Reduce Effort and Boost Confidence: Infusionsoft’s Goals to Help Small Businesses Improve Sales and Marketing

This video interview was recorded on September 16, 2015, and originally posted on SMB Group Spotlight.

Laurie: Today I have the pleasure of talking to Terry Hicks. I’m used to talking to Terry when he was at Intuit, but today he’s here in his new role as Chief Product Officer at InfusionSoft, which provides cloud-based sales and marketing automation solution for true small businesses. I’m really happy to be talking to you today, Terry, and would like to hear what you’ll be doing in your new role. But before we get into this, you were at QuickBooks fifteen years or so. I’m really curious, you had a really successful role there, so what brought you to InfusionSoft? What inspired the change?

Terry: Well, I think one of the things that inspired me coming to InfusionSoft was really the passion for small businesses. Over my fifteen years at Intuit, I got a lot of personal energy, and felt like I was doing something good in the world, but I decided that it was time to take on a new challenge. Intuit’s a great company, I’ve learned a lot, but I just decided personally I wanted to take on a new challenge. I was very open-minded in what I was looking for, but the things that I wanted was a great group of people, who I really enjoy and trust and feel like I’d want to be in the trenches working with them every day. And an interesting problem to solve, where there is a big opportunity to make a difference. It could have been small business or some other space, but when I met the InfusionSoft team, I really connected deeply both with who they are, and the mission that they’re on. So once that happened, I just said, “Hey, this is the next right place for me.”

Laurie: That’s great. Tell us a bit about your role at InfusionSoft, and what you’ll be doing.

Terry:  InfusionSoft has an all-in-one sales and marketing software for small businesses and I’m the Chief Product Officer. What’s included in my role is the product management team and the design team, and also the payments business and the marketplace. So we’re looking at how we revolutionize all-in-one sales and marketing software for small businesses to make it much more appropriate from an experience standpoint, from a basic use standpoint, and solve these problems in a new and modern way.

Laurie: InfusionSoft, already has over 30,000 small business customers, there are millions of small businesses out there, so is the challenge how do we get to that next level of growth?

Terry:  Exactly. A lot of what we are solving for is multi-system chaos. A lot of small businesses start using many, many tools to try to solve a problem. The may say, let me try this tool or let me try that tool, before really slowing down and starting to think about, what am I trying to accomplish in my business? So a big opportunity for us is to translate the years and years of expertise that InfusionSoft has to what we call the small business success method or life cycle marketing. We can translate that into both the product experience as well translate that knowledge and grow that knowledge through our ecosystem of experts. These expert partners help small businesses get started, and guide them to success with different strategies. That, I think that’s the big opportunity. It’s move more to, what are you trying to accomplish into the process from the start. As we build that into the experience of the product, it means less work for small businesses to achieve success.

Laurie: So if there’s one message you’re really hearing over and over and over again from the customers you see, like to really do this for me, what would that be?

Terry: Customers really connect with the potential benefits of InfusionSoft–such as I’m trying to grow to sales, I’m trying to get organized.

Laurie: Number one in our studies: Grow my business.

Terry: That’s right. And also saving time because small businesses are time starved, they wear all of those hats. So the number one thing is, I love all of those benefits, help me achieve them with less effort, with more confidence. Help me connect to the actions that I should take in my business to achieve those outcomes. So that really what we’re trying to do.

Laurie:  Make that roadmap more straightforward Okay. So what are the biggest challenges to do this. As we all know, software, whether it’s in the cloud or on premise, it can automate things for you, it can take care of things for you, but you still have to spend time getting things set up and configured for your business. So how do you overcome those challenges of really making that more drop-dead easy to use.

Terry:  Well, the number one challenge is when you have an existing base of customers, they’re comfortable with the way things work. And so, as you start to change, even though the benefit is very attractive, it is still reflected as change.

Laurie:  You’re talking about your existing installed base customers?

Terry:  Yes, that’s something we’re going to be very mindful of. The other thing is how do you build confidence? When the experience changes from building something from scratch to selecting from recommendations that are either tailor-made to look like you with your words, or maybe changing the activity a little bit, how do you build confidence that that’s the right thing for your business?. So whether it’s bringing the expertise of other experts into the experience, whether it’s providing reviews and ratings and performance metrics around it, that will be a big challenge because small businesses are skeptical. They don’t want to waste time or money on solutions that don’t work and could actually hurt their business more than help. So building that confidence is a big challenge.

