SaaS 2.0

Have a magical day !

noreply@blogger.com (Daniel Druker) — Tue, 10 Nov 2009 19:10:00 +0000

I've reached a new career milestone - last week I presented at the AICPA Not for Profit conference at Disneyland in Southern California and this week I'm spending time at both the Sleeter next Generation Accounting Technology conference and the AICPA controllers workshop at Disneyworld in Orlando Florida.

Across all three conferences, I'm talking to more than 1,000 finance and accounting professionals about cloud computing and how it applies to them. At Sleeter, we had a whole day dedicated to showing accountants how to move their practices on-line.

It's an easy story to tell - people are getting more and more comfortable with their use of cloud computing as consumers, so it is relatively easy for them to make the leap for how the same things they like about the consumer cloud should apply to their business applications. I got great feedback and questions from each of the presentations - and more and more I am finding that people who are already doing cloud computing are jumping in to answer their peers questions about security, productivity and ROI.

Disneyland on Thursday, Disneyworld the following Monday. Plus the remnants of a hurricane are rolling into Orlando today - a great backdrop for talking about "cloud computing."

Productive at 36,000 feet

noreply@blogger.com (Daniel Druker) — Wed, 04 Nov 2009 04:28:00 +0000

About a year ago, I posted to this blog about using cloud-based business applications while sitting on a beach on an Island in the Indian ocean off the coast of Thailand. That symbolized to me that cloud computing is getting close to reaching everywhere I’m likely to go on the surface of the earth.

A year later, as I write this, I’m flying on United Airlines flight 19 from JFK to San Francisco coming back from meeting with the AICPA in New York. I must have done something good – I find myself upgraded to business class, my laptop is plugged into the power outlet in the seat, and I’ve been constantly connected to the Internet since minutes after take-off. United has a new service called GoGo that provides a Wifi hotspot on the airplane - it's currently free but will eventually cost $13 per flight - what a bargain.

Instead of 6 hours of downtime, I am getting real productive work done. I’m completely caught up on email and down to less than one page in my inbox. I logged into Salesforce to check out our pipeline. I logged into Intacct to review my department dashboard and actuals, I submitted a draft expense report for myself for the trip, and I approved the expenses in my queue for my team. Fast, reliable, encrypted and secure from 36,000 feet, somewhere over the Midwest. And now I'm posting this blog entry live from the airplane as well.

We really are getting close to the vision of “always on / always connected” that cloud computing and Internet ubiquity promise. The combination of a ubiquitous Internet connection with cloud-based business applications that are always available turns six hours of downtime that I used to spend reading trashy paperbacks or watching bad movies into real productive hours. I'm totally caught up, I'm on top of my business, and I can spend more time with my family tomorrow instead of being that much more behind from my trip. Just great great stuff.

Dogfood is Yummy

noreply@blogger.com (Daniel Druker) — Wed, 23 Sep 2009 01:51:00 +0000

Given I'm not shy particularly shy about talking about how I think the world of business applications is moving to the cloud, I get lots of questions about what we are using to run our own business here at Intacct.

To give you some context about our size - Intacct is no startup - we are a classic mid-sized company with significant complexity to our business - we have more than 2,500 customers, more than 100 business partners, operations across the US and in India and multiple channels of distribution.

I'm pleased to say that we have done a good job both of "eating our own dogfood" and running our business almost entirely on cloud-based applications. The picture at the right shows you the major cloud applications we are currently using - of course we use Intacct comprehensively for our financials and we've adopted a number of other best of breed cloud applications across our business. Nearly all of our applications are connected to each other using pre-built integration or standard web services.

We've got no on-premises software to speak of in the company outside of Microsoft Windows and Office.

Supporting all of this, we've got one person in IT - Jason is kind of like our maytag repair guy - he spends most of his time setting up laptops for our new hires and waiting for PCs to break.

The TCO for our cloud applications is fantastic compared to deploying all of this in old-style on-premises software and because of the cloud we're doing tremendously more than was possible even a few years ago for companies our size.

Another thing I really like about our best of breed systems approach is that it is relatively easy to swap out applications when we find something new that we like better than what we have. I think this is particularly important in the cloud computing world - where innovation is happening so fast you can't afford to get stuck with a single vendor.

So yes we are eating our own dogfood here at Intacct - and it tastes pretty good.

You've got the power

noreply@blogger.com (Daniel Druker) — Sat, 15 Aug 2009 21:21:00 +0000

I'm pleased to report that Intacct recently passed the milestone of 50 positive reviews on the Salesforce.com Appexchange - 56 in all as of this writing. By my count, this makes Intacct #6 out of more than 800 applications reviewed on the Appexchange as measured by the number of positive reviews.

Where I am particularly proud of this milestone is that the reviews are nearly all from CFOs, finance VPs and controllers - not the usual audience of sales and marketing executives that make up the majority of the Salesforce community.

I'm very thankful for the 56 people who've spent the time to write-up their reviews of Intacct - if you read them you'll see that they are passionate about the product and really receiving great value.

The broader topic that this gets me thinking about is how the Internet changes the process of evaluating and selecting technology. I'm involved nearly constantly with people who are buying cloud computing applications - and I would say that the majority of them aren't yet taking full advantage of all the new tools they have to help them make sure that they are making the right decision, particularly the new community and social networking resources that are now available.

In the old days (say pre-1995) nearly all of your information about buying technology products came from your sales person - whether it was product or technical information or contacts at reference customers using the products - the only easy way to get it was from the salesperson at the vendor itself. Since information is power, it was the salesperson who really held the power in the process.

Today - certainly post 2005 - the technology evaluation process is just so much different - the power of information is shifted to you - the buyer - since you can find out just about anything with a few clicks of your mouse.

It's now easy to search the web for both positive and negative information about products you are thinking about adopting - my admittedly biased favorite examples in the ERP market being the infamous Web search for "NetSuite Nightmare" which currently returns about 64,000 results and for "SAP Failure" which returns 5.9 million hits.

Similarly, business oriented social networking sites like LinkedIn and Twitter and the afforementioned Appexchange offer a wealth of information if you are looking at acquiring a new technology - you can both search to see what people are talking about and also post questions to experts from these communities who are currently using the products that you are thinking of adopting.

You can also discover lots of information that was difficult to find in the old days that can really help you in your selection and contracting process - what pricing, discounts and license terms are people getting lately? How do current customers like the support they are receiving? How is the vendor doing against their SLA? What is the subscription renewal process like? How have they found the company culture to work with? Would they buy again? People seem to be happy to answer questions like these on the social networks.

Combine this dramatic change in your ability to get information about technology products with the possibility for you to test drive most cloud computing applications before you make a purchase and you can see why I think that the Internet and cloud computing have together dramatically shifted the power from the seller to the buyer. And that's a good thing - more informed buyers make better purchasing decisions which are better for both the buyer and the seller.

Cloud / SaaS Total Cost of Ownership Framework

noreply@blogger.com (Daniel Druker) — Wed, 15 Jul 2009 16:05:00 +0000

A very common question in the world of Cloud / SaaS applications is "How do I make an apples to apples comparison of the total cost of ownership of Cloud / SaaS applications vs. their on-premises software counterparts?" At some point, I hope this will become "settled law" - but until then I think it's important to revisit and update with details from real-world implementations.

Two of the best documents on the Internet I've seen on Cloud / SaaS ROI and TCO come from Ray Wang at Forrester Research and from the Software and Information Industry Association.

You may also recall the recent Nucleus Research case study on an Intacct implementation at nGenera that showed $715,000 in savings, 589% ROI and payback in just two months - below I'll provide some color on where nGenera and Nucleus found such an impressive return by adopting cloud financials.

One trend I'm seeing is that as cloud / SaaS applications get more and more popular, the on-premises software vendors are more aggressively pushing FUD and TCO models that only compare the initial purchase price of on-premises hardware and software to the ongoing subscription price of Cloud / SaaS counterparts. Apples to apples TCO / ROI comparisons must also include ongoing human costs for operating and maintaining the system over 7 to 10 years, which is the typical lifecycle of a major application investment. You can be quite sure that you will find the majority of Cloud / SaaS TCO and ROI in these ongoing operating cost savings, which is why the on-premises software vendors try to exclude them.

