The other week, I started compiling a spreadsheet that shows the relative pricing for SaaS accounting style applications. It's not meant to be sophisticated but provide an indication of the range of solutions and pricing models offered in this segment of the SaaS market. To my eternal shame, I omitted Intacct - a fact that Vinnie Mirchandani quite rightly picked up upon. In his post, Vinnie said:
I was surprised to see Finance/Accounting adoption lower than "specialized verticals". A few days ago, Dennis Howlett put together a quick pricing spreadsheet on some of the SaaS accounting packages and I remember thinking there were so many more including NetSuite, Intacct and others as Jeff Kaplan's Showplace lists. Without the benefit of the sample Bill and Co had access to, I would have argued it was the highest area of adoption (or tied with SFA in CRM) with 33% penetration...
In a moment of serendipity, Intacct today released its numbers. While I would hardly describe the overall numbers as sparkling, the rate of adoption is far more impressive. From the release:
"New business increased by 130 percent in fiscal 2008 versus the prior fiscal year, with Intacct's channel business growing by more than 160 percent over the same period...Intacct grew its subscriber base by more than 50 percent in the past year, and continues to see strong growth both from businesses graduating from QuickBooks and migrating from traditional on-premises mid-market financial applications to Intacct...As of the end of Intacct's 2008 fiscal year, the company's multi-subsidiary and multi-currency customer base had grown to include nearly 1,000 customers -- representing more than 10,000 total business entities managed"
Intacct claims a total of 2,000 customers.
Vinnie should not be surprised at the relatively small numbers. While CRM is a no brainer for sales people looking to adopt a solution they can easily expense, finance people are far more demanding. Security is often cited as a reason for avoiding SaaS solutions so Intacct's SAS 70 Type II certification is a BIG plus point. This certification provides assurance across a range of measures upon which picky auditors can rely.
Intacct has also taken other smart measures, especially in adopting a solid partner channel strategy. SMB customers rely more on channel expertise than their large enterprise brethern. That's because SMBs don't have the in-house skills with which to assess or implement solutions. Given the growth they're reporting, it seems clear Intacct offers VARs with a package that makes the solution a viable option. This is something I've encouraged others to think about. Just because a solution is an online offering doesn't mean that the essential consulting, implementation and data conversion work magically disappears. The advantage for VARs is that working online means they can be far more responsive to customer need. That should translate into lower TCO and better customer relationships. Why SAP doesn't seem to get this escapes me.
One area that causes me concern is the Intacct/Salesforce.com relationship. While Intacct claims integration, the SFdC channel hasn't exactly proved a happy hunting ground for add on vendors. There is a fundamental mindset difference between sales and finance people that is often played out in fights over expenses. Vendors like Intacct really need direct access to SFdC customers. It will be interesting to see how SFdC responds to this type of situation because in the longer term, services like Intacct could easily drive more mainstream adoption of the SFdC's core offerings. That's because of the power wielded by CFOs. This is something I believe CODA is in part relying upon to drive adoption of its CODA2Go solution.
Anyone considering SaaS accounting solutions should be taking a hard look at what companies like Intacct, NetSuite and others are achieving in the market place. It is still very early days but the signs are good. Right now the market looks somewhat chaotic with many different types and styles of offering. Selection remains something of a lottery as vendors shake out and flesh out functionality. Howeve, if the likes of Intacct are serving as a bell weather, then there is much to admire.