Laurie:  I think we’ve all been there, no matter what size business, of trying things and it ends up to be such a time-sink and then you’re like, “This thing doesn’t work for me anyway.” So what are some ways you might address that challenge? I think a lot of small business owners have been burned already. They spend a lot of time if not money as well, but time is so key and it was just like, “This was just a big waste of time.” How will you circumvent that?

Terry:  Well, fortunately there are many patterns that exist in design that are successful. So just like our customers, we don’t need to reinvent all of those wheels ourselves. We can adopt many of the best practices that are out there in terms of getting started. Another big advantage though, that’s unique to InfusionSoft, is we have a large network of experts who help small businesses every day. Some of those experts actually work at InfusionSoft. So it’s really bringing those people and those personalities into the experience so for the customers who are more self-directed and inclined to analyze the recommendations and adopt them–they’ll be fine. But for the many who have a question mark of “Is this right for my business?” they’ll have more access to experts from the ecosystem of folks who already support InfusionSoft customers, as well as some of the key members of the InfusionSoft team that can help them get over that problem.

Laurie: So you can personalize it to your style and your preferences.  That’s great.

Well Terry, it was so great to see you again and congratulations on your new role. I’ll be looking forward to InfusionCon next March to see how everything’s going and catch up with some of the new things that you’re doing then.

Terry:  I really look forward to catching up with you. I’m sure we’ll have made a lot of progress by then and I’d love to share it all.

Inbound for Everyone Everywhere: HubSpot’s Quest

hubspotUnder the rallying cry of “Inbound for Everyone Everywhere,” HubSpot hosted 14,000 customer, prospects, media and marketing mavens at its INBOUND 2015 customer and prospect event in Boston this week.

At the event, CEO Brian Halligan and CTO Dharmesh Shah had little to say about the recent scandal that involves a manuscript allegedly stolen from an ex-employee, and resulted in the departure of two top HubSpot executives. Instead, Halligan and Shah focused on a slew of new products, and preached the gospel of making sales and marketing more relevant for today’s highly informed, socially connected, always-on customers.

Mapping to the New Customer Journey

free social networkingBack in the day, brands held most of the power, vendors were the power brokers, and marketing was all about the four Ps–product, price, place and promotion. Today, the digital, social and mobile revolution has changed buyer expectations of how vendors should market, sell and service them–and shifted the power to the buyer. With a tap of a smart phone, buyers can get information, ratings and opinions about you and your competitors.

Marketers must evolve accordingly with valuable content, more effective engagements with prospects and customers and a customer-centric experience. Inbound marketing helps marketers realign by moving from a push approach to a content-driven, pull marketing one.

HubSpot’s mission is to accelerate this shift. According to CEO Halligan, human-friendly, empathetic marketing strategies that “create value before trying to extract it out of the system” are key to empowering this evolution. To that end, HubSpot is focused on providing its customers with a system to automate, track and personalize content and engagement.

Of course, HubSpot has plenty of company (practically every other marketing, CRM, sales automation and social vendor in the universe). But to its credit, HubSpot has distinguished itself as an early pioneer in providing inbound solutions for SMBs. In addition, HubSpot has offered many free services over the years to help educate the market, including Website Grader, Twitter Grader, Twitter Grader, Press Release Grader and Facebook Grader. More recently, the vendor has launched free versions of HubSpot CRM and Sidekick, which provides users with pop-up information, such as past contact history, social media content, mutual connections, about their email recipients.

New Solutions to Accelerate the Inbound Movement

HubSpot unveiled several new solutions both for existing HubSpot customers, and for SMBs that are new to inbound marketing. For instance:

  1. Secure Socket Layer (SSL) for HubSpot websites. The “s” in an “ https” URL means that a website uses SSL security to encrypt the link between the website and a browser. Google is advocating for “HTTPS everywhere,” and rewarding sites that support SSL with more favorable rankings. Customers using HubSpot’s website platform can implement SSL in two clicks, for free.
  1. HubSpot Reporting Add-On, to help marketers and sales people “spend more time making the numbers, not reporting them.” For $200 a month, HubSpot Basic, Pro and Enterprise customers get access to a library of more than 20 prebuilt reports, and the ability to build their own custom reports. HubSpot’s Shah stated that the base product delivers “good” reporting, but the add-on is more comprehensive and provides visualization.
  1. HubSpot Ads Add-On. According to HubSpot, 80% of B2B marketers use at least 1 paid channel. Ads Add-On is designed to help customers create ads, manage paid channels, figure out what works and what doesn’t, and calculate returns. The solution works with Google AdWords and LinkedIn Sponsored updates, and is priced at $100 per month.
  1. Predictive Lead Scoring, which is available at no additional charge to HubSpot Enterprise edition customers only, is designed to replace subjective, human lead scoring with algorithmic, data-driven lead scoring base on behavior, demographics, and social and email actions. HubSpot’s rationale for offering this to Enterprise accounts only is that it’s not really a fit for Basic and Pro customers because the solution needs at least 500 customer contacts and 1,000 non-customer contacts to operate reliably, and that it will appeal to more sophisticated customers.
  1. HubSpot Connect, which integrates customer data from different apps together into a centralized system. For instance, you could integrate billing and payments data from FreshBooks, or customer service records from ZenDesk into HubSpot Connect for a more complete and organized view of your customers. Each integration is individually priced. Some are completely free, some require certain tiers of HubSpot and/or the integrating product, and some have an additional fee for the integration.
  1. Leadin, a new freemium offering from HubSpot Labs, is aimed at companies that want to get started with inbound marketing, but don’t have the time or money invest in the entry-level $200 per month HubSpot platform. It provides users with a tool to create a quick pop-up form to collect email addresses from visitors to your website. When they sign up, you get some information to help identify them, such as whether they are a first time visitor. LeadIn then takes all the contacts you capture and puts them in a centralized database. You can use LeadIn on WordPress and other non-HubSpot content management systems. Note that LeadIn offers a simple plug-in for sites, but things are trickier if you have a or other type of site.
  1. New additions to Sidekick and HubSpot CRM, including:
    • Connections, which provides an email graph so sales people can more easily understand the connections they have in an account.
    • Prospects, which helps reps get more information about companies visiting your website.
    • Sequences, a process tool to help sales people follow-up with prospects with automated, personalized emails.
    • Meetings, which preps sales people with notes and timeline of interactions with the prospect before meetings.


If the breadth of new products is any indicator, the departure of two key execs hasn’t appeared to slow HubSpot down in the product development area.

However, the bountiful but somewhat dizzying array of new offerings raises some key marketing challenges for HubSpot. For instance, how will HubSpot:

  • Articulate, differentiate and segment its increasingly confusing solution portfolio for SMBs? SMB Group’s 2015 SMB Routes to Market Study reveals that “figuring out how different technology solutions can help my business” is the number one technology challenge for small businesses, and the number three challenge for medium businesses (Figure 1). But I noticed that while HubSpot execs talked a lot about serving SMBs, they didn’t talk much how they are segmenting the SMB market. This will be critical to successfully cut through the confusion with most relevant and tailored education, marketing, channels and solutions.


  • Rationalizing pricing and packaging for HubSpot’s paying customers. As I tweeted, it seemed a bit disconcerting that HubSpot users have to pay extra to get more comprehensive reporting capabilities. It will be interesting to see what percentage of the installed based ends up biting on the add-ons that come with a price tag, and if there will be push back here. Meanwhile, predictive lead scoring is only available to HubSpot Enterprise ($2,400 per month) customers. While the pricing rationale makes sense to HubSpot, I’m not sure that it will be that clear to customers and prospects.
  • Monetizing the freemiums. HubSpot has significantly expanded its freemium offerings in a push to create viral entry points that hypothetically will enable it to engage with a broader cross-section of the potential market. However, we didn’t hear much about HubSpot’s strategy and success metrics for attaining and converting freemium customers.

HubSpot continues to do a stellar job in leading the inbound movement, and developing some of the most innovative solutions in this area. Ironically, however, as it grows its portfolio, HubSpot itself now faces some new inbound marketing challenges of its own.

How Well Do You Know The Very Small Businesses That You Want to Sell To?

Technology vendors are increasingly targeting very small businesses (VSBs, with 1 to 19 employees) with their solutions, lured by the sheer size of the market and the relatively low penetration of many technology solutions in this sector.

However, the very diverse, fragmented and volatile VSB market is not for the faint of heart. And all too often, technology vendors operate on assumptions that are truer of the 1% of venture-backed startups than the average VSB. While all sorts of nuances must be considered, understanding the fundamentals is a must to have a good shot of being successful in the VSB market. Take the quiz and find out if you know the basics about what makes the 99% tick!