Below is my attempt at a framework for making these types of TCO and ROI comparisons, with demonstrative examples from Intacct and the financial applications marketplace.

Capital savings: Software and Hardware

No need to purchase Infrastructure Stack Software - By definition, Cloud / SaaS applications disintermediate technology infrastructure - Eliminating the need for software purchases like Client Access Licenses, Windows Servers, Application and Database Servers, Middleware, SharePoint, Citrix servers and VPN’s for remote access. Also remember most buyers will need two copies of each of these pieces of infrastructure software, one for development/test and another for production. With Intacct all of these pieces are included in the monthly subscription fee.
No expenditures on hardware – Also by definition, Cloud / SaaS applications require no server hardware, network storage, backup systems, disaster recovery systems, power or cooling systems, data centers, utility costs, etc. As above, most buyers will need two sets of systems for development / test and production. With Intacct, our applications run in Tier One IBM data centers, with disaster recovery provided via Sungard and Intacct foots the bill. All you need is Internet access.
Reduced need to purchase third party tools, modules and applications - A less obvious place to find ROI / TCO is that many SaaS applications include built-in or bundled functionality that eliminates the need for separate, add-on software tools, modules and applications. This is particularly true for new SaaS applications vs. older on-premises applications. For example, Intacct includes built-in reporting, business intelligence, dashboards, portals, workflow, employee expenses, multi-currency, CRM integration, financial consolidation, customization services, web services and much more, each of which are usually add-on or third party tools, modules and applications in the traditional on-premises software financial applications world.
No software or hardware replacement needed in ongoing years - A common mistake I see in TCO models is that only initial purchases are considered for on-premises software and hardware over a multi-year TCO lifecycle. More accurate models should break the TCO lifecycle into three section - initial deployment in year 0, ongoing operation and maintenance ongoing, and upgrade / replacement costs for hardware and software not covered under maintenance somewhere in between year 3 and year 5. Requiring periodic upgrades and purchases of new software on top of maintenance is part of the business model of most on-premises software companies and should be included in any TCO / ROI calculation. Servers, storage and other hardware components wear out and need to be replaced, typically on a three or four year schedule.

IT operations savings

Reduced / eliminated spending on IT operations - This is usually one of the top sources of ROI / TCO savings in the Cloud / SaaS world. One of the most common mistakes I see in TCO models is not taking into account the staffing costs in the IT department for deploying, operating and maintaining applications and underlying infrastructure. In Cloud / SaaS applications, the vendor takes on all of the costs associated with installing, running and maintaining the applications, the underlying software infrastructure and the associated hardware. For Intacct clients, this represents saving at least one full time IT professional ongoing and can be much more for larger deployments. As an aside - this doesn't always mean eliminating jobs in the IT department - it can also be seen as removing unnecessary, low value added work from IT, which allows the IT team focus on more strategic, value added services.
Reduced support costs - The cost to the customer organization, both in downtime and in human costs of diagnosing and fixing problems is a major ongoing part of software TCO. A major improvement in the SaaS / Cloud world is that through the magic of the Internet both the support people at the vendor or VAR and the client can be logged into the system and looking at the same screen / data / problem at the same time. The customer doesn't have to describe the problem to the support rep anymore - the both can look at it at the same time from the comfort of their own web browser. The ongoing support savings are significant.
No Application and Infrastructure Re-implementation costs in years 3 to 5 - Most TCO models miss the need in the on-premises software world to re-implement and upgrade to new versions of either the applications or the underlying infrastructure stack. This is unnecessary in the world of Cloud / SaaS applications like Intacct since the vendor continuously keeps the client on the most current versions.

Departmental / Business operations savings

Savings through improved application functionality, process improvement, automation and integration - Cloud and SaaS applications are by definition far more modern than the older on-premises software applications they are replacing - so an important part of TCO is to look at departmental effectiveness before and after implementing new applications. For example, Intacct’s order to cash functionality is particularly efficient, helps our clients reduce or eliminate the need for the order management function in the business. Similarly Intacct eliminates many manual processes and spreadsheets, allowing the finance team to do far more with fewer people. Intacct clients typically identify savings of one or two headcounts in finance as part of their deployment.
Savings through higher worker productivity - Cloud and SaaS applications typically offer higher worker productivity because of the always-on, always connected aspects of cloud computing. Because workers can access the system anytime and from anywhere, they typically get more done than if they can only use the system in the office during normal business hours. For example Intacct clients can get their work done anytime and from anywhere, go paperless, and extend web-based portals, dashboards, reports and employee expenses to all employees in all locations – eliminating wasted time and paper processes - and extending productivity improvements beyond the finance department and across the business. These productivity improvements quickly add up, and in an average Intacct implementation can free up one or more full time equivalents across the business.

Additional areas in a complete TCO / ROI model

Reduced Risk / Project Failure - Advanced TCO models should reflect the higher risk of project failure when deploying on-premises software applications. The hardware and software that must be procured, install, configure, optimized, integrated and tested in the on-premises world carries a very non-trivial risk of failure - thus on-premises ERP implementations have a widely documented and much higher rate of project failure than SaaS / cloud counterparts. You can account for this in a TCO model by adding in an extra cost line to your model - a "project risk reserve." Based on my experience, I'd suggest a risk reserve of 25% of the project implementation costs for financial applications. Intacct has a 98% project success rate - contrast this with what you find when you Google "ERP failure rate" - you'll see failure rates from 40% to 60% for on-premises software implementations.
Faster Time to Value - With SaaS / Cloud applications, there is no hardware or software to procure, install, configure, optimize or test. In your implementation timeline, you skip all of these steps - which offers both cost and time savings. Since time is money, your TCO model should include the acceleration of value you get with SaaS / cloud applications - because you will begin using the new, higher value system much sooner than you could in the on-premises software world. In the Intacct world, implementation times are typically 90 to 180 days faster than for on-premises alternatives - the larger and more complex the implementation the bigger the difference.
Easier to Adapt - It is much easier and faster to modify functionality and business processes in SaaS / Cloud applications than in on-premises counterparts. This is because SaaS / Cloud applications are designed to be configured by line of business people, whereas making changes to on-premises software tends to require programming and customization by IT professionals. Because of the ease of configuration, businesses that deploy SaaS / cloud applications make relatively frequent, iterative changes to evolve their processes to match changing market or business conditions - which is rarely possible to do in the on-premises software world. The business benefit to reflect in a TCO model is in the savings or increased revenue you expect from improved operations that result from being able to adapt more quickly to changing business conditions.
Superior Operations - For all but very large enterprises, the SaaS / Cloud vendors will include substantially better operating capabilities than the internal IT department is likely to be able to provide cost-effectively as part of the service. This means with SaaS / Cloud applications you get higher availability, better performance, faster problem resolution, better backup and recovery, fewer issues with maintenance, 24x7x365 operations, less chance of data loss etc. than you would get if you were running the applications yourself in your own IT department. A thorough TCO analysis would include these superior operating characteristics as an added expense to on-premises alternatives, or as an added benefit on the SaaS / Cloud side of the equation. Intacct applications run in tier one IBM data centers, with disaster recovery via SunGard, and with extensive service level guarantees that are far superior to what most internal IT departments are able to cost effectively provide.
Other areas - To be complete, there are other areas that a complete TCO / ROI model should cover, but my experience is that they come out about the same whether you choose to deploy SaaS / Cloud vs on-premises software.These areas include professional services costs for the initial configuration and roll out of the applications, ongoing changes to the applications to adapt to new business processes and training for both administrators and end-users. You'll likely identify additional areas in your complete TCO / ROI analysis where things come out about the same - my attempt in this post was to highlight the differences that come up over and over again when comparing Cloud / SaaS applications with on-premises software.

The bottom line

The bottom line of this post is that an overall TCO analysis that makes true apples to apples comparison of SaaS / Cloud vs on-premises applications should include a thorough analysis of costs and return across at least three components - Capital expenditure, IT operations and Departmental /Business operations. The TCO model should extend over the total expected lifecycle of the applications - I'd suggest 7 to 9 years in the world of financial applications - and break the overall lifecycle into three sections - initial deployment, ongoing operations and upgrade/replacement in year 3-5.

