Acumatica: Mapping ERP to SMB Customers

Posted on September 14, 2016 by lauriemccabe
acumaticaI had the opportunity to talk with Jon Roskill, Acumatica CEO, at the company’s September 7 analyst event. We talked about Acumatica’s solution, customers, and the newly released Acumatica 6.0. Here’s a summary and video excerpts from our conversation. 

Laurie: Hi Jon, thanks for speaking with me today. Before we get into what’s new with Acumatica 6.0, can you start by giving us some background as Acumatica?

Jon: Sure, Acumatica develops and sells business applications to mid-market companies. Typically, companies that are about a $10 million revenue number, going up to…we have customers now that are in the billions. The company was formed in 2008, by a set of folks who were really ERP veterans from the ’90s, by some of the founders of Solomon saw the cloud transition happening. They said, “Wow, this cloud platform is real, and we should build an ERP product for the mid-market for that platform.” And that’s how Acumatica started.

How Is Acumatica Different Than Other ERP Vendors?

Laurie:   As you know, there are a number of companies competing for business in that space. What differentiates Acumatica from the pack?

Jon: A few things. One is we had the advantage of coming to market a bit later than many. We were founded in 2008, the year the iPhone shipped, and the year HTML5 was ratified as an internet standard. So we’re built on modern cloud technologies. But, 2008, that’s not yesterday either. It takes about five years to build a very robust platform. So, we have the right combination of new technology, and we have thousands of customers using it. It’s proven and tested. The second thing is our licensing policy’s very different from most ERP vendors, who are trying to milk as much money as they can on a user model basis.

Laurie:  With per user, per month pricing?

Jon: Exactly. Our philosophy is that ERP is the system of record for the company, and that it’s very important that people in the company who should get access to that information should be able to get that access when it’s needed–without this having to drive a decision of when the business should have to pay for another license or not. So, we basically slot customers into small, medium, or large configurations. From then they get unlimited access, both for employees but also sometimes more importantly is their partners.

Laurie:  What about their customers?

John: Yes. We service a lot of businesses that are in ecommerce distribution, wholesale warehouse-type operations, and they have customers or partners interfacing through some sort of portal, and you don’t want to have to pay a license for those customers, who may place an order once a month. And the third differentiator is mobile. Our mobile solution is really unique in that it’s extremely rich, available on iOS and Android, and we truly differentiate versus any of our competitors.

Laurie: In what respect?

Jon: It’s included. What most of the competitors do is they give you a fixed application. They’ll give you an expense app, or a time reporting app. What Acumatica does, we’ll give you a set of applications out of the box, but because we deliver through a channel–this is another thing we should talk about some point, is our partner channel–because we deliver through a channel, our partners can add value and customize so that time and reporting application is unique to your company, and not a generic.

Laurie: What kind of uptake are you seeing on the mobile capabilities in your customer base? .

Jon: Very strong. Especially lately this year, pretty much everybody is doing something with mobile. Some vendors will tell you that because they have a browser-based solution, that means they’re mobile, but it really isn’t. If you look at the typical accounting screen, it’s very complicated. So, you don’t want to take this really complicated screen and look at it on a little phone screen. You want to have simplified screens, tailored to the device, that work with your workflow.

At this point, all of our customers are using our expense app. So if you’re having dinner with a customer, you just snap picture of the receipt, and automatically file the expense report from your phone. So you don’t have a stack of them on your desk at the end of the month, which I certainly used to have.

Laurie: That brings up another question. ERP, enterprise resource management, and business application management–these labels can cover many different functions. What are the key functions that the Acumatica handles?

Mapping Functionality to Customer Stages

Jon: The starting point is financials. In fact, 20% of our customers are coming from QuickBooks. They’ve outgrown QuickBooks, and need to figure out something else. If they’re in QuickBooks Online, they’re already in the cloud, so it’s a very easy migration to an Acumatica solution. It’s typically driven by something such as having to process multi-currency transactions, because they’re getting paid in other currencies. Or they open another office as a different subsidiary. So, it starts with the financials, I call called that “tracking the business”. You go into Acumatica, and you can see what’s going on with the money.

The second phase is that customers may start using Acumatica for things like CRM and distribution. You’ve got your customers in your system, and you want to help drive renewals or service opportunities for your business. Acumatica distribution capabilities help you track inventory, shipments, and more. At this point you’re truly operating your business on top of Acumatica.

The third stage is when customers become very thoughtful about their business processes and workflows. You know, there are too many companies out there that I see where they make the business fit the software, and that’s just wrong. The software should fit the business. So, you want to think about how should your business operate, what processes do you really want to get good at. At this point, Acumatica has a workflow engine that lets you encode these processes into Acumatica.

Laurie: A company’s unique workflow?

Jon: Your unique processes, right. Our partners help our customer do that, so at that point you have a custom business solution with Acumatica, probably in the price range of $75,000 to $200,000.

Laurie: So what’s new with Acumatica 6.0? Are you announcing a new vertical focus?

What’s New In Acumatica 6.0

Jon: Our customers fall into some major verticals. Professional services, manufacturing, ecommerce, and retail solutions, and distribution or wholesale distribution are the top ones for us. We announced in February that we had acquired M5 Solutions, a service management company, and we’re integrating that with Acumatica–and it’s been selling like crazy. Q2 was awesome, awesome results for the company, partially driven by how much that new service module that we’ve been attaching.