  1. What do VSBs rate as their top business challenge? (Check one)
    1. Obtaining financing
    2. Attracting new customers
    3. Growing revenue
    4. Improving employee productivity

Slide1VSBs are consumed with growing their businesses and staying afloat. Their challenges center on attracting new customers, growing revenues, improving cash flow and maintaining profitability. Other challenges, such as improving customer retention and satisfaction, and attracting and retaining quality employees are important but pale in comparison to money in, money out issues. If you don’t speak directly to how your solutions can help solve these key challenges, it will be very difficult to get on VSB radar. Score 1 point if you checked b or c; zero for a or d.

  1. What do VSBs rate as their top technology challenge? (Check one)
    1. Transitioning from on-premise to cloud/SaaS solutions
    2. Containing technology costs
    3. Figuring out which solutions can best help my business
    4. Securing company information

Slide2VSBs are confused by all of the technology options out there! They often find it tough to figure out which technology solutions can really help their businesses. Other key tech challenges include: securing company information, containing technology costs and keeping systems up and running. Help VSBs cut through this confusion with clear information about how your solution can help them improve business outcomes–securely, affordably and reliably. Give yourself 2 points if you chose c; 1 point for b or d; and zero for a.

  1. What is the median for VSB annual spending on technology products and services? (Check one)
    1. Between $1,000 and $9,999
    2. Between $10,000 and $24,999
    3. Between $25,000 and $49,999
    4. Between $50,000 and $99,999

Slide3VSB budgets are very tight. Median technology spending for businesses with 1-19 employees is between $1,000 and $9,999 annually. Be realistic about pricing for this market: remember that after paying for essentials (devices, connectivity, etc.) there’s not a lot left over. Score 2 points if you selected a; 1 for b and 0 for c or d.

  1. Who is primarily responsible for IT support in VSBs? (Check one)
    1. No one
    2. Part-time employee(s)
    3. Full-time employee(s)
    4. External/third party contractors

Slide4In 41% of VSBs, no one is tasked with looking after IT! 34% are lucky enough to have an external contractor filling this role, with just 25% having someone on staff to do the job. Solutions must be easy to deploy and very intuitive to use to gain traction in the VSB market. Add 2 points for a; 1 for d, and 0 for b or c.

  1. What do VSBs rate as the most important information source to learn about technology solutions? (Check one)
    1. Social media sites (Facebook, LinkedIn, Twitter, etc.)
    2. Webinars/podcasts
    3. Professional advisors/consultants
    4. Web search (via search engines)

Slide5Time to tune up your search engine optimization engine! 49% of VSBs put web search as one of their top 3 information sources. 40% say professional advisors/consultants are one of their top 3 sources. After that, VSB indicate their preferences for technology information varies greatly. Creating a strong presence with the top two information sources is critical, but broad coverage in the others is also key to reach this diverse audience. Give yourself 2 points if you chose d; 1 point for c; and zero for a or b.

  1. What is the top reason a solution gets on a VSB’s short list? (Check one)
    1. Easier to use
    2. Local service and support
    3. Better pricing
    4. Free trial

Slide6Better pricing trumps all, but ease of use is almost as important. 41% of VSBs rate better pricing as one of the top three reasons they put a solution on their short list. If a VSB decision-maker gets even a whiff of sticker shock, they’re likely to eliminate a solution from consideration.

Ease of use comes in at number 2, with 36% of VSBs rating this as one of their top three considerations. From there, other criteria ranking drop into the 20% or below range. Score 2 for c; 1 for a; 0 for b or d.

How Did You Score?

9-11 points: VSB Expert. Congratulations, you are part of the elite group of technology vendors that truly understand VSB realties. You know how to engage VSBs on their terms, and your pricing isn’t likely to give them sticker shock. If we Google “small business” and your solution area, your company probably comes up in the top 3. With continued research, social media engagement, great content to educate customers, a strong stable of partners and influencers, and constant striving to make your solution easy to use, you have the right stuff to compete successfully in this very tough market.

5-8 points: VSB Intermediate: Your knowledge of and comfort level with VSBs is growing. You’re likely to already have a plan, but you need to up your game to rise above the noise and carve out a sustainable, scalable volume play in the VSB market. Team up with influencers and partners who are already strong in the space; join relevant groups on social media; tune your understanding of VSBs with research and 1-1 time onsite with VSBs; sharpen content so that it really resonates with VSBs.