You may of course choose to include or to not include each of the above categories as you do your own analysis and you may choose your own lifecycle for how long you expect to leverage your new systems. What I think you'll find though is the above framework should be helpful in making a more apples to apples comparison that draws out the true costs and opportunities whether you are looking at Cloud / SaaS or on-premises deployments.

Cloud / SaaS Service Level Agreement Redux

noreply@blogger.com (Daniel Druker) — Fri, 26 Jun 2009 16:34:00 +0000

One of the most popular posts on this blog continues to be my SaaS Service Level Agreement post from last year. I've also published several additional pieces since covering additional SLA best practices - whether you are looking for a cloud computing SLA, cloud SLA, a SaaS SLA or an on-demand SLA.

I thought it would be useful to re-summarize and bring up to date my recommendations both for what people shopping for SaaS or Cloud Computing solutions should be asking for in Service Level Agreements, and what vendors should consider offering in their SaaS and Cloud Computing SLAs.

In my experience, there are four key areas to consider in your SLA:

First is addressing control: The service level agreement must guarantee the quality and performance of operational functions like availability, reliability, performance, maintenance, backup, disaster recovery, etc that used to be under the control of the in-house IT function when the applications were running on-premises and managed by internal IT, but are now under the vendor's control since the applications are running in the cloud and managed by the vendor.

Second is addressing operational risk: The service level agreement should also address perceived risks around security, privacy and data ownership - I say perceived because most SaaS vendors are actually far better at these things than nearly all of their clients are. Guaranteed commitments to undergoing regular SAS70 Type II audits and external security evaluations are also important parts of mitigating operational risk.

Third is addressing business risk: As cloud computing companies become more comfortable with their ability to deliver value and success, more of them will start to include business success guarantees in the SLA - such as guarantees around successful and timely implementations, the quality of technical support, business value received and even to money back guarantees - if a client isn't satisfied, they get their money back. Cloud/SaaS vendor can rationally consider offering business risk guarantees because their track record of successful implementations is typically vastly higher than their enterprise software counterparts.

Last is penalties, rewards and transparency: The service level agreement must have real financial penalties / teeth when an SLA violation occurs. If there isn't any pain for the vendor when they fail to meet their SLA, the SLA doesn't mean anything. Similarly, the buyer should also be willing to pay a reward for extraordinary service level achievements that deliver real benefits - if 100% availability is an important goal for you, consider paying the vendor a bonus when they achieve it. Transparency is also important - the vendor should also maintain a public website with continuous updates as to how the vendor is performing against their SLA, and should publish their SLA and their privacy policies. The best cloud vendors realize that their excellence in operations and their SLAs are real selling points, so they aren't afraid to open their kimonos in public.

These ideas leads to specific SLA terms that I recommend cloud / SaaS buyers discuss with their vendors, and that SaaS / Cloud vendors should consider including in their service level agreements:

Control oriented Service Level Agreement Terms

Establish a system availability SLA, based on average monthly availability, with bonuses for overachieving and increasingly steep penalties for downtime beyond the agreed level.
Establish a system response time SLA, based on average monthly response time, with penalties for slow system performance.
Establish a fail over window for disaster recovery SLA in the case of a catastrophic failure of the vendor's infrastructure.

Operational Risk oriented Service Level Agreement Terms

Ensure that you can get your data back if you ever decide to leave and that it is unambiguous that you own your data.
Ensure that the vendor will assist you in migrating away, for an appropriate professional services fee.
Ensure that you can retain your data on the vendor's system for an appropriate fee if you ever need to stop using the service but don't want to lose access to your data.
Review the vendor's privacy policy and make sure that you understand what happens according to the SLA if there is ever a privacy breach.
Ensure that the vendor undertakes annual SAS70 Type II audits, and that the vendor further undergoes annual third party security and penetration testing.

Business Risk oriented Service Level Agreement Terms

Establish an error resolution time SLA, with different windows for different severity levels (system down vs. workaround) and again with penalties for not being responsive.
Establish criteria for the quality and timeliness of professional services engagements with bonuses for implementations that go better than planned and penalties for those that do not.
Look for guarantees around proactive communications - look for monthly product feature updates and quarterly roadmap updates and understand how your requests for new features and product changes will be prioritized.
Ask for money-back guarantees - cloud vendors may be willing to offer you a money-back guarantee, particularly if you are willing to commit to a pre-agreed upon scope of work and criteria for success. If you are comparing multiple vendors this can be a great way to reduce your risk or at least to understand how confident the vendors are that they will meet your needs.

Penalties / Rewards and Transparency oriented Service Level Agreement Terms

In each of the above sections, ensure that the vendor documents the methodology for measuring performance and calculating penalties and rewards.
Understand whether you will be issued an automatic credit if a failure occurs that impacts you, or must you ask your vendor for a credit to receive one
Understand whether you can you get out of your contract if the vendor continuously and materially fails to meet their SLA
Ensure the vendor guarantees transparency and proactive notification of system availability, production issues, scheduled downtime and pending updates.
Review the vendor's public real-time status website that shows their operational performance. If they don't have one, think about looking for another vendor.
Review the vendor's published service level agreement and understand how it applies to you (and how it compares to this list. If the SLA isn't published on the company website, decide whether that is a red flag to you.

The secret sauce behind all of this is that cloud vendors can do all of these things much more cheaply and a lot better than nearly all of their clients can, because can spread the cost of doing all of this well across thousands of clients. The best cloud vendors have figured out that this is both a huge competitive advantage and that it drives significantly value to their clients.

I realize this is a very long post - but I wanted to try to make it comprehensive and I hope that both prospective SaaS / Cloud buyers and vendors find it helpful. At Intacct, we publish our SLA, which we call "Buy with Confidence" as well as our privacy policy and our real-time system status.

Cloud Financials - 500%+ ROI, Two Month Payback

noreply@blogger.com (Daniel Druker) — Sat, 20 Jun 2009 17:28:00 +0000

This week Nucleus Research issued a press release on an ROI study they recently completed on the financial impact of deploying cloud financials. The punchline: 589% ROI, a two-month payback and $715,000 cost savings over three years. They studied the deployment of Intacct at nGenera, an innovative services company in Austin, Texas.

The key benefits of cloud financials identified by Nucleus were:

Reduced IT costs. Consolidating systems and going on demand has enabled nGenera to reduce ongoing software, hardware, disaster recovery, and support staff associated with those systems.
Avoided additional finance hires. By enabling employees who know their business to work remotely and driving other efficiencies through Intacct, nGenera has been able to continue to grow without the need for additional financial management staff.
Increased end user productivity. End users of the application can now enter their time and expenses electronically in the system, saving end users about an hour per month and improving project accounting.

According to Rebecca Wettemann, the VP of Research at Nucleus:

We are seeing more companies move to on-demand solutions for both cost savings advantages and increasingly for the business agility it provides. nGenera, for example, was able to reduce overhead and ongoing IT costs, and also retain its best talent wherever they reside”

When I first saw the 589% ROI number, I was concerned it was so high that it looked less than credible. But Nucleus are professionals at studying and calculating ROI - it's what they do for a living and they've done it at thousands of companies.

At end of the day, whether you want to call this SaaS ROI, or cloud ROI on on-demand ROI, I think it's great to document specifically how the new model delivers value for the customer.

The complete Nucleus ROI study on nGenera is available here (short registration required)

More Sage Insight

noreply@blogger.com (Daniel Druker) — Sun, 14 Jun 2009 23:32:00 +0000

I'm way behind on postings lately - lots of good stuff stored up I'll try to get out out in the next few weeks.

I've been spending a lot of time with folks from the Sage VAR community over the last several months - doing many of demonstrations of Intacct and lots of education about cloud computing in general. And I've learned a ton from them - how their businesses work, what their aspirations are, what their lives are like today, and both their excitement and concern about cloud computing.

