP vendor Intacct has seen something of a resurgence since Mike Braun took over as CEO. This is the second injection of finance negotiated by Braun and provides the fuel for some long-overdue expansion. Intacct is developing some interesting channel strategies, which I hope to discuss in a separate posting in the near future.

Of course, there is a school of thought that says that once a trend reaches the point where mainstream media (let alone bloggers) start to cite it, then you can probably bet that it’s over. So I’m interested in feedback from readers here. Is it still possible to secure VC funding for SaaS ventures or has the funding climate tightened significantly in the past few months? Please post your views to Talkback.

June 28th, 2007

Is there life after QuickBooks for Intacct?

Posted by Phil Wainewright @ 12:19 pm

Categories: ERP, Intacct, Venture capital

Tags: Intuit QuickBooks, Phil Wainewright

A few months ago, I interviewed Mike Braun, CEO of Intacct, literally five minutes after he showed up for work on his first day at the company. Understandably, he wasn’t able to say much at the time about what changes he planned to make at Intacct, but he did promise to get the company noticed. This week the company announced a $14 million slug of new funding that will give Braun the resources to deliver on his early promise.

Braun has identified a clear mission message for online accounting vendor Intacct, as he explained to me last week in a pre-brief ahead of yesterday’s announcement: “We really want to be the company that’s about life after QuickBooks.”

Braun (pictured) believes Intacct is ideally suited to fill what he sees as a gap in the market, serving companies that grow beyond the typical QuickBooks customer profile of 20 employees or less. “I’ve been one of these companies several times in my life, and the problem is, the next best alternative is really expensive,” he told me. Growing companies end up writing out big checks when they “graduate” beyond QuickBooks to packages from Microsoft, Sage and other traditional vendors. The typical cost of implementation is in the $75-100k range. Compared to paying “a couple of hundred bucks” to get started with Intacct the choice should be no-brainer, Braun believes.

Of course Netsuite is the on-demand vendor that instantly springs to mind when thinking of such companies, but Braun observed that “Netsuite is doing a good job of moving away from the market. They’re positioning themselves against SAP. QuickBooks graduates aren’t thinking about graduating to SAP.”

In addition, Braun makes the point that the issue for such companies is more than simply switching out one product for another. It’s also about changing the way the business operates as it becomes a larger, more complex organization. “It’s not just a product change, it’s a change in business process,” he explained.

The challenge will be getting the message out, which Braun has a number of strategies to do. But gaining visibility will be hard. This week’s announcement got a small write-up in Red Herring, but little else besides this posting. Perhaps people have given up on Intacct ever making a big splash in the market, having already worked its way through $50 million plus of venture funding in earlier rounds. With the right leadership, though, I’d say the new round of $14 million could be enough to turn around Intacct’s fortunes. So far, Braun seems to be giving the company the leadership it needs. It’ll be interesting to see how the story progresses.

February 1st, 2007

CEO switch signals change of pace at Intacct

Posted by Phil Wainewright @ 9:25 am

Categories: ERP, Intacct

Tags: NetSuite Inc., Callidus Software Inc., CEO, Intacct, Mike Braun, Software As A Service (SaaS), Cloud Computing, IPO, Recruitment & Selection, Emerging Technologies

On-demand ERP vendor Intacct has a new CEO at its helm today, its third in three years. Mike Braun has taken over from Bob Jurowski, who held the post for just under two-and-a-half years, and has now “decided to pursue other interests,” according to the company’s press statement. Jurowski joined in August 2004, taking on the job from founding CEO David Thomas who had also left “to pursue other interests.” Thomas subsequently became executive director of software at the SIIA trade association.

I spoke to Braun at 8am PST this morning, which he pointed out to me was “the first minute of my first day in this job.” I’d arranged the call because I wanted to find out what the change of CEO meant for Intacct. The company has always been a solid presence in the SaaS landscape, but has never commanded the visibility and attention of brasher names like Salesforce.com and NetSuite. And while other vendors are being talked of as potential IPO prospects (NetSuite, Successfactors, Rearden Commerce see disclosure), Intacct is still not at that stage. Was the decision to change CEOs one more time a sign of impatience on the board or among investors?

While paying tribute to what Intacct had achieved under Jurowski’s leadership — “I don’t what to be critical in any way of what’s been done,” he told me — Braun made it clear that he has a brief to get Intacct more noticed. “The awareness level of Intacct has to be be higher for us to grow faster.”

Braun is already chairman of Callidus Software, an enterprise incentive management vendor, and while Callidus maybe can learn some SaaS tips from Intacct, there may be more crucial learning traffic flowing back to Intacct about selling to larger enterprises. Braun also has long-term experience at IBM — including an involvement in the launch of the original IBM PC — so he certainly knows the mainstream computing industry.

Another feather in Braun’s cap is as a co-founder of The Interim CEO Network, which provides short-term chiefs to Silicon Valley companies. But he was quick to scotch any notion that his appointment to Intacct is an interim move: “Definitely not. I’m here for the duration.”

November 20th, 2006

So much more than software, as a service

Posted by Phil Wainewright @ 4:04 pm

Categories: Business applications, Business models, Intacct

Tags: Software, On-demand, Small Business, Winweb, Cloud Computing, Phil Wainewright

Today, on-demand financials vendor Intacct teamed up with National Bank of California to announce an integrated solution for small businesses. It links electronic banking into Intacct’s accounting and supply chain software suite so that customers can, for example, deposit checks electronically and have the cleared funds show up in their cash balances later the same day.

It’s yet another example of the trend I’ve recently highlighted among traditional business services giants, who are teaming up with (and sometimes acquiring) SaaS vendors to enhance their service offerings to customers.

Increasingly, SaaS is transcending the old model of siloed business applicationsThey’re not selling software, they’re focusing on what customers want to achieve and replacing it with a new end-to-end vision of process automation that teams up software with other corporate resources to deliver a finished business result. This is yet another example of how far behind the game conventional software vendors have fallen. They are still struggling to port their applications to a Web-hosted model and have not even begun to think of how to go about linking up with other on-demand processes. In fact, their conventional way of doing business is to load up all kinds of professional services costs that penalize customers who want to engage in that kind of cross-cutting process integration. They simply do not get it.

Meanwhile, the new generation of on-demand vendors growing up to serve the small business market instinctively realizes Read the rest of this entry »