Laurie: In addition to the fact that companies like to have things their way, what else have you heard from customers that influences product development?

Jon: Our CRM product is a good example of that. Often customers buy ERP from one vendor and CRM from another. Then you need to bring the two together and synchronize them, and you wind up with two separate customer formats. The fact that Acumatica sells both an ERP and a CRM is an advantage for half of our customers, 50% use our CRM, and they love it. There’s one version of the truth all the time, and that’s a place where…

Laurie: And what’s new in Acumatica 6.0 in terms of Office 365 integration?

Jon: In the 5.0 release, we introduced Office 365 integration, and integrated Office 365 contacts and tasks and calendar with Acumatica CRM. But we know that many users don’t spend their life in the accounting system, they actually live in things like Outlook as well. I certainly do. You probably do as well. So in 6.0, we’re launching a new Acumatica Outlook add-in. So, when you’re working inside Outlook, you’ll have the context of all of your Acumatica contacts there. So, if you’re looking at an email from Laurie McCabe and Laurie McCabe has an outstanding invoice for$200,000, it will pop up and show me that. Or if, for instance, a regular service update needs to be done, that will show up. So, it’s the sort of thing you would have in your system automatically. So, when you’re talking or emailing with someone, you see it in context.

Laurie: It sounds like Acumatica 6 has some great updates, and thanks for sharing some high-level background as well.

 

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Dealing From a New Deck: Oracle Buys NetSuite

Posted on July 28, 2016 by lauriemccabe

Slide1Everything came full circle with NetSuite today, when Oracle announced that it plans to acquire NetSuite for $9.3 billion.

Flashback

In 1998, Evan Goldberg, founder of what was then NetLedger, visited our analyst team at Summit Strategies, where I started my analyst career at back in the day. At the time, traditional software companies were starting to dabble with the application-hosting model. In this model, application service providers (ASPs) hosted software designed for on-premises delivery and delivered it to clients over the Internet. But Goldberg’s NetLedger was the first (to my knowledge) to deliver software designed from the ground up to be delivered over the internet, as a service. It would take a few years for the term “cloud” to be coined, but the seed was planted.

At the time, NetSuite and a handful of other pioneers, most notably Salesforce, were the upstarts of the software industry. They rattled traditional software vendors’ comfortable development, licensing, delivery and service models with multi-tenant architectures, subscription licensing and 24/7 service designed to revolutionize the software industry. They pledged to “democratize” software, and make it easier and more affordable for small businesses to take advantage of solutions that previously had been out of reach.

However, even as NetSuite built its revolutionary persona, it relied on the old guard for money and technology. NetSuite was built on Oracle’s database, and Larry Ellison, Oracle’s founder, provided financial backing for the fledgling company from the start. In 2001, Oracle even briefly tried marketing the Oracle Small Business Suite, powered by NetLedger, as its solution for small businesses. Since Oracle didn’t have an effective small business sales or marketing organization, that offering was quickly scrapped, and in 2003, NetLedger became NetSuite.

Fast Forward

canstockphoto9457335Oracle’s acquisition of NetSuite was pre-ordained since 2008, when the “great recession” hit, and the OPEX cloud model became much more attractive to cash-strapped companies. People tried cloud computing because they had to—and surprise—they liked it. Not just because of the licensing and pricing advantages, but also because of the speed, ease, scalability, accountability and service advantages it provided. They never turned back, and today cloud computing is not only mainstream, but poised to overtake traditional on-premises computing in many solution areas: Gartner projects it will be a $204 billion market in 2016.

Meanwhile, despite the fact that Ellison notoriously derided cloud computing in the past, he continued to invest in NetSuite, and now owns about 40% of the company. Ellison has also changed his cloud rhetoric over the years. In 2015 he said that “We no longer pay any attention” to traditional competitors such as SAP and IBM, and that Oracle would be the “biggest company in the cloud.” Recently, he put a number on that, saying that he would beat Salesforce to become the first $10 billion cloud company.

In reality, however, cloud revenues are still a very small part of Oracle’s business. The company’s fiscal 2016 Q4 results state that Oracle’s total Q4 revenues were $10.6 billion, with cloud plus on-premise software revenues accounting for $8.4 billion of total revenues. While cloud software as a service (SaaS) and platform as a service (PaaS) revenues were up by 66%, they tally up to just $690 million for the quarter. And even as Oracle purports to be growing its cloud business at a brisk pace, a former Oracle finance manager has been accused the company of “cloud washing”—inflating its financial results by re-categorizing existing solutions as to fit in the cloud bucket.

Dealing From a New Deck

deck of cardsEllison has hedged his bets for a long time. He’s played his traditional hand at Oracle, while also holding a great cloud card with his NetSuite investments. He could use NetSuite to experiment with the cloud, and see how things unfolded, without unnecessarily disrupting business as usual at Oracle.

If nothing else, this deal signals that things have now unfolded. Along with buying market share, Oracle is buying Netsuite’s cloud culture and sensibility—which it needs.NetSuite has paved the way in the cloud, and will add to Oracle’s cloud credibility. Oracle gets a credible cloud offering in NetSuite—no cloud washing required—to compete against the likes of Salesforce, Workday, and a slew of other pure cloud companies. And, the Oracle sales and marketing machine should help push NetSuite into consideration in more and bigger deals.