I've written quite a bit here before about the financial model of cloud computing for the channel - the value of the subscription revenue model that comes with cloud computing to the traditional software VAR community in terms of its predicable cash flows and revenue stream and positive impacts on the valuation of the VARs business itself.

Having met with perhaps 30 Sage VARs in the last couple of months, I'm learning how they react to cloud computing and in particular to Intacct given their context - some of these folks have been in the trenches for 20 or more years reselling financial applications and their wealth of knowledge is just tremendous.

The consistent reaction has been largely amazement about how far cloud financials have come. It turns out that Intacct has lots of features built in that are either not available, hard to use or are third party add-ons in the Sage MAS product lines - some of the top Intacct features the VARs positively react to over and over again are dashboards, financial reporting, business intelligence and operational analytics, workflow and approvals, multi-entity and multi-currency support with financial consolidation and built-in contract management with revenue recognition. There was also consistent surprise at how easy it is to customize Intacct and how much customization can be done.

Where it gets interesting is when we start to talk about the operational aspects of deploying Intacct - the idea that they can build re-usable templates for a particular industry or client focus that they can deploy over and over again in cookie cutter fashion seems to really hit home. The idea of making the product their own, and building out and selling vertical versions of the applications without having to do a lot of coding seemed to be universally attractive.

Support was another interesting area. The idea that they can (with permission) securely log into their clients' application from anywhere and anytime with a web browser to help provide support and diagnose problems - since they can see exactly what their clients see, and both the client and the VAR can even be logged in at the same time looking at the same thing - seemed to really cause some aha's.

What I didn't understand going into these meetings was how much time the VARs currently have to spend on-site diagnosing problems, re-installing software and generally providing PC support, which is often unbillable and certainly low value added work. The idea of being able to do all of this remotely and collaboratively with clients just seemed to be like a breath of fresh air.

I've written here before many times and it's starting to become widely accepted that the cloud computing model is both better for the client and better for the vendor. At the same time it's becoming crystal clear that cloud financials are far better for the VAR community too - they can deliver a better product to their client, their people can be far more productive, they can monetize their intellectual property, and they can build a business based on predicable, recurring revenue streams.

Intacct Wins the 2009 SIIA Codie Award for Best Financial Software !

noreply@blogger.com (Daniel Druker) — Wed, 06 May 2009 16:58:00 +0000

Last night Intacct was awarded the 2009 SIIA CODiE award for Best Financial Software.

More than 850 products were nominated for the CODiEs this year.

What's especially gratifying about winning the CODiE is that they are only given out after extensive evaluation and peer review - the SIIA is the Software & Information Industry Association and the CODiE Awards hold the distinction of being the software industry’s only peer-reviewed awards program.

According to the SIIA, "Now in its twenty-fourth year, the CODiE Awards program has raised the standard for excellence and serves as prestigious representation of outstanding achievement and vision in the software and information industry."

The complete list of 2009 winners is here

Intacct Joins Forces with the AICPA and CPA2Biz

noreply@blogger.com (Daniel Druker) — Tue, 07 Apr 2009 12:00:00 +0000

Today is an exciting day for the Intacct community.

The AICPA, the largest professional association in North America, today announced that they have endorsed Intacct as their preferred provider of financial applications. CPA2Biz, a subsidiary of the AICPA, will begin distributing Intacct to more than 45,000 AICPA member firms and to their millions of small business clients. The AICPA, CPA2Biz and Intacct will spearhead a major program to drive the adoption of cloud computing and Intacct across more than 350,000 AICPA members, the companies they work for and their clients.

We started working on this new alliance with the AICPA and CPA2Biz teams more than a year ago. Their motivation is in improving the financial performance of millions of small and midsized businesses and increasing the productivity of the accounting profession by moving financial processes onto the Internet. They have done extensive research on the benefits of the adoption of cloud computing by the profession and tremendous diligence on Intacct. You can imagine the AICPA does not make a move like this lightly.

We have also established a joint development relationship. We’re working hard with the AICPA and CPA2Biz to make their intellectual property available within Intacct applications. For one example, imagine 100 different micro-vertical financial templates in Intacct, blessed by the AICPA as the best way to run law firms, restaurants, construction businesses and more. And built-in business guidance from the AICPA – like best practices for handling new transparency requirements, or benchmarks for key financial measures and how you compare to your peers.

The AICPA and CPA2Biz have a great track record of executing partnerships like this. Five years ago, they endorsed PayChex as their preferred payroll system; today, PayChex has more than 500,000 customers with more than 25,000 AICPA member firms are recommending Paychex to their clients. They don’t do things in a small way – it’s all about scale.

So what does it all mean?

First, the endorsement of cloud computing for core financial applications by the largest professional organization in North America is milestone in itself - the AICPA clearly sees tremendous benefits for their membership in moving financial processes into the cloud.

Second, over time, literally millions of small and midsized businesses across America will be touched by this new alliance. It has a shot at improving transparency and productivity, particularly for small business, on a macroeconomic scale.

It’s also a clear indication of the AICPA’s and CPA2Biz’s vision to transform accounting services – touching nearly every sector of the US economy. As the economy recovers, I also expect our new alliance to create jobs – by making it easy for firms to hire in lower cost areas of the country and bringing stay at home and part time workers back into the profession.

More close to home, it’s a tremendous endorsement for Intacct. We expect the new partnership to drive significant growth for Intacct across 350,000 AICPA members, 45,000 member firms and millions of their clients. This means lots of new opportunities for Intacct and our channel and alliance partners.

Please join me in welcoming the AICPA, CPA2Biz and more than 350,000 AICPA members into the Intacct family.

Transforming Client Accounting Services

noreply@blogger.com (Daniel Druker) — Wed, 01 Apr 2009 20:25:00 +0000

Over the last few months, we have spent quite a bit of time speaking with many CPA firms using Intacct and and other web-based applications in their client accounting services practices.

The goal was to understand what they have learned and begin to come up with a model to quantify in dollars and cents terms the financial impact to the practice for firms that have switched to the "cloud accounting" model to collaborate with their clients over the Internet.

I've written here before about the motivation for firms to move to the on-line model. It helps with core concerns that just about all firms have - spending less time on mundane tasks, monetizing intellectual capital, becoming better trusted advisors to clients, delivering better service and more easily aligning labor supply with client demand. Just about everyone I've talked with over the last couple of years finds all of this to be kind of like motherhood and apple pie - the words "no brainer" come up a lot. So taking things to the next step seemed important - starting to quantify the value to firms that have actually made the move.

While we need to do much more work and many more interviews, dig in to more details, build out a deeper model and most importantly document lots of case studies, some of the initial findings regarding the business impact of moving client accounting services on-line are compelling.

For the average, small, client accounting services practice we spoke with - defined as two partners and three bookkeepers, with 100 clients - the value of moving on-line was reported as being close to a 50% upside in financial results. The bulk of the benefits seem to come in four main areas:

Doubling hours in proactive consultation per client from 8 to 16 per year, because the CPA always has on-line access to the client's current financials and can more easily offer timely and immediately relevant advice
Being able to serve 10 more (10% more) clients with the same staff, by reducing travel time, reducing data management issues and leveraging automation and standardization
Freeing up 50 hours per bookkeeper per quarter, by reducing the time to fix data errors, reconcile books and travel to the client
Increasing overall billings by 3% to 5% by offering higher-value, trusted trusted advisor services - which is made possible by reducing the amount of lower value added work

Note that this is clearly not a scientific survey - the findings above are based on self-reported results, the sample set is by definition biased - all the firms we have been speaking with are advocates of the on-line model and were excited about the benefits they have seen. But at least it provides some numbers and axes to look at to compare with what you are seeing in your own practice so you can see if this all feels reasonable to you. Going forward I expect to drive more formal and less biased research to thoroughly document all of this in a much more rigorous way.

If you are reading this and you are from a firm that has made the move to "cloud accounting" for your client accounting services practice, do post a comment to let use know if your experiences match what the above firms have told us they have seen.

Moving Accounting into the Clouds

noreply@blogger.com (Daniel Druker) — Sun, 29 Mar 2009 15:54:00 +0000

My personal cloud computing "buzz-o-meter" hit an all time high this week.

