FinancialForce: A New Force in Cloud-based Accounting

Last week, Unit 4 Aggresso, parent company of CODA, announced that it has teamed up with Salesforce.com to launch FinancialForce.com. FinancialForce.com is actually Coda2Go, the cloud based accounting application that CODA built from the ground up on the Force.com platform, and sold through AppExchange. The deal pushes FinancialForce into the spotlight as a poster child for Force.com, and underscores Salesforce’s determination to break down the barriers that have kept companies from running their accounting and financial applications in the cloud.

But how much will this move the needle for cloud-based accounting–which has never been able to gain the kind of market momentum that cloud CRM has enjoyed? There are many reasons for the gap, but mostly because the financials/accounting function is a very different than CRM. In comparison to CRM, accounting solutions usually serve a much smaller, more bounded set of users. CRM users typically span several line of business areas, from sales to marketing to customer service, while accounting users reside primarily in the financials area. CRM users are more likely to be geographically dispersed and mobile, whereas accounting users are usually located in headquarters or major branch or divisional locations. In addition, those financial types have a reputation for being pretty set in their ways.

And, let’s face it, it’s not like cloud-based financial solutions are anything new. NetSuite (which launched as NetLedger in 1998) has actually been around a year or so longer than Salesforce. Intacct, Intuit QuickBooks Online, and several lesser-known companies including Workingpoint, Clarity, Less Accounting, Freshbooks and others offer cloud-based financials aimed at small and midsized businesses.  These players have made some headway—especially in the SOHO space—but the vast majority of companies still choose to deploy traditional, on premise accounting solutions. In comparison, close to half of all new CRM deployments are cloud-based.

However, with the formation of FinancialForce, Salesforce is now bringing its considerable marketing clout and savvy into the ring. While Salesforce.com’s stake in FinancialForce is undisclosed, my call with Jeremy Roche, Coda2Go CEO, who will continue in the helm at Financial Force, leads me to conclude that the investment and alliance is considerable:

  • FinancialForce has opened a new headquarters location in Salesforce.com’s incubator building, supplementing existing offices in Manchester New Hampshire and Harrogate, England.
  • FinancialForce is earmarking a good chunk of the Salesforce investment to aggressively ramp up its sales personnel and initiatives.
  • The two companies are using Salesforce.com’s service cloud to link their support systems, and Salesforce will provide front line support for FinancialForce.com customers. This will enable  FinancialForce to scale quickly to support all the new customers that they expect to gain from the expanded sales team and the fresh cache of the Salesforce association.

I believe that financials and accounting will never be as obvious a choice for cloud computing as CRM, collaboration and other applications that need to serve a bigger, more diverse and more mobile set of users. However, this new venture will bring cloud-based financials into more frequent and serious consideration for more customers—especially as Gen Y/Millenial workers replace retiring baby boomers and Gen-Xers. Salesforce has more marketing DNA than any other B2B company that I can think of, and a large, growing user base that it can prime for FinancialForce. It can appeal to CEOs with a message of tight integration between the two solutions on Force.com and in the Service Cloud, and reassure CFOs with CODA’s 30 year of financials experience.

In fact, as it’s done in the CRM arena, Salesforce will create a rising tide that will lift the boats of other cloud-based financials vendors as well.  After all, FinancialForce won’t be the best fit for every company, but Salesforce will do what it does best—and get more people interested in considering the cloud-based option. As the tide rises, vendors of traditional, customer premise financial software—particularly in the small and medium business markets—will face more pressure to rethink re-think their cloud strategies—or lack of them.

One Response

  1. [...] a sampler: Xactly launched a new sales performance solution for small and medium businesses (SMBs); FinancialForce, which Salesforce invested in with Coda to to deliver business critical financials solutions on the [...]

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