But, while NetSuite’s growth has been strong, increasing at more than 30% for the last few quarters, the company announced that in Q2 2016, it hit Q2 revenues of $230.8 million. So, NetSuite alone is  not going to get Oracle to $10 billion in cloud revenue anytime soon.

Maybe more important, we live in an age where digital disruptors often hold the best cards, customers have more choices, and digital word of mouth supersedes corporate sales and marketing tactics. With this in mind, it will be interesting to see how Oracle will play its new hand out.

 

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The Right IoT Stuff: V5 Systems Wins Dell’s IoT Contest

Posted on June 8, 2016 by lauriemccabe

The Internet of Things (IoT) has come a long way since 1982, when researchers at Carnegie Mellon University modified a Coke machine to create the first internet-connected appliance, which could report on inventory and whether drinks were cold.

Today, cloud, analytics, wireless and other technologies have advanced to the point where IoT can provide a simple, effective way to communicate with and through machines to get things done more easily, and to make better decisions. IoT, which connects physical world objects to the Internet to sense, control, interact and report on activities, is growing at an exponential pace. IDC and Intel project that the number of IoT objects will grow from 2 billion objects in 2006 to a projected 200 billion by 2020, equating to about 26 smart objects for every person in the world. And while consumer devices get the lion’s share of attention, industry represents the greatest opportunity for IoT to help companies track inventory, manage operations, improve efficiency, save money and protect people and property.

So it’s not surprising that according to CB Insights, corporate investors (e.g. corporations and their venture arms) have funneled $3.2B into the IoT space over the past six years, and that in 2015, they nearly doubled their 2014 IoT investments.

V5 Systems: From 12 Volt Batteries to State-of-the-Art Outdoor Security Systems

Amidst so many IoT startups, what makes one rise to the top? Dell has just announced the winner of its “Connect What Matters” Internet of Things Contest, in which it sought out innovative IoT solutions for businesses that incorporate Dell’s Edge Gateway. More than 970 contest registrations from 93 countries with 16 winners from 9 different countries claiming prizes worth more than $600,000.

Dell awarded the top, Platinum honor to V5 Systems for its V5 Portable IoT Security System, which fuses edge and hybrid cloud analytics capabilities into a pre-integrated, compact and solar-powered wireless outdoor security system.

Mazin Bedwan

Mazin Bedwan, V5 Systems President & COO

As with most great stories, V5 has an interesting beginning. I had a chance to interview President and COO Mazin Bedwan, about the company’s roots and solution. Mazin had previously been CEO of Pacific Stereo in the Bay Area, which was the largest 12 Volt automotive electronics retailer in North America. A few years ago, Steve Yung (then an ex-Cisco executive, now Chairman and CEO of V5 Systems) came to Pacific Stereo looking for a four-camera security system for his Volvo SUV. He wanted it to run–regardless of whether his car was running or not. Mazin tried to sell him a $200 car alarm, but then learned why Steve wanted an always-on camera system. Steve lived in a nice neighborhood that was experiencing rolling blackouts, making it easier for criminals to break into cars and homes. He wanted a car-mounted security system to watch his house from his driveway, as he was intent on catching the bad guys.

A few weeks later, Mazin and his brother Eddie delivered the camera system to Steve, who decided it was commercially marketable after it recorded video that led to the arrest of a home intruder/burglar. They named the company after V5, the region of the brain responsible for motion detection.

Bringing the Right Stuff to Dell’s IoT Contest

PSU Solution

V5 Systems V5 Portable IoT Security System

V5 Systems’ V5 Portable IoT Security system solves a big and pressing problem. Until V5 brought this solution to market, outdoor security vendors would cobble together solutions with off-the-shelf parts. Because power isn’t readily available in many outdoor locations, vendors would fill up trailers with 12-volt batteries and or diesel generators to back up solar panels, power cameras and motion sensors, and then tow the solution around.

Mazin emphasized that V5 chose innovation over integration to create an alternative to this cumbersome approach. Numerous patents and trade secrets attest to V5’s mission to deliver IoT value through innovation on many fronts.

Superbowl Deployment

V5 Portable Security Unit Deployment at Super Bowl 50

For instance, V5’s Portable IoT Security System:

  • Overcomes the power supply challenge. V5 has been granted 6 patents for its solar-powered smart power system, which enables it to run continuously outdoors. This negates the need for multiple batteries and generators, and the space they take up.V5 Systems has developed their own proprietary power and power management system. This means businesses can deploy the device to create a security zone in places without power–such as on a mountain top or in a forest–and get real-time alerts sent to their IoS or Android devices. 
  • Makes installation and transport easy. Businesses can install and start using the device, in under an hour. V5 pre-integrated computing, power, communications, storage and sensor capabilities in what amounts to a micro-data center. Because no trenching is required, users can circumvent lengthy permitting processes. And, at less than 20 inches long, it’s a snap to take the device down and redeploy in another location, such as changing security vantage points at festivals, concerts and other events.
  • Features bullet-resistant solar panels. Solar panels are a real pain point for law enforcement, because people can shoot and break them. V5’s proprietary bullet-resistant solar panel provides customers with an additional level of reliability, and gives V5 strong differentiation versus competitors.
  • Improves analytics accuracy. V5’s analytics library increases the accuracy of the data sent from the device. For instance, motion sensors at airports can be triggered by turbulence from planes, but V5’s analytics library provides more granular identification. For instance, at San Jose Airport, V5 has achieved 98% accuracy in detecting actual people or vehicles versus motion from jet turbulence.
  • Not only sees, but also hears. Unfortunately, campus violence has become all too common. Prior to deploying V5’s multi-sensory solution, San Jose State University lacked the capability to deploy a multi-sensory security solution for Spartan Stadium and one of its dorms. Now, the university has deployed V5’s Portable IoT Security System with cameras as visual sensors and microphones as acoustic sensors, to monitor dorms and Spartan Stadium from vantage points outside the facilities. The multi-sensory capabilities enable them to detect gunshots with 95% accuracy distinguishing gunshots from other loud sounds, and also to triangulate where the shots are coming from.
  • Will soon be able to detect chemicals. Methane, ammonia, chlorine and other gases are hazardous to breathe. With enough volume, these gases can also cause explosions, as on a Los Angeles city block in 2016, and in a cow barn in 2014 in Rasdorf, Germany. V5 will add chemical sensors in Q4 of this year.

Scaling With Dell

V5’s system is relevant and replicable across many industries. But V5 initially targeted law enforcement agencies. According to Mazin, they figured if they could succeed with skeptical cops, they’d succeed anywhere. Law Enforcement represents 10% of V5’s addressable market but accounts for 90% of its credibility. This strategy has worked, with endorsements from early law enforcement customers helping V5 open the door to sell to airports, universities, transportation, oil and gas, agricultural and other industries.

However, V5 needed help to effectively scale its solution, sales and service capabilities. Through its partnership with Dell, which began in 2015, Dell Services sells a unique V5 SKU. The SKU includes V5’s portable security unit, sensors, enclosure, power system, communications, storage and Dell’s Edge Gateway. Dell Services also provides 24/7 first-line tech support for the system, and access to Dell Financial Services.

Dell Unit

Dell Edge Gateway

 

V5 has also standardized on Dell servers.Dell’s Edge Gateway serves as the “industrial IoT brain” for the system, connecting to V5 devices. The Gateway Edge aggregates and analyzes the input, and sends it on to users’ Android or IoS devices. Because the Edge Gateway is designed for harsh conditions (from temperatures ranging from -30°C to 70°C), has a low-energy, fanless design, wall and DIN-rail mounts and it can sit within the V5 device. As a result, it sends only meaningful data to the cloud or control center, reducing data overload and bandwidth requirements.

Summary and Perspective

IoT is more than a technology buzzword. It is literally changing the very definition of computing. With IoT, devices and objects of all shapes and sizes can communicate directly, and as Mazin noted, “we’ve created a system that fits in your hands, has all the capabilities of a data center and can be deployed in any outdoor environment.”

IoT companies such as V5 and others highlight the enormous potential to IoT to do many things more easily, cost-effectively and intelligently than was possible in the past. IoT challenges–including privacy, security and skills–still need to be addressed, but the increasing digitization of the physical world make the sky is the limit for IoT innovation.

Mazin, Steve and Eddie seized this opportunity, creating a new business and business model based on the Industrial IoT. They serve as a great example of how IoT is redefining and reshaping how businesses get things done, and the elements needed to turn an idea into a reality.

This post was sponsored by Dell.

 

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SAP’s Digital Transformation Story For SMBs

Posted on May 25, 2016 by lauriemccabe

“Digital transformation” is one of the top trending buzzwords in technology today. But what does digital transformation mean? In broad terms, many define it as using digital technology to enable innovation and new, often disruptive, business models. However, technology vendors put different spins on digital transformation, depending on how their solutions fit in to the puzzle.

Most small and medium business (SMB) decision-makers view technology as a key to improving business processes and outcomes (Figure 1). But at the same time,SMBs rank “figuring out which technology solutions can help my business” as one of their top three technology challenges. Although SMBs have bought into the concept of using technology to improve and transform their businesses, many struggle to when it comes to putting a strategy in place to achieve these goals.

Figure 1: SMB Technology Attitudes and ChallengesSlide1

So I was interested to hear how SAP is framing the digital transformation story for its SAP Business One partners at SAP’s Business One Americas Innovation Summit in April. Although the ERP giant is best know for its large enterprise solutions, Business One, with over 50,000 customers worldwide, is SAP’s flagship business management solution for SMBs.

SAP’s 50,000 Foot View of Digital Transformation

In his opening keynote, Jonathan Becher, Chief Digital Officer at SAP, addressed the growing reality that today, companies need to disrupt or be disrupted. Unlike the industrial revolution, which allowed for a more linear approach to change, the digital era requires exponential change. Becher described digital transformation as consisting of three fundamental shifts:

  1. New customer experiences, such as in the music industry, which has evolved from vinyl records, tapes and CDs to iTunes and then Spotify and other streaming services;
  2. New business models, again using the example of the music industry, and its evolution from analog to digital buying and streaming;
  3. New value creation, as in the case of Airbnb, which has used technology to create a new way for people to list, find, and rent lodging.

While human creativity provides the spark, technology is the fuel that enables businesses to change their business processes and make the vision a reality.