The Wall Street Journal had a front page story on cloud computing - which started with Larry Ellison calling it "Gibberish" last year and ended with him announcing his new "cloud-computing ready" products on Oracle's earnings call last week.

Then I picked up Business Week which ran not one but two separate cloud computing stories - one encouraging IBM to acquire Sun to get more into cloud computing, and the other trying to educate consumers about being smart in using the cloud. NPR got into the act too, with another consumer focused story.

I've been having lots of meetings with thought leaders from the accounting profession lately - in one last week I heard that Intacct should start talking about "cloud computing" instead of SaaS or on-demand or Internet and in the other that the best way to describe Intacct was to call it "Cloud Accounting."

Then yesterday I heard through my network that our new president wants to learn a lot more more about cloud computing too.

So what does it all mean?

Just about everyone in the technology profession (and apparently now even Larry Ellison) agrees that Cloud Computing is a disruptive new shift - even a bigger deal than the last major architectural transition from mainframe to client server computing. But our industry is full of buzzwords that come and go, so it's sometimes hard to sort out real vs hype.

My week above says that cloud computing has moved from a Silicon Valley buzzword to becoming something that has capturing the attention of mainstream consumers, government and business. I think the major factor driving this wide level of interest is that Cloud Computing is pervasive across our experience as consumers as well as in the business world.

And when multiple thought leaders from the CPA world, one of the most conservative professions of all, start talking about moving CPA firms to cloud computing and Intacct as "Cloud Accounting" - that says to me that we are really on to something.

New Microsoft Study - SaaS Adoption by SMB Grows to 86%

noreply@blogger.com (Daniel Druker) — Thu, 26 Mar 2009 03:53:00 +0000

A new Microsoft Study, released today, called the 2009 SMB Insight Report, says, among other things, that SaaS adoption by small and mid-sized businesses will grow to 86% in 2009.

The key trends that Microsoft identifies for Small and Midsized Businesses for 2009 all bode well for SaaS:

1. Lower Budgets Mean Less Has to Be More.
2. Strategic IT Investments Bolster the Bottom Line
3. Service and Responsiveness Are Key to Customer Retention.
4. Smaller Companies Will Increasingly Adopt Cloud Computing.
5. Better Together: SMBs Rely on Trusted Partners.

Somewhat strangely, the highest interest reported by the study for a Microsoft SaaS offering was for Microsoft Silverlight - their competitor to Adobe flash - which I have a hard time thinking of as a SaaS or Cloud Computing kind of thing at all.

So while there is nothing earthshattering here, just more good validation that SaaS is become more and more widely adopted and why, one interesting thing that may not be obvious is that Microsoft is now starting to use the terms "cloud computing" and SaaS - for those of you that don't follow this closely, Microsoft have been pushing the term "Software + Services" as their alternative to SaaS, the idea being you combine traditional desktop software with Internet services. Perhaps now that they are seeing 86% of businesses wanting to adopt SaaS, they've decided to get a little bit SaaSy too.

Cloud computing is the next generation of SaaS ?

noreply@blogger.com (Daniel Druker) — Fri, 20 Mar 2009 20:32:00 +0000

Earlier this week I found an interest article on a blog written by Bruce Richardson of AMR research. Bruce is musing about whether the combination of Compiere, an open source ERP application running on Amazon EC2 could be the next disruptive thing in ERP. The catalyst was a discussion with and an e-mail exchange he had with the Don Klaiss, ex SVP of Oracle Applications and now the CEO of Compiere, who told Bruce:

Cloud computing is the next-generation of software as a service, in which a complete software environment is licensed as a subscription from a software vendor and low-cost, secure, and dependable IT hardware infrastructure is ‘rented’ from a utility-computing provider on demand.

This new definition of cloud computing made me raise at least one eyebrow. Running your applications on the Amazon elastic compute cloud is a bit like virtualization - and I agree with Don that renting hardware in the cloud can be cheaper than installing hardware on premises. I also think it's particularly attractive for prototyping and for bursty applications, but that's for another post. But running applications on virtual hardware in the cloud is just a fraction of what SaaS is all about - and to claim it's the next generation of SaaS just doesn't pass the sniff test.

With SaaS, the vendor takes on the costs and risks of purchasing, maintaining and operating all of the infrastructure required to run the applications. This includes things like Oracle licenses, SOA platforms, security software, and a lot more. The SaaS vendor also operates the system, handling security, tuning, backup, upgrades, maintenance, disaster recovery, etc. SaaS vendors also spend lots of money and resources on operating procedures, SLAs and SAS 70 audits to guarantee things like like uptime, performance, security and quality of service.

There is also a lot of magic in multi-tenancy at the application level - with major associated benefits and economies in scaling and operations. Old single-tenant applications running in a virtual machine in EC2 by definition don't get this - above the hardware level it's still the old single instance, single tenancy, single maintenance model.

If you are running your applications on Amazon EC2, by definition you are doing all of this stuff yourself. Sure you get virtualized hardware and that's good, but buying and maintaining infrastructure is up to you, as is installing, maintaining and operating your applications. There are no SLAs, that's also up to you, and you're also on the hook for backup, disaster recovery, performance tuning, etc.

The way the SaaS business model works is that the vendors are taking all the money they save on sharing multi-tenant infrastructure and operations across thousands of clients and operations and returning it to their customers. SaaS vendors dis-intermediate both hardware and software infrastructure vendors, and are far more efficient at operations than nearly any individual customer could be. All of this savings goes right back into the pockets of SaaS customers. In the model that Don describes, you only achieve these efficiencies at the virtualized hardware level - which is only around 5% of the overall TCO for running a business application.

Even in the old ASP model, the attraction was that your vendor remotely operated your single instance, single tenant applications for you so you could get both hardware and operational scalability.

A TCO analysis would show that for business applications, all of the multi-tenancy and sharing you get with SaaS ends up being far less expensive than the costs of individual companies each running their own applications themselves on EC2. SaaS vendors get scale across everything - sharing infrastucture and operations costs, not just hardware costs, across large numbers of customers. In other words, you've got to consider the other 95% of costs that are not just related to running virtualized hardware.

So don't get me wrong - I think Amazon EC2 is great stuff - But to call putting a single tenant application on EC2 the next generation of SaaS - well I don't think so.

Intacct Walks the 2009 CODiE Red Carpet - Best Financial Software

noreply@blogger.com (Daniel Druker) — Fri, 27 Feb 2009 19:46:00 +0000

I'm happy to report that Intacct has just been named a finalist in the "Best Financial Software" category for the 2009 CODiE awards. I looked through the list of finalists, and it looks like Intacct is the only financial applications that made it through the extensive evaluation process (more than 850 products were nominated) to the finals.

The CODiE Awards, originally called the Excellence in Software Awards, were established in 1986 by the Software Publishers Association (SPA), now the Software & Information Industry Association (SIIA), so that pioneers of the then-nascent software industry could evaluate and honor each other’s work. Since then, the CODiE Awards program has carried out the same purpose – to showcase the software and information industry’s finest products and services.

The CODiE Awards hold the distinction of being the industry’s only peer-reviewed awards program, which provides member companies with a unique opportunity to earn praise from their competitors.

We're delighted to receive this recognition from our peers in the industry.

Saugatuck: SaaS in Finance: Mainstream, Growing, and Poised for Growth

noreply@blogger.com (Daniel Druker) — Thu, 12 Feb 2009 23:39:00 +0000

More evidence from Bill McNee's excellent SaaS research firm, Saugatuck, that SaaS momentum is continuing to build in the finance department.

In a major new report coupled with extensive research on SaaS in finance, just released, the analysts at Saugatuck found:

Finance executives are much less happy with their current on-premise systems’ abilities to meet important business goals. There is a gap between existing systems’ abilities to meet important business goals; and just as clearly, SaaS solutions are seen as a much more attractive and viable alternative.

So while finance executives are unhappy with their current financial applications and expect that SaaS will be a lot better. This isn't just a hope, it's based on experiences they are already having with SaaS, as Saugatuck notes:

Finance executives see broad-based value in the use of SaaS across both tactical point solutions and core finance systems, functions and roles. Nearly sixty percent of Finance executives indicated that their firms are using SaaS for mature business applications categories such as Payroll.

