Just want to let you know that we are publishing highlights from recent vendor briefings on the SMB Group web site. As time permits, we discuss our takeaways from the more interesting briefings. I’ll try to remember to post them here as well. There are several up there already, here is the most recent one.
Acumatica is a relatively new player on the SMB ERP scene. It delivers its web-based ERP solution both on premise, and via a software-as-a-service (SaaS) model. Targeting companies with 5–1,000 employees (or roughly $5M – $500M in annual revenues), Acumatica provides accounting, CRM and distribution capabilities, and worldwide currency and language customization.
Acumatica offers customers a choice to run its solutions on-premise or via the SaaS model, providing the benefits of cloud technology and social media capabilities in both delivery models. Subscription pricing for the SaaS version of the accounting module starts at $12,000 annually, while on-premise licenses start at $15,000. On-premise pricing is CPU-based, not per-user based, enabling customers to maximize the ERP user base without incurring added costs. The company has more than 50 customers using its solutions to-date. About 30% use Acumatica via the SaaS modes, and the other 70% have deployed it on-premise.
Acumatica has a 100% indirect sales model, which provides an attractive and neutral compensation model to motivate value-added resellers (VARs) to sell the solution that will work best for the end-user customer. The vendor has signed up more than 40 VARs to date—mostly from the ranks of Microsoft Dynamics and Sage.
Acumatica intends to capitalize on key trends and requirements in the traditional VAR community and it the SMB market. First, as I’ve written many times, SaaS vendors have yet to crack the code on creating a VAR-friendly model. Customer demand for SaaS is on the rise, and many VARs want to add a SaaS offering to their line-up. But, they worry that SaaS vendors (who often sell both direct and through channels) will disintermediate them once the partner has brought in the business. VARs searching for a SaaS option are likely to find Acumatica’s 100% indirect model, combined with a choice of delivery options and a Microsoft-centric approach, quite attractive. The fact that VARs can sell the same solution via either delivery model is also a plus—most VARs don’t want to be evangelists, they want to sell the solution that best fits the customer’s needs.
Acumatica offers customers a distinct value proposition as well. Customers can either self-select what model (SaaS or on-premise) will work best for them, or Acumatica and its partners can help them decide what will work best. In contrast, other major vendors in the mid-market space—including Intacct, NetSuite, Microsoft, Sage, etc.—have a pre-determined agenda. Acumatica also offers customers that want to switch from one delivery mode to the other discounts that take into account their prior investments.
As a relative newcomer, Acumatica will have to work harder than more established rivals to prove that it has both the product capabilities and corporate viability to be a “safe” choice. However, if Acumatica can keep pulling in VARs, and broadcast its best of both worlds story out to the market, it should be able to cross this chasm.