Figure 2: Digital Business Requires Different ProcessesScreen Shot 2016-05-24 at 9.21.49 PM

HANA: SAP’s Innovation Foundation for Business One

In 2014, Business One became SAP’s first business management solution for SMBs running on SAP’s HANA computing platform. Positioning Business One SQL Server edition as the past, Luis Murguia, SAP’s Senior Vice President and General Manager for Business One, positioned SAP Business One HANA as the “foundation for innovation.” With Business One HANA, SMBs can analyze massive amounts of structured and unstructured information within seconds instead of days, and use predictive analytics to gain new insights into data and optimize business decision-making.

SAP has also modernized Business One with new cloud deployment services from within the SAP cloud. The cloud option is key to SAP Business One HANA growth in the Microsoft-centric SMB market, as it negates the need for the SMBs to understand deploy and manage a new database.

I asked partners at the event, including ECS, Vision 33, Boyum and AchieveIT Solutions, for their views on why customers choose Business One HANA. They noted the solution’s enterprise search capability, which allows users to quickly search for key information. Instead of stepping through tedious pull down menus to find information, such as how many units of an item are in stock, what’s sold and what’s been reordered, users can do a quick search. Another favorite is the ability to create interactive, Excel-like spreadsheets that are connected to the HANA database and refresh in seconds, enabling users to quickly slice and dice data, and make decisions based on real-time information. Partners also said customers see Business One HANA’s user-customizable dashboards and predictive analytics capabilities as top benefits.

Murguia described some real-world examples of how SMBs are using Business One HANA to transform their businesses. For instance, he discussed how a Medistance, an Omron medical equipment distributor in East Europe, changed the game against larger competitors by developing a remote managed care service. Medistance, which had been selling the devices, created a remote managed care service to monitor users’ blood pressure and glucose levels. It now gives away the devices to subscribers to its $15 per month service, which provides alarm notifications and services to evaluate risks and treatment recommendations.

SAP Business One Partners: Key to Moving from Steady to Exponential Growth

Overall, SAP has been steadily growing Business One’s footprint. Sales are up 17% year-over-year, and in 2016, Business One has been adding an average of twenty new customers a day. More important, Business One HANA revenues are also rising. According to SAP, 180 of the 1,000 new Business One customers last quarter chose HANA. However, while SAP is making good progress in wooing new Business One customers to HANA, key challenges remain when it comes to catalyzing exponential growth.

As Murguia noted, Business One partners are essential to accelerating this type of growth. But although some partners have seized on the opportunity Business One HANA provides to sell the digital transformation story, others are sticking with what they know—which is the Microsoft SQL Server version of Business One.

To persuade partners to make this transition, Murguia exhorted them realign their resources and thinking from opportunistic to having a clear vertical and geographic focus. With industry expertise, partners can provide SMBs with guidance for industry-centric innovation, using HANA, cloud, analytics, and mobility as the fuel for change. He underscored the need for partners to make this shift by noting that:

  • SAP introduced a new mobile app for sales professionals, which will only run on Business One HANA.
  • Only Business One HANA supports multi-currency.
  • SAP is providing incentives to sell Business One HANA.
  • 95% of new customers use Business One with an industry add-on, and 200 top Business One ISV partners have migrated over 600 vertical apps to HANA.
  • Millennial decision-makers will demand the type of Internet-like experience that Business One HANA provides.

Upping Business One’s Go-To-Market Game

SAP is investing in industry-specific marketing programs for consumer packaged goods (CPG), industrial machinery and components, professional services, retail, wholesale and distribution. It is also recruiting non-traditional partners with industry expertise, and providing more support from SAP inside sales to help partners build their pipelines. In addition, SAP has extended its University Alliance program beyond four-year institutions to partner is with community colleges to use Business One HANA in the classroom to encourage more trained millenials into the partner fold.

The vendor is also doubling down on content by making it easier for partners to find and use relevant case studies and to personalize their own success stories. SAP will help partners create more mobile-friendly, bite-size content for its Business One Repository, which currently has over 2700 testimonials. SAP is also “humanizing communication” with local advertising with its “Business One around the world” theme which features local landmarks, and a push to expand social media engagement beyond current Business One customers to a broader swath of businesses in it’s targeted vertical markets.

Perspective

The digital transformation imperative is clear. Businesses can actively embrace new possibilities and set themselves apart in their markets, or ignore it and risk being stream rolled under.

SAP Business One has a good story and positive proof points in terms of helping SMBs navigate this transformation. In fact, partners told me that once they are in a deal, win rates are over fifty percent.

However, getting into consideration (outside of some European countries and Latin America, where SAP Business One is a recognized SMB brand) is still a struggle. In many geographies, SMBs often discount SAP as a big business brand that’s not for them.