And it's driving more and more finance departments to adopt SaaS, which is exactly what we are seeing at Intacct:

While starting from a much lower account penetration base, SaaS adoption into key financial functions and processes will experience explosive growth of 40 percent to more than 100 percent by the end of 2010.

Saugatuck's bottom line couldn't be more clear:

As a result of Finance executives’ dissatisfaction with current systems, and market conditions that favor the acquisition and use of SaaS over many traditional, on-premise solutions, Saugatuck believes that arguments being made by many leading, legacy on-premise providers (and industry pundits) that customers will “never” swap out and upgrade their core financial systems – whether SAP, Microsoft, Oracle, PeopleSoft, JD Edwards, Sage and the like – is, at best, optimistic. If alternative solutions such as SaaS are seen by existing customers as providing more value at lower cost, then these legacy systems (and their vendors) face significant market share losses at best.

You can read the overview of the report here: “Great Expectations: SaaS Strategies in the Finance Organization”

IDC Says the Downturn is Good for SaaS

noreply@blogger.com (Daniel Druker) — Fri, 30 Jan 2009 19:20:00 +0000

And I agree with them - it sure matches what we are seeing here at Intacct.

IDC Says:

The harsh economic climate will actually accelerate the growth prospects for the software as a service (SaaS) model as vendors position offerings as right-sized, zero-CAPEX alternatives to on-premise applications. Buyers will opt for easy-to-use subscription services which meter current use, not future capacity, and vendors and partners will look for new products and recurring revenue streams.

One of the main value drives for SaaS has always been that you don't need to make a large up front investment in software, and you don't have to make any infrastructure capital investment at all. In the downturn we're seeing the need to preserve cash accelerate the adoption of Intacct by companies who need to move to new versions of products like the Sage and Microsoft Dynamics and Deltek lines - all of these moves require capital expenditures for new software, new servers, new databases, sharepoint, etc.

The same downturn-driven need for cost savings and cash preservation is also driving companies to switch over from Oracle Financials to Intacct - the entire subscription cost of Intacct is about 50% of just the software maintenance charges alone for Oracle Financials - not even counting the capital and operating costs that go along Oracle.

Additional findings from the IDC study include:

By the end of 2009, 76% of U.S. organizations will use at least one SaaS-delivered application for business use.

The percentage of U.S. firms which plan to spend at least 25% of their IT budgets on SaaS applications will increase from 23% in 2008 to nearly 45% in 2010.

This market's growth prospects will accelerate the shift to SaaS for the whole value chain as the promise of a recurring revenue stream, and the opportunity to tap OPEX and project-related dollars, will benefit the whole SaaS ecosystem.

At our user conference I polled our the audience and our average client is already closer to five SaaS applications - they are seeing extraordinary savings in their overall IT expenditures and great improvements in productivity as they shift more and more of their business to the cloud.

We similarly are seeing a major shift in the the channel - with the VAR community actively moving to embrace SaaS. Since the channel follows demand - it rarely creates it - the projection that demand for SaaS will continue to rise implies we will see great synergy, since SaaS is better for both the client and the channel.

Lots of the SaaS bloggers are covering the new IDC report - Vinnie, Phil and Dennis among them.

Intacct Winter 2009 - Convergence for QuickBooks Graduates

noreply@blogger.com (Daniel Druker) — Wed, 28 Jan 2009 17:18:00 +0000

As those of you who've been following this blog know, one of our key strategies here at Intacct is to make it a "no-brainer" for companies that have outgrown QuickBooks to graduate to Intacct.

We've been working hard with our Business Solution Providor Partners (aka our VARs) to take reduce the cost, time and risk of graduating from QuickBooks to Intacct - and to offer really compelling business value for making the move.

The first part of this project was to work with our VARS to develop migration tools, work out a rapid implementation methodology, and create best practices industry templates for QuickBooks graduates. It turns out that the methodology and industry templates are the most important part of the graduation process- the reason companies graduate from QuickBooks in the first place is to upgrade / professionalize their financial processes, introduce automation, streamline operations, go international, become auditable, etc.

So we've put a lot of focus with the partners on creating a process that makes it fast for QuickBooks graduates to upgrade their financial processes, and I'm even more excited about the growing library of micro-vertical versions of Intacct that our partners are creating. An really cool feature we have for VARs now is that they can package up their industry expertise to create custom vertical industry versions of Intacct that they can re-use over and over again for new clients.

We've also made some significant changes to Intacct Winter 2009 focused on user experience, user productivity and effectiveness. The goal was to make all of our users delighted and more productive with our user interface, but in particular to help QuickBooks graduates through the process of moving up to a system that inherently has much more depth and complexity.

We spent a lot of time on a new configurable menuing system that adapts to the users role and preferences. We added a really cool new favorites bar (written in Adobe Flex for you techies out there) that slides in and out and provides one-click access to a users favorite screens, business processes, customers, etc. We also added "Google-like" search - simple one click search to everything across the system. Another cool innovation are graphical process maps that show the user what their company's processes look like to help them navigate through the system. All in all it works together very well to make the system much faster to navigate around in, much easier to understand and much faster to find exactly what you need to get your job done.

So together there are four new things that have come together in Intacct Winter 2009 to make it much faster, less expensive, more productive and higher value to graduate from QuickBooks to Intacct. Faster migration via automated tools, a fast and value added implementation methodology, micro-vertical industry templates with built-in best practices and new features for higher user productivity and superior user experience.

The result of the convergence of our fast growing VAR community and these new product features is that we can offer an even better solution for QuickBooks graduates, and we can offer it faster cheaper than ever before. A year ago the cost of a basic Intacct implementation was around $10,000. Today our VARs are offering graduation from QuickBooks for less than $2,000 - an 80% improvement. Plus with all the new best practices industry content what you get for $2,000 today is increasingly higher value than what $10,000 would have brought you a year ago. So it's cheaper and better.

Where I see this going, and where I think the most value is, is in an ever increasing library of micro-vertical versions of Intacct from our partners. I'd like to see a marketplace of hundreds of certified industry versions of the product that are tailored across a wide array of micro-verticals and company sizes. For the partners, this provides a way to monetize their intellectual property by getting paid for their domain expertise. For customers, this means a very inexpensive way to get a massive head start of a best practices financial system implementation for their vertical.

I see this in a way as a convergence of SaaS and Web 2.0 community ideas. SaaS is mostly focused on industrial strength business applications and technologies delivered over the Web. But the community idea - in this case bringing together a community of VARs and other experts to develop a pool of intellectual property that can be deployed on top of the SaaS applications in the form of microvertical templates and best practices - well that's more of a Web 2.0 community or marketplace thought that I think has lots of possibilities.

Intacct Winter 2009 - The World is Getting Flatter

noreply@blogger.com (Daniel Druker) — Fri, 23 Jan 2009 22:23:00 +0000

It's been a whirlwind last few weeks here at Intacct as we've been heads down finishing up Intacct Winter 2009, a major new release that we are announcing this morning.

The highlights are big time improvements for global business management, a brand new financial consolidation, reporting and analysis application, new pre-packaged integration with QuickArrow, lots of improvements to our user interface designed to make Intacct even easier to use and more productive and new tools for ease of adoption that have let Intacct and our partners offer a 50% reduction in entry-level pricing and an 80% reduction in entry-level implementation costs.

Given my background coming from Hyperion and having worked on both Hyperion Enterprise and Hyperion Financial Management, which are both financial consolidation applications, I had a great time working on Intacct Global Consolidations over the last year - because the financial consolidation, reporting and analysis process is a one that nearly every company has to go through every month and is a natural to make better using the Internet and Software as a Service.

In my experience, most finance departments find the monthly close and financial consolidation and reporting process to be odious. It's manual, tedious, repetitive and off-line. And once you are done, you get to do it all over again the next month. Most companies handle it outside of the core financial system, because their old on-premises software financial systems were never designed to be connected together as part of a global network. This is the whole reason Hyperion (now part of Oracle), Cartesis (Now part of SAP) and Frango (Now part of IBM) came into existence - to bandaid over the disconnected financial systems in a typical enterprise.