4 points or less: VSB Novice: Congratulations for having the courage to start thinking about whether or not the tricky VSB market is a good fit for your product and/or service. Build your understanding of VSB customers with research, 1-1 conversations at events, joining relevant social media conversations, groups and to get a better feel for VSB behavior, concerns and goals. Study best practices of companies that have been successful in this market, as well as those who have failed. By listening and learning before you launch into the VSB market, you can avoid many of the traps that a novice might ordinarily fall into.

SAP’s 5 + 1 Strategy to Build SMB Consideration and Adoption of Business One

SAP logoWhen it comes to business management and  enterprise resource planning (ERP) solutions, SAP often isn’t on the radar for small and medium businesses (SMBs). But, while the ERP giant is best known for its large enterprise solutions, SAP Business One is aimed squarely at providing small businesses with a unified business management solution.

In this three-part series, I interview Luis Murguia, who was recently appointed Senior VP and general manager for SAP Business One to discuss how the solution fits into SAP’s strategy, and what makes it a good fit for SMBs.

In this third and final post, Luis talks about SAP’s plans to accelerate consideration and adoption of Business One.

Laurie: Luis, you’re still relatively new to your Business One role. But looking out over the next year or so, what are your goals, and how will you measure success?

pillarsLuis: When I joined the team, we put a plan in place called five-plus-one priorities. Why five-plus-one, why not six? Because this one is very special, so we have five pillars, and one overall priority that is common across all five pillars. The five pillars include:

  1. Continuing to optimize Business One for the cloud is number one. Right now we offer a multi-tenant environment, we want to be able to scale that to serve tens if not hundreds of thousands of customers.
  2. Number two is speeding adoption of the HANA database among Business One customers. HANA provides an incredible source of innovation, helping customers to run much faster in real time.
  3. The third pillar is to accelerate two-tier ERP adoption. Business One is used not only by small businesses, but also in larger companies who use SAP Business Suite at corporate, and use Business One for operations in divisions and subsidiaries.
  4. Fourth is simplification. We are aggressively pursuing simplification if all of our processes. In July we are on target to reduce the number of products on our price list by 70%, to make it easier for our partners and customers to select and configure Business One
  5. The fifth pillar is to raise the dial in terms of volume and building mindshare among small businesses. Our Business One customers are small and maybe not well known, but they are on social media promoting their success so other small businesses can see the value of it.

So those are the five pillars. The plus one is very dear to my heart; I call it people, talent and diversity. Business One will be as good as the people we have working on it. We’re investing a lot of effort in terms of training, developing career paths, and helping employees continually find more challenging more interesting areas to work in to help them grow as individuals and as professionals. So that’s the core pillar that will make Business One stronger. As I said, Business One will be as strong as the people that are a part of the business.

Laurie: That’s very key, but is often not given enough airtime. If your employees are engaged and motivated and able to keep up with new skills, you’re much more likely to get good results! I think you’re right that it’s the glue.

Luis thank you so much, for painting a picture of Business One for us, where it is today, and where you want to take it.

This is the final post in a three-part series examining SAP’s Business One strategy and directions.

Are You Keeping Pace With Your SMB Customers?

The good news for tech vendors: SMBs are bullish on their own growth, and on using technology to help achieve that growth. The bad news: tech vendors may not be doing a good enough job helping SMBs understand, evaluate and buy the tech solutions that will best help their businesses.

SMB Group recently completed our 2015 SMB Routes to Market Study, which provides an in-depth look at U.S. SMB (small businesses: 1-99 employees, medium business: 100-999 employees) technology adoption, the decision-making process, and the buying cycle. Among the findings, we learned that “figuring out how different technology solutions can help my business” is the number one technology challenge for small businesses, and the number three challenge for medium businesses.

Figure 1: Top Three Technology Challenges for SMBs


SMBs need tech vendors to provide them with a more informative, consistent purchasing experience to help them punch through the confusions knothole. Though the priority rankings differ a bit between small and medium businesses, the top two asks for both small and medium businesses are for vendors to provide a consistent experience across online, mobile, offline and other channels and to more clearly articulate how the solution helps improve specific business goals. Number three for small businesses is the desire fro better real-time online chat/phone support to answer questions, while for medium businesses, its help in connecting with reference customers with similar needs.