Furthermore, SMBs have many choices when it comes to ERP. While SAP Business One HANA is much less complex than its large enterprise ERP solution, Business One is arguably more complex and takes longer to deploy than several other choices. Some businesses are willing to accept complexity in return for a high degree of customization capabilities, but many will balk at the upfront learning and implementation curve,

To meet its exponential growth goals, SAP needs not only to deliver on the marketing programs discussed above, but must also:

  • Develop more compelling “high air cover” brand awareness. SAP needs a much more compelling, omnichannel brand campaign to increase the odds that Business One gets invited to the SMB table.
  • Do a better job of “connecting the dots.” How exactly does SAP Business One HANA help SMBs transform and achieve success in the digital era? Why is It more effective than other solutions? SAP must paint a more detailed picture and provide more industry-specific metrics to drive the story home.
  • Clear up the cloud story. Business One cloud options are still difficult to sort through. My understanding is that services from the SAP cloud are available in North America, but not in other countries. Some of the European partners I spoke with have their own hosting centers, and say that because of customization requirements and data privacy laws in Europe, multi-tenant cloud isn’t a viable option. If SAP really wants to use the cloud to fuel HANA adoption, it needs to have a much more straightforward cloud story or risks having pure cloud competitors undermine it in deals where cloud is the customer’s preference.
  • Put the SAP SMB puzzle pieces together. SAP needs to pull together Business One, Business By Design, Concur, Ariba, SAP Anywhere and other SMB-related SAP solutions into a more holistic, understandable SMB strategy.

SAP has come a long way in transforming the Business One solution for the digital era. However, only time will tell if it can go the distance with additional steps necessary for solution transformation, partner development and marketing reinvention.

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Using Cloud Analytics to Make Big Data Actionable For SMBs

Posted on February 22, 2016 by lauriemccabe

abstract data

“Big data” is a big buzzword in the IT industry—and for good reason. Basically, we’re doubling the amount of digital data that we create every two years, according to the EMC Digital Universe Study. Think about all of the different types of information that’s moved from physical to digital form just over the last several years.

Doctors have moved from paper charts to electronic medical records; merchants have moved from paper credit card imprinters to POS terminals to virtual terminals to mobile payment devices. Internet of Things (IoT) technology is equipping objects—from Fitbits to traffic sensors to seismographs—to record, report and receive data, and create entirely new digital data streams. And everyone is growing their digital footprint on myriad of social networks, and with the companies they do business with,

Organizations that can effectively harness and use this information can gain dramatic market advantages over those that don’t: SMB Group’s 2015 SMB Routes to Market Study shows that SMBs that have deployed analytics solutions are 14% more likely than peers to expect revenues to rise than peers that rely on spreadsheets for business analytics.

But let’s face it—most small and medium businesses (SMBs) don’t have dedicated data scientists on staff. Without this type of in-house expertise available, SMBs feel that moving from basic tools that analyze internal, transactional data to a more comprehensive analytics approach is out of reach.

However, a new generation of powerful, yet cost-effective cloud-based analytics solutions are emerging that can help level the analytics playing field for more SMBs.

Cloud Is the New Normal for SMBs

SMB adoption of cloud solutions has grown steadily over the last few years (Figure 1) to become part of the business fabric for most SMBs. In fact, SMB Group’s 2015 SMB Routes to Market Study reveals that SMB cloud deployments are poised to overtake on-premises deployments in the next year in areas such as collaboration, file sharing and marketing automation.

Figure 1: Trends In SMB Cloud AdoptionSlide1
SMBs are moving to the cloud include because they view it as a more cost-effective, flexible and faster way to deploy IT solutions (Figure 2). Cloud computing take care of IT infrastructure, applications, and ongoing management and support, offering SMBs economies of both scale and skill.

Figure 2: Top Reasons Driving SMB Cloud AdoptionSlide2

Analytics Meets the Cloud

In the analytics space, in which technology is advancing at warp speed, cloud analytics providers are building powerful, yet easy to use analytics solutions that few SMBs would have the resources or expertise to build on their own.

For instance, cloud analytics solutions often utilize database technologies that can deal with both structured and unstructured data, so that you can analyze different types data from both internal and external sources. They also use technologies to speed data processing, number crunching and analytics to deliver analysis more quickly to decision-makers.

Some vendors provide pre-packaged applications that integrate all of the components necessary for analytics solution, including connectors to business solutions; the data model; tools to extract, transform and load (ETL) data; a semantic layer; query and reporting capabilities; and predefined metrics, reports and dashboards.

In addition, cloud analytics providers build their infrastructures and services to support thousands of companies. This means they can offer customers on-demand scalability to adjust resources up or down as needed for peak decision-making times, such as during the holiday season for retailers.

Cloud analytics also gives everyone access to the same information in real-time. Instead of trying to reconcile data from different spreadsheets and applications, everyone is automatically on the same page in terms of data so they can reach consensus and make decisions more quickly.

As important, cloud analytics solutions are often designed for business users, offering capabilities such as:

  • User-friendly interfaces, with guided discovery to make it easier to ask the questions that will lead to “aha” moments and insights.
  • Visualization tools that turn rows of data into visuals that represent what the data says in intuitive ways.
  • Natural language capabilities so users can easily query the data.

With these capabilities baked in, SMBs can start thinking about moving beyond descriptive analysis, which provides insight into the past to answer, “What has happened?” to more sophisticated analysis, including:

  • Predictive analytics, which use statistical models and forecasts techniques to understand the future and to answer, “What could happen?” For instance, you could use predictive analytics to anticipate customer behavior and purchasing patterns, predict sales profitability trends, or forecast inventory demand.
  • Prescriptive analytics, which use optimization and simulation algorithms to provide advice on possible actions to answer, “What should we do?” For example, Google’s self-driving car uses prescriptive analytics to decide whether and when the car should change lanes on highway by anticipating what might be coming in terms of traffic and other drivers.