The mid-market has it worse - most mid-sized companies use Excel or reporting tools like FRx and a huge amount of manual elbow grease for every consolidation. The result is that they go through this process as infrequently as they can get away with - it's not uncommon to see midsized companies consolidating quarterly or annually. That's an awful long time to go between being able to analyze how the business is doing, particularly in an economic climate like we are in today.

So last year we set out thinking about how can we make this process better using SaaS. And that's just what we did. Unlike in my days at Hyperion, at Intacct, 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. So we set out to build a system where everything is always live and instantly available - from consolidated corporate data through regional rollups to local transaction details.

We embedded real time processing and automation for multi-entity and multi-currency accounting into the core of the Intacct Suite. We put in place infrastructure so different entities across the business can act both independently and be coordinated. Then we added an enterprise class consolidation application with high-end consolidation, compliance and reporting features on top of our Internet-aware real-time multi-entity and multi-currency infrastructure.

All together, this changes the velocity at which you can manage the business, particular for small and mid-sized enterprises. In Intacct Winter 2009, you can run financial consolidations on either a formal periodic basis or ad-hoc on-demand. You can start out analyzing consolidated financials and can drill live into any level of detail in any business entity. The system will make the appropriate financial adjustments and convert currencies behind the scenes in real-time as you go. You can view reports and analyses in any currency and change between currencies and locations automatically and instantly. And you can even run reports that look at details across many different business units - such as consolidated customer and vendor aging reports - and the system will do all required adjustments and conversions behind the scenes to make sure you are comparing apples to apples. All of this works on both financial and non-financial data, so you can understand operational metrics like employee productivity and how they relate to financial results anywhere in the world.

Financial consolidation, reporting and analysis is a business problem that was just made for SaaS because it is inherently a data collection and analysis process- 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.

It's hard to even contemplate thinking this way in my old Hyperion days, because the old on-premises financial systems never understood they could be operating in a live, interconnected way. Everything was based on periodic offline extracts once a month or once a quarter. Don't get me wrong- Hyperion was a great product - it's just the model is so radically different when you compare the old way of summary level monthly extracts to SaaS-enabled real-time consolidations and instant insight across the entire enterprise.

There is lots of other good stuff in Intacct Winter 2009 - with more than 100 client and partner driven features and enhancements, our new Intacct MAX for QuickArrow and with our partners new abilities to make it easier, faster and cheaper than ever before to graduate from QuickBooks to Intacct. I'll post more on these later, but for now I want to congratulate the Intacct development team on really great work in showing on the on-demand world can transform the processes of enterprise class global business management and financial consolidation.

Intacct Makes the Top 100 Products of 2008

noreply@blogger.com (Daniel Druker) — Tue, 16 Dec 2008 01:22:00 +0000

I'm pleased to report that we will announce tomorrow that Intacct has been selected by Accounting Today as one of the Top 100 Products of 2008. Intacct was recognized in the “High-End and Mid-Market Accounting” category

The annual list, started 16 years ago, was created to recognize what Accounting Today considers to be the elite products available on the market.

Along with the perfect 5-Star Review that Intacct earned from CPA Technology Advisors in September this new recognition provides continued evidence that SaaS products like Intacct have matured to the point where they are functionally directly competitive with very mature software applications, even in most sophisticated application categories like financial applications and ERP.

It's so easy...

noreply@blogger.com (Daniel Druker) — Tue, 02 Dec 2008 04:26:00 +0000

As we prepare for the Intacct Winter 2009 launch, the major focus of which is making Intacct even easier and more fun and productive to use and making it even faster and more brain-dead simple to migrate from heritage financial applications, particularly Quickbooks, I thought it would be fun to share this video snippet from one of our clients.

So if even a caveman could enjoy Intacct before Winter 2009, I wonder what the new bar will be...

SIIA On-Demand - SaaS, Verticals and Channels

noreply@blogger.com (Daniel Druker) — Fri, 21 Nov 2008 01:45:00 +0000

The SIIA on-demand conference earlier this week was great fun - it's an insider's conference with several hundred very senior executives from the SaaS and cloud computing world all coming together to share best practices.

I moderated a panel on SaaS going mainstream. You can watch the video replay here. The premise was that as part of becoming mainstream, SaaS vendors are increasingly going to have to offer vertical and micro-vertical solutions and develop channel-friendly business models.

The session was standing room only - probably 300 people in the room - which tells me people are really interested in this topic. Remember the conventional wisdom is that SaaS is channel unfriendly - today's large SaaS vendors generally do not have channel partnerships, and that SaaS vendors need to be horizontal so they can cast the widest possible net for potential customers.

I was joined by Dan Fishback, the CEO of DemandTec, a large and public SaaS company focused exclusively on the retail and consumer goods industries, Adam Miller, the CEO of CornerStone on Demand, a SaaS Talent Management company now up to two million users, Jeff Shultz, the CMO at Bill.com, an early stage company focused on the accounting profession and going to market nearly entirely via the channel and Nik Puni, President of Sererra, a SaaS solution provider that customizes SaaS applications for vertical markets.

Each of these companies has seen rapid growth and success by focusing on solving the business problems of a particular set of vertical industries. All of these SaaS vendors see working with the channel as the key to making their business strategy work. We had a great discussion exploring the conventional wisdom that SaaS is by its nature horizontal and direct only.

The panelists felt that the opportunity for SaaS companies to become vertical industry focused and to work with channel partners is massive. They explained that in the early days of SaaS, the channel wasn't yet ready - so the early SaaS pioneers had to go direct to be able to sell anything. The feeling on the panel was that this would soon become a problem for today's large SaaS vendors, because their sales forces are now so large it will be hard for them to avoid channel conflict, which will make it harder for them to establish the channels they need to keep growing.

DemandTec is a SaaS firm like no other - talk about breaking the conventional wisdom. Their average sale is a multiple millions of dollars with the worlds largest retailers and manufacturers. Their channel is the traditional enterprise software integrator, like IBM Global Services, because, as their CEO says, their product is a true enterprise solution that just happens to be better since it is delivered via SaaS.

CornerStone has seen explosive growth, now up to more than two million users, that took off when they shifted from being entirely horizontal to working with partners to bring vertical versions of their applications to market. They have channel partners that add their own intellectual property and industry smarts into CornerStone's products, and then those same channel partners sell CornerStone into the industries that they are experts in.

Bill.com was an interesting case study - their business is almost exclusively through the channel and their channel is almost exclusively accounting firms. The value of their solution (automating a non-value added job that neither the accounting firm nor their clients want to do) is so compelling to the accounting profession that they are flocking in droves to become resellers.

I think the key insight from the panel was that verticals and channels go together. While there may be some horizontal markets that SaaS vendors can address through direct business models, as SaaS becomes mainstream many application categories will require vertical solutions, just as they have in the enterprise software world. The best people to bring lots of vertical and micro-vertical solutions to market are channel partners, since they are more likely to have deeper expertise in their particular industry than any vendor does. All of this is good for customers since highly tailored, highly valuable solutions become available to them via the SaaS model.

There was also good advice that a SaaS firm should probably service the first couple of verticals themselves, to ensure that the model works and the product can be properly customized for a vertical market. Other advice wasthat channels are not free - channel enablement takes real work and dedicated resources and is a lot harder than it may seem.

We ended the panel with advice to other SaaS firms from these executives. They all have seen that going vertical and adding channel partners helped focus their company on solving real business problems and adding real business value to their clients, while at the same time increasing their efficiency and improving their profitability. They all felt that SaaS companies have a better chance of succeeding in the downturn if they took a vertical and channel friendly aproach to their business. So much for the conventional wisdom...

See you at Dreamforce

noreply@blogger.com (Daniel Druker) — Fri, 31 Oct 2008 18:02:00 +0000

Next week a good portion of the Intacct team will be at Dreamforce, the annual Salesforce.com user and partner conference.