Figure 2: Top Ways Tech Vendors Can Improve the SMB Purchasing Experience


The “SMB market” has always been a tough nut to crack as it actually comprises many different diverse markets. In addition to standard employee size and industry segmentation, SMBs vary widely in terms of business maturity, attitudes about technology, and a host of other variables. Furthermore, it’s a very volatile market: about 50% of new businesses fail within the first five years.

Today, these age-old challenges are compounded by the fact that the digital, social and mobile revolution raising SMB buyers’ expectations of tech vendors’ across solutions, marketing, sales add service.

As competition for SMB mindshare and market share continues to rise, tech vendors will need to work smarter to earn SMB dollars. Vendors need to do a better job of understanding the intricacies of the SMB market so that they can personalize content to nurture buyers along the their journey, providing them with an informative, helpful and consistent purchasing and service experience across channels.

Please contact Lisa Lincoln at (508) 734-5658 or for more information about the 2015 SMB Routes to Market Study (including a Table of Contents), or to order.


Taking the Plunge: Triggers for Small Businesses to Move to SAP Business One

SAP logoWhen it comes to business management and  enterprise resource planning (ERP) solutions, SAP often isn’t on the radar for small and medium businesses (SMBs). But, while the ERP giant is best known for its large enterprise solutions, SAP Business One is aimed squarely at providing small businesses with a unified business management solution.

In this three-part series, I interview Luis Murguia, who was recently appointed Senior VP and general manager for SAP Business One to discuss how the solution fits into SAP’s strategy, what makes it a good fit for SMBs, and how the vendor plans to move Business One from being one of SAP’s best kept secret onto SMB short lists for ERP solutions.

In this second post, we talk about the triggers that motivate small businesses to move from entry-level accounting to SAP Business One, and how SAP and its partners help them take the leap.

Laurie: So, SAP Business One provides small businesses with more of their industry-specific needs already configured right out of the gate, and getting it in a cloud model means they don’t have to worry about installing hardware and software. But just the thought of moving from an entry-level or lower end accounting to a more robust ERP system can be very intimidating for smaller companies. So what triggers do you see motivating them to finally take the plunge and move up?

I think a lot of us in most aspects of life; we tend to keep putting Band-Aids on pain. But finally someone says I can’t keep putting on the Band-Aids on this, I need something more comprehensive to manage my business with? I remember the story of the largest manufacturer of white boxes, white label PCs in Brazil. They were very successful in selling to schools, and any place that needed a large number of PCs because they were very price competitive. What triggered ERP adoption for them was the day they delivered the wrong PC configuration to a big customer. They lost a fortune scrambling to produce another batch, and they also realized that they almost lost one of their most important customers because of contractual requirements and remedial penalties.

Laurie: Ouch.

Luis: They were trying to do all this with manual processes and Excel files. But when you are using a lot of Excel files that need to be aligned and synchronized. In this case, they only needed one disconnect to get massive mistakes with the customer’s configuration. So they realized they had to bite the bullet and get their house in order to be much more operationally efficient.

Laurie: Okay, so how do SAP and its partners help small businesses avoid pitfalls when they’re ready to take this leap and implement Business One?

Luis: Well, some of our most successful US partners insist new customers pass a week of product training before they implement Business Because when end-users feel comfortable with the application, this helps guide the implementation and ensures users get value from it right away. So attention to end-user training is really making the difference when it comes to successful implementation.

This post is the second of a three-part series. In the third, we’ll explore SAP’s Business One strategy and goals for the future. 

Yes, Virginia, SAP Does Have a Real Small Business ERP Solution

SAP logoWhen it comes to business management and  enterprise resource planning (ERP) solutions, SAP often isn’t on the radar for small and medium businesses (SMBs). But, while the ERP giant is best known for its large enterprise solutions, SAP Business One is aimed squarely at providing small businesses with a unified business management solution.

In this three-part series, I interview Luis Murguia, who was recently appointed Senior VP and general manager for SAP Business One to discuss how the solution fits into SAP’s strategy, what makes it a good fit for SMBs, and how the vendor plans to move Business One from being one of SAP’s best kept secret onto SMB short lists for ERP solutions.

In this first post, we discuss Luis’ background, Business One history, and some of the key differentiators it has in the SMB ERP market.