SMB Preference for Cloud Analytics Is Growing

As in other solution areas, more SMBs are opting to analytics solutions in the cloud (Figure 3). SMB Group’s 2015 SMB Routes to Market Study shows among the SMBs that have purchased or upgraded an analytics solution in the past 24 months, 62% selected an on-premises solution, while 38% chose a cloud option. Looking ahead, however, just 40% of SMBs that are planning to purchase and/or upgrade analytics solutions are planning to buy an on-premises solution, while 42% are planning to use a cloud offering, and 18% have yet to decide.

Figure 3: SMBs’ Current and Planned Solution Deployment Methods for Business Intelligence/AnalyticsSlide3

Summary and Perspective

At a time when information is proliferating at an unprecedented rate, SMBs need to be able to easily access, understand, analyze, report and act on critical information. With the right tools, decision-makers can spot new opportunities, avoid mistakes and identify small problems before they mushroom into big ones.

Fortunately, more vendors are building powerful yet cost-effective cloud-based analytics solutions that are much easier to “layer” on top existing data than in the past. Designed for business users, these solutions offer user-friendly interfaces, guided discovery, visualization tools and natural language capabilities to help bring data to life.

While SMBs must still do their homework to determine which of the growing list of cloud analytics solutions will be the best fit for their businesses, the advantages of fact-based decision-making cannot be underestimated. The trend towards cloud analytics will likely strengthen in 2016, as more SMBs continue to opt for solutions that are easy to buy and use and can provide faster and better value to the business.

This post is sponsored by Dell.  

 

 

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Does Salesforce’s Refreshed SMB Strategy Add Up?

Posted on January 19, 2016 by lauriemccabe

salesforce logoSalesforce hosted its second annual Analyst Summit last week. This year’s format was much more engaging and interactive format than last year, sparking lots of interesting questions and discussions among analysts and the Salesforce team.

At a high level, Salesforce’s executives laid out the company’s key themes for 2016, which included:

  • Continuing to invest in its core CRM space to maintain market dominance. To that end, Salesforce recently introduced its new Lightning user experience and development framework, along with Trailhead, its interactive learning platform to help users and developers transition more quickly and easily to Lightning.
  • Using IoT to strengthen customer engagement. Salesforce announced Thunder, its IoT Cloud, at Dreamforce 2015. Salesforce’s Adam Bosworth emphasized that while Thunder isn’t yet ready for prime time, it is in pilot with several customers. Salesforce is focusing on connecting IoT with business processes and customer experience to help its customers to help drive sales and revenues.
  • Reimaging Wave Analytics to provide better insights to users. Salesforce initially launched Wave Analytics as a platform in 2014, with plans to develop apps on top of the platform over time. After hearing from customers that it was too expensive and focused too much attention on the platform play and not enough on providing enough prebuilt apps for business users, Salesforce introduced its next iteration of Wave at Dreamforce 2015. In addition to a streamlined pricing model, the new version offers prebuilt sales templates and apps that make it easier for sales reps to get more value from their customer data.

Of most interest to me, however, was that Salesforce devoted more time to its strategy and solutions for SMBs than last year.

From SMB Startup To Enterprise Powerhouse

Salesforce.com website circa 1999, courtesy of Internet Archive Wayback Machine (https://archive.org/web/).

Salesforce.com website circa 1999, courtesy of Internet Archive Wayback Machine (https://archive.org/web/).

When Salesforce was founded in 1999, it was focused on the SMB market. As a cloud pioneer, Salesforce captured the market’s attention with its story of faster, easier, better and less expensive CRM. While SMBs were its target in the early going, the marketing genius of Benioff and a stellar sales team quickly moved Salesforce upstream, and capitalized on replacing enterprise dissatisfaction with Seibel to become the undisputed 800-pound CRM gorilla in the enterprise market.

To accommodate demands from large customers and a rapidly evolving market, Salesforce expanded its vision over the years to become what it now terms a “customer success platform.” Today, this platform encompasses many parts and solutions, including:

  • Multiple editions of its core CRM solution
  • A veritable storm of clouds (sales, marketing, service, community, etc.)
  • New Thunder and Lightning initiatives
  • More than 35 acquisitions, from ExactTarget to SteelBrick.

However, as I wrote in this post, Salesforce’s SMB Story: Great Vision, But a Complicated Plot Line, amid its enterprise success, the Salesforce story became harder for the average SMB to parse through. And, while the vendor offered relatively low entry-level pricing for it former Group Edition ($25/user/month), SMBs faced a steep jump to Professional ($65/user/month) if they needed more functionality that many wanted, such as pipeline forecasts, campaign management, contract storage and quote delivery, custom reporting and dashboards.

Either as a by-product or intentionally, Salesforce’s SMB story has evolved to focus on the “fast growth” SMBs and digital elite, where it has done an excellent job of capturing market share.

But when it comes the vast majority of SMBs the math is revealing. True, Salesforce is the #1 CRM vendor in SMB: SMB Group’s 2015 Routes to Market study shows that 25% of SMBs (1-999 employees) that currently use a CRM solution use Salesforce. However, 75% use other brands, from old-guard competitors such Microsoft and ACT!, to newer ones such as Insightly and Pipeliner. And then there are all of the SMBs still using Excel, email and/or basic contact management solutions.

