IDC Says the Downturn is Good for SaaS

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

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

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.