Laurie:  Hi this is Laurie McCabe from SMB Group and today I’m talking to Luis Murguia, Senior VP and general manager for SAP Business One. Business One is SAP’s flagship ERP solution for small and medium businesses. So Luis you’re relatively new in this role, can you tell us a little bit about where you come from, and why you decided to become part of the Business One team at SAP.

luisLuis: Thank you Laurie, and great to catch up. I’ve been with SAP for 9 years, in the enterprise division as well as the partner organization. For the past 6 years, I ran SAP’s European partner organization. Throughout my career I have been involved with the ERP market. I started my career in providing ERP solutions for small wholesale food distributors, working with solutions like Peachtree, QuickBooks. Then I moved into selling HP3000 servers pre-loaded with business management software. So I’ve been involved in helping small business find new ways better ways to run the business and be more successful throughout my career.

Laurie: It sounds like you have a well-rounded history and in terms of small business solutions, which brings me to my next question. Many people think of SAP primarily as a big company a big company that sells sophisticated, high-end business solutions to other big companies. So what’s SAP’s role in small business?

Luis: Great question. Ben Horowitz, a venture capitalist that I admire a lot, was also a CEO of a start-up that became very successful in the dot-com crisis. He describes innovation as a really good idea that initially looks like a bad idea. This because any good idea that looks good off the bat is probably not innovative, as it s likely that many people are already doing it. For example manufacturing a car is a good idea because people need cars, but everybody knows it.

Laurie: So unless you’re like Tesla it’s not necessarily a new idea.

Luis:  Exactly. 10 years ago people thought the idea of making a high performance car that runs 100% on electricity was such bad idea was no one was doing it. But then Tesla did it. Likewise, Business One, which is designed for small businesses, doesn’t appear to be a fit for SAP. But actually, we can leverage many SAP strengths, including industry knowledge and best practices, such as order to cash, and package it for small business. That’s what makes Business One such a novel and successful product. We instill and capture expertise from SAP’s big business ERP to help our smaller business customers be more competitive.

Laurie: Ok, explain a bit of the Business One history for us.

Luis: Business One has about 50,000 customers. The solution has been available for the last 15 years, and we are accelerating growth, adding close to 1500 new customers every quarter. Every day, about 15 new companies in the world choose Business One to manage the business.

Laurie: Why do you think growth is accelerating now?

diversityLuis: I’ve been with Business One for just about four months, and I see two great takeaways to date. Number one is that Business One can be run in the customer’s own facilities, as well as in the cloud. Businesses like having this choice. The second reason, and perhaps more important, it is that more customers are choosing Business One because of the in-depth industry functionality that has been developed by our partner ecosystem.

Laurie: So is the focus for Business One to differentiate with industry specific versions or customizations?

Luis: That is 100% correct. And let’s talk a little bit about customer size segmentation too. We divide the Business One market into three distinct segments: companies with less than 50 employees, those with between 50-200 employees, and ones with 200 to 1,000 employees. The first, businesses with less than 50 employees will usually be running QuickBooks, as a standard off the shelf solution. In the 50 to 200 employee category, companies are probably using Microsoft Dynamics, Sage or another solution that they’ve customized to some extent, but they don’t have the critical mass to afford systems integrators to meet all of their requirements. Business One really fits the bill here, because we have over 600 micro-vertical customizations.

Laurie: So Business One has become a software development platform?

Luis: Yes, standard accounting, standard invoicing, management, sales, taxes, and other functionality is in there, and the ISV can build specific micro-vertical functionality on top of it–say for photo copier dealers or microbreweries, which have very different requirements. And in that 50-200 employee segment, that’s exactly what they need, a full solution to manage unique requirements, off the shelf. They can derive more value from a complete micro-vertical solution with Business One as the foundation.

Laurie: And having it available in the cloud probably helps a lot too.

Luis: Yes, in the US, over 85% of all new Business One customers are choosing cloud deployments. Many sign a contract a perpetual license from SAP for financial reasons, because most will stick with an ERP solution for a long time. It is much better, just like its better to own the house than renting the house–the math says you should buy not rent. But they are having partners run and manage Business One for them in the cloud. Say you are a microbrewery in Chicago. You don’t worry about servers, disasters or backups; you eliminate the traditional headaches associated with IT infrastructure. So even though many buy a perpetual license, all the infrastructure and management is in the cloud.

This post is the first of a three-part series. In the second, we’ll examine key triggers and requirements that drive small businesses to move from entry-level accounting solutions to SAP Business One. In the third, we’ll explore SAP’s Business One strategy and goals for the future. 


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