Furthermore, according to Salesforce, about 150,000 businesses in total use its solutions, and about one-third of them (or 50,000) are SMBs. When you consider that there are roughly 6.5 million SMBs with employees (plus another 17 million or so solopreneurs) in the U.S. alone, Salesforce has barely scratched the surface in SMB market.

Salesforce’s New SMB Story

Recently, Salesforce has begun to refocus its SMB story, for a few reasons. In addition to the huge, untapped market potential, Salesforce sees SMBs as canaries in the coal mine in terms of requiring the simplicity and ease of use that all businesses—even large ones—increasingly demand from business application vendors. Salesforce also wants to tap into SMB diversity and innovation to help keep pits own focus fresh.

Screen Shot 2016-01-19 at 12.57.27 PMTo that end, Salesforce has recently taken a couple of big steps to refocus its SMB story, including:

  • Launching SalesforceIQ for Small Business at Dreamforce in September 2015. Positioned as “the smart, simple CRM to grow your business,” SalesforceIQ, at $25/user/month, replaces Group Edition as the vendor’s CRM entry point for SMBs. Based on the acquisition of RelateIQ, SalesforceIQ automatically captures, analyzes and surfaces customer information across email, calendars and other channels, using pattern recognition to provide users with sales insights and proactive recommendations.
  • Announcing a free integration between Desk.com, Salesforce’s small business customer service app and SalesforceIQ. The integration gives give SMBs a unified view of their customers, enabling them to provide the more connected, personalized experience that their customers will increasingly demand.

Screen Shot 2016-01-19 at 1.02.03 PMSalesforce also quietly rolled out Trailhead  in 2014, and then showcased it at Dreamforce 2015. Trailhead provides users, developers and administrators with a guided, learning path through the key features of Salesforce to help people get more value from Salesforce solutions more quickly. According to Salesforce, Trailhead earners have passed more than 1,000,000 challenges, earning more than 250,000 badges.

In addition, Salesforce’s AppExchange—one of the first and most successful app stores, which just celebrated its 10th birthday—offers more than 2800 applications that integrate with Salesforce). Many of these are SMB-oriented, and Salesforce continues to ramp up SMB partnerships and integrations, with vendors from MailChimp to Slack to Sage Live (link to blog) on board.

Perspective

There are many things I like about what Salesforce is doing in the SMB space. I think SalesforceIQ gives SMBs a much better bang for the buck than Salesforce Group Edition. Furthermore, the integration between Desk.com and SalesforceIQ gives SMBs a cost-effective way to improve their customers’ experience, and level the playing field against larger companies in today’s increasingly social, omnichannel world.

Salesforce’s ecosystem is also a huge plus for SMBs that are already Salesforce customers. The AppExchange makes it easier for SMBs to find apps that will work well with Salesforce, and reduce potential integration issues. Meanwhile, Trailhead is one of the most fun training programs I’ve seen in the business applications space.

But, Salesforce will need to do more if it really wants to become an SMB mainstay. First, of all, Salesforce needs to improve SMB segmentation and understanding. Sure, it gets those Silicon Valley startups, but it needs a deeper understanding of the broader SMB landscape and their diverse attitudes and requirements.

This leads to my next point, which is that the broader swath of SMBs still need a lot of business and conceptual education about how and why sales, marketing and customer service are changing, and what they need to do to succeed amidst these changes. Salesforce paved the way in educating SMBs about the big picture benefits of the cloud, it should have the same lofty goals in terms of educating them about the new customer journey.

In addition, Salesforce says that there is “a clear migration path” from SalesforceIQ to Sales Cloud. While it sounds like Salesforce can easily migrate data from SalesforceIQ to Sales Cloud, the applications are built on different code bases, and have different user interfaces. So its not intuitive as to how this works in real life in terms of user learning curves. As important, what is the strategy for all of the ISVs on the AppExchange that target SMBs? They’ve integrated with Sales Cloud offerings, not with SalesforceIQ. Since Salesforce is now pitching SalesforceIQ to SMBs, what do they need to do, and how will Salesforce help them? Another question is how does Lightning—and Thunder for that matter—fit into the SMB story?

That said, as evidenced at this event, Salesforce is listening, and is formulating plans to increase investments to educate and engage SMBs both locally and online. While engaging the broad SMB market is never easy, Salesforce has the right attitude, and the brand and budget to create a wider lens through which it can gain the pulse on SMBs it needs to capture SMB attention and market share.

Note: Salesforce hosted me at Dreamforce and paid for my travel expenses. 

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My Top Posts From 2015

Posted on January 14, 2016 by lauriemccabe

new-year-images- collectionSeems like we blinked and its already 2016! I hope your New Year is off to a great start. Here are my most popular blogs from 2015.

Thank you again for reading and commenting on them. And please let me know what SMB related tech topics are of most interest to you in 2016.

SMB Group’s 2016 Top 10 SMB Technology Trends

Making The Internet of Things Real For SMBs

Are You Keeping Pace With Your SMB Customers?

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

Trends in Small Business Adoption of Mobile Solutions

Cloud Is The New Normal for SMBs—But Integration Isn’t

SMB Spotlight: Empowering A Billion Women by 2020 Teams Up With Xero

The Cloud: Mother of Re-invention for IBM

Charting a Course in the ERP Clouds

Mobile Solutions Play a Big Role in Small Businesses

Filed under: SMB, Uncategorized | Tagged: , , , , , , | 1 Comment »

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