Roughly 60% of Intacct's clients are also using Salesforce, so this is a good event for us to catch up with the Salesforce community. We're also co-hosting a swanky party with Google, Salesforce and Appirio at Roe on election night - it should be a blast.

I'll be speaking in the executive track on Monday afternoon from 4:45 to 5:45 in room North 125 with Jim Tipton, the CFO from nGenera. nGenera is an amazing company - they've grown massively and have an explicit business strategy of running their business on 100% SaaS applications. It should be an insightful session - we're going to talk about what it is like to run your whole business in the cloud, which both of our companies are doing.

Dreamforce is always an exciting event - if you're coming, please visit us at booth 600 on the trade show floor, or stop by our presentation on Monday afternoon.

SaaS Service Level Agreement 2.0

noreply@blogger.com (Daniel Druker) — Fri, 17 Oct 2008 04:03:00 +0000

June 2009 update- You can find an updated version of this post here...

This week I attended IBM's "Accelerating Business Value" conference at their amazing Palisades conference center near Armonk NY. It was good to hear very senior IBM executives singing the praises of SaaS and talking about their plans for cloud computing. It was also a nice opportunity to catch up with SaaS pundits old and new like Bill McNee from Saugatuck, Amy Wohl, Judith Hurwitz, Frank Gens from IDC and Ken Boasso from Keychain Logic.

My favorite presentation was from Ken Harris, the CIO of Shaklee and former CIO from Gap, Nike, and Pepsi. The topic was "Creating Successful SaaS Relationships, Lessons from a CIO" but the session was really more about how to negotiate contracts and what to look for in Service Level Agreements with SaaS vendors, most of which I thought was good advice. Ken currently has ten SaaS applications deployed at Shaklee so he's got some good experience here.

Ken started out by talking about why all CIOs should love SaaS vs. on-premises software - lower cost to start, faster time to value, better initial and ongoing functionality, lower cost for maintenance and easy initial and ongoing integration. He's clearly a convert to SaaS and had great stories about the same project taking him 18 months and costing low seven figures in the old on-premises software days vs. 120 days and low six figures with SaaS today.

Ken also dove into what he sees are the CIO's concerns around SaaS, which unsurprisingly were almost all control related - Loss of control over operations, loss of control over security/privacy, and loss of control over the software if the vendor is acquired or goes out of business.

Ken said he believed that security and privacy was really a red herring - that SaaS applications are actually far better than almost any CIO can deliver, but no CIO would ever admit that to his CEO and it's an easy objection to raise if a CIO really doesn't want SaaS, which I thought was good and honest insight. In fact this was an undercurrent of much of Ken's presentation - that many CIO's know that SaaS vendors run their operations a lot better than nearly every in-house IT department but CIO's are loathe to admit this because it can reflect badly on them with their boss, the CEO.

The meat of the presentation was a framework Ken has developed for negotiating Service Level Agreements with his SaaS vendors. Most SaaS vendors either offer no SLAs, or only an SLA around system availability, and there isn't always a penalty if the availability goals are not met.

Ken's recommendations for SaaS SLAs were:

Establish a system availability SLA, based on average monthly availability, with bonuses for overachieving and increasingly steep penalties for downtime beyond the agreed level.
Establish a system response time SLA, based on average monthly response time, with penalties for slow system performance.
Establish an error resolution time SLA, with different windows for different severity levels (system down vs. workaround) and again with penalties for not being responsive.
Establish a fail over window for disaster recovery SLA in the case of a catastrophic failure of the vendor's infrastructure.
Ensure that you can get your data back if you ever decide to leave, and that the vendor will assist you in migrating away, for an appropriate professional services fee.

All of this seemed quite reasonable to me, and in fact Intacct already offers every one of these terms in our standard "Buy with Confidence" agreement except for an SLA around response time - and this just might be the catalyst to add it to our program since our operations team already measures and manages response time and it's pretty good.

In addition to all of these items, Intacct also guarantees a bit more with SLAs for:

The quality and timeliness of professional services engagements
Proactive notification of system availability and roadmap changes
Proactive communication with monthly product updates and quarterly roadmap updates

At Intacct we also measure our customer satisfaction - every quarter we survey our customers, and we base the compensation for every one of our employees based on how our customers answer the question "Would you recommend Intacct to your friends?"

So what didn't I agree with? Ken said he asks his SaaS vendors, for an extra fee, to offer a private, non-shared instance of the product just for Shaklee's use. It wasn't clear if he always asks for this, or always gets it, but he did spend quite a bit of time talking about it. To me this is a slippery slope away from multi-tenancy and all of the shared infrastructure and shared operating benefits that come along with it that make the SaaS model so efficient. It will be interesting to see if this model starts to become more common as SaaS scales up to the enterprise.

What I liked about Ken's presentation was seeing inside the CIO's thought process - since Ken knows he's giving up some control to the SaaS vendor, he expects that the SaaS vendor will make up for this by guaranteeing performance in those areas that he could have controlled if he had been running the same applications in house. He also recognizes that the SaaS vendors almost always do this better and more cost effectively than he could do it himself, so he uses this as a tool to reduce his risk and establish shared performance goals rather than as a club to beat the vendor up.

As I've said here many times before, the reason I think SaaS is going to win is because it forces both the client and the vendor to be goal aligned, and thinking about what should be in a SaaS SLA from the CIO's perspective is a great way to help achieve that alignment.

Cloud computing and beyond

noreply@blogger.com (Daniel Druker) — Wed, 08 Oct 2008 17:01:00 +0000

Last week I had the pleasure of speaking at the SDForum cloud computing and beyond summit. I joined Trae Chancellor from Force.com, Rajan Sheth from Google Apps, Sanjog Gad from SAP Labs and Praful Shah of RingCentral on a panel moderated by Chris Primesberger of eWeek, talking about the future of cloud computing.

We had a lively discussion, with the most drama coming when an audience member directed a very pointed question to Google and Salesforce about lock-in - the gist of the question was that the ideal behind cloud computing is interoperable standards-based resources available on the Internet, but the Google and Salesforce have come up with proprietary and incompatible development platforms, so if you are a software developer you have to choose one or the other and once you make this decision you are locked in.

My sense is that this is a "missing the forest for the trees" discussion. What Google and Force.com offer are basically highly productive development toolsets that are combined with an operating platform. Like every other development toolset that has ever been created, these have unique features and capabilities that once you use, you are wedded to. I don't see any way to get around this, although I understand what makes developers uncomfortable is that in the cloud world these development tools are also tightly coupled with an operating platform - so you can't yet run Force.com Apex applications on Amazon's cloud infrastructure.

My response to this at the forum was that as a cloud developer you simply have a business decision to make. When you look at the risk and return do you come out ahead by adopting these Platform as a Service offerings and building a relationship with these companies or not? I encouraged the audience to think not just about the technical platform as a service offering but also with the business relationships that come along with it.

At Intacct we have greatly benefited from our relationship with Salesforce and the work we have done on Force.com - but here is where stepping back to look at the whole forest comes in - from our customer's perspective Intacct and the Intacct ecosystem are running in the cloud - and we work very hard to make which underlying platform we are using transparent and irrelevant to our clients. We have worked very hard to combine Salesforce and Intacct so our customers can deploy seamless business processes that span CRM and Financials - regardless of the places in the cloud that our customers, Intacct and Salesforce live in.

This insight - that from the client's perspective the platform for cloud computing has to be the Internet, and not any single development or operating environment - is key. Already, many of our customers are using not just Intacct; they’re using it together with on average four other best-of-breed on-demand applications and cloud services – like Adaptive Planning, ADP, Avalara, Boomi, CompuPay, Google, IBM, LucidEra, Pervasive, QuickArrow, Salesforce and Zuora.

Making this even easier and more transparent is where the next innovations in the cloud have to happen. This idea of the Internet as the platform made up of many connected clouds offers a compelling vision for bringing together the benefits of the suite (vendor responsibility for integration, maintenance and support) and the benefits of best-of-breed (great applications that really work) without exposing customers to the risk, expense and lock-in of a single-vendor solution.

My predition as we ended the panel is that over the next five years we see a world where many companies are deploying 100 percent cloud -based applications to run their businesses.