Big but Underreported Stories of Importance in 2013
In my youth, I used to track all manner of critters on the family ranch. Later on, I tracked poachers. I’m pretty good at it as I make it a point to spot the odd clue, the worn surfaces, the out of place silhouette, etc. Tracking things is something I still do although nowadays I’m more likely follow software vendors and consultancies from the comfort of my desk or a conference seat. The good news with tracking most of these elephants is that they leave wide trails.
But any reporter or analyst can follow a trail – especially one that’s a mile wide. What’s tougher is to spot that lesser traveled trail – the trail that leads to interesting, often overlooked, stories and market angles. So, with that, let’s look at the most underreported stories of importance for 2013 that too few people noticed.
ERP is going to the cloud and in more forceful ways than ever.
There were some amazing proof points out there that I spotted this year. Rootstock, the Force.com based manufacturing ERP solution, has been on a tear lately adding new ERP customers at an enviable pace. Just this week, they issued another press release detailing even more wins (and the traditional year-end ERP deal closing cycle is still yet to come!).
Workday is blowing it out, too. Their most recent earnings release included this:
Even Motley Fool’s Brian Nichols was impressed: “The company's shares soared 13 percent on Tuesday after it reported earnings, as Workday blew away analyst expectations with accelerated growth.”
Lots of Money Going into Cloud Solutions!
Raising capital to fuel SaaS market share gains occurred all year long. Like other vendors, Adaptive Planning has raised some sizable capital this year except they did two different fundings in one year!
Did any of you see that little ol’ Xero, a white hot New Zealand cloud accounting software raised $150 million (USD) this year to fuel additional North American growth? According to their website, Xero’s money is coming from Peter Thiel (co-founder of PayPal and the first outside investor in Facebook) and Matrix Capital. That money, plus their channel strength with accounting firms, should power growth in revenues for some time. Click here to read more about this new capital.
But, if you click on anything in this feature, read this pdf file that Xero used in its latest round of investor presentations. It’s a quick, powerful piece that paints a strong story of growth. Every tech vendor should dream of telling this kind of story.
But Xero is only one more (of many) proof points of cloud ERP’s expanding market presence.
The Cloud ERP Suite is Getting BIG!
NetSuite is acquiring TribeHR. This acquisition adds to NetSuite’s financial accounting, e-commerce, distribution and other products. It should round out their ERP footprint once fully integrated into the suite. A larger product footprint does several things. For one, it removes sales objections from prospects who won’t buy a more limited product suite. Larger suites can also offer a better integrated product line that is less trouble to maintain than one made up of a lot of best of breed products. NetSuite’s product line is now one of the largest in the cloud ERP space. Plex and Rootstock may have more functional modules due to the manufacturing basis of their solutions space. No matter who has the most modules, the key point is that cloud ERP has been growing up and on-premises vendors should be concerned.
FinancialForce has also made a couple of recent acquisitions. Vana Workforce will now provide critical HR functionality to their suite. Vana’s products, like FinancialForce itself, are all built on Saleforce's Force.com platform. I quizzed their CEO pretty good at the recent DreamForce event and he really understood the additional functionality they’ll be adding to FinancialForce’s accounting and professional services automation products to complete the integration.
FinancialForce also acquired the supply chain assets of Less Software. Adding this software to its PSA functionality, Vana HR, and, pre-existing financial applications means that the footprint of FinancialForce has grown substantially and, like NetSuite, makes it harder for on-premises vendors to attack them.
Coolness in the HR Space, Too!
In the HR space, I was pleasantly surprised at the number of new innovative firms at the recent HR Technology Conference in Las Vegas. We all know the major players in this space but some of the coolest innovation is in the least well-known and smaller firms. For example:
- PayScale – After years of offering workers free, real-time salary comparisons, the company now has achieved critical mass via network effect. It’s been quite successful lately monetizing its network and salary data to employers. This service should really take for mid-market firms who desperately need competitive salary information but can’t afford to pay a salary consultancy to do a specialized study for them.
- Entelo – Entelo is a firm to watch. They help firms/recruiters find great talent and can identify potential candidates that are likely to respond to a new employment opportunity. If you still think in terms of old-school recruiting (i.e., want-ads, headhunters, etc.), you need to see Entelo. (Also, check out their new Search capability.)
- InterviewStream – I’ve been impressed with video interviewing technologies the last few years and have written about HireVue, Montage and others. InterviewStream is pushing this capability out beyond campuses and into RPO (recruiting process outsourcing) and other dimensions. Video is still coming of age in HR (and in its infancy in other business processes). Learn about it now as video can dramatically improve your speed to hire, reduce recruiting costs and accelerate time to value. Can your firm, in the words of InterviewStream, make video a platform technology and not just a plug-in/bolt-on to existing applications or business processes?
- SyndioSocial – Possibly one of the coolest social/change management/analytic/big data/project technologies I’ve seen in a while. This solution helps you identify progress in implementing any big initiative (not just IT projects). It can create influence maps using email, social and other data types to help project leaders identify the people who can help drive an initiative across the finish line.
Saving Money with ERP Should Be a Big Story!
I also think too little has been written about Panaya and OneSource Virtual this year. Both firms understand (better than some integrators I meet with) how important it is to deliver ever greater value even when working with boring ERP products. I’m preparing a piece on OneSource and it should run shortly. Panaya has been focused on helping CIOs cut out application software maintenance costs since their inception. Their latest efforts are now focused on the Oracle EBS product line. They have approximately 500,000 test scripts for SAP products alone. If you’re a CIO with any of the Big 2 products and a tight IT budget, call Panaya. If you’re thinking of implementing Workday HR, call OneSource.
The Battle of Little Big Data
I’d also have to single out Workday one more time this year as the wisdom of their native in-memory database processing (part of their original 2005 design) was prescient. Competitors have been trying for years to bolt on in-memory technology to older generation products and the results are not very pretty. There can be latency issues with these solutions. Moreover, when Workday showcased its big data analytics this year, I don’t think enough people really got the power of this. Again, their approach is not just elegant (compared to the bolted-on solutions of competitors), it works for more than basic ERP data.
With all of the “big data” or faux-analytics (I call these banal-ytics) announced in the last year or so, most can’t handle datasets bigger than the original ERP databases. Those aren’t really big data applications – they’re just prettier or faster inquiries. Hopefully, more buyers (and analysts) will draw a sharper, more discerning eye around these offerings.
Mo' Money, Mo' Money, Mo' Money
Money was flying around the cloud space this year and no one seemed to notice or care. In June, I did a piece on all of the convertible debt financing going on within the software space. When these payments come due, investors could see some equity dilution or a hit to free cash flow to meet the debt obligations.
Financial Accounting Solutions are in Ascendancy!
While Adaptive Planning has been pretty hot this year, so have other planning, consolidation, treasury and related Finance solutions. Whether a vendor targets the SMB or large enterprise space, these solutions are kicking out on-premises solutions and die-hard spreadsheets everywhere. We should read about more successes here next year. I also expect to hear a lot more from Adaptive, Anaplan, ReVal and Tidemark soon.
The Big Social Story is Only Now Emerging
Predictions for 2014
Well, now that I’m in a contemplative, retrospective mood, I think I’ll focus on predictions for next year. Oh, wait, I’m giving my predictions next week at the Workday Predict & Prepare webcast. Bill Kutik of HR Technology Conference fame is moderating Naomi Bloom, Vinnie Mirchandani and me. Should be fun as I’m already anticipating that Vinnie will predict we need to run out and buy new HR software to better manage robots (or some such thing). Click here to watch the fur fly December 10.
Disclosure: I still own a few shares of Workday stock.