Increasing Competition in the Cloud

Sunday, August 01, 2010

Ben Kepes


Acumatica (more on them here) is something of a battler. A small ERP vendor, selling a cloud product (that is also, or can also be, an on-premise product) that’s up against big names whichever direction it goes – NetSuite from the cloud angle and SAP from the on-premise direction.

Despite the odds, Acumatica seems to be building quite a successful operation through giving users flexibility in terms of where their data is, and committing 100% to the resellers who implement their product.

An example of just how much pluck this little battler has came a few months ago when, in reaction to NetSuite’s moves to more strongly align itself with channel partners, Acumatica introduced it’s three year price guarantee.

The Acumatica price guarantee means that customers will pay the same amount in year 3 as they do in year 1 – both for the software as a service (SaaS) solution running on Microsoft Windows Azure as well as on maintenance charges for the on-premise deployment.

Acumatica isn’t pulling any punches with their campaign, CEO Ezequiel Steiner went on record saying:

We have heard from many NetSuite customers who are unhappy with price restructuring, limited deployment options, and loss of control over their ERP application, we developed this offering to help customers understand that cloud ERP does not have to be restrictive in terms of users and deployment options

In their defense, I’ve also spoken to a number of NetSuite customers who are extremely happy with their experience with NetSuite. Similarly I’ve spoken to NetSuite resellers who are having great success from heir relationship.

I wanted to speak with some VARs who are putting Acumatica’s promise to the test.

I spent some time talking with Gabriel Michaud, VP of software development and co-owner of Les services SIPD, an Acumatica reseller in Quebec. SIPD are a reseller with an extensive history implementing ERP systems from various vendors. Customer demand encouraged them to investigate cloud solutions.

Michaud relates that they looked at both NetSuite and Acumatica, but chose Acumatica given uncertainty of NetSuite dual strategy of using channel partners and selling directly. Interestingly Michaud agreed with my assertion that the future for VARs in a cloudy world is in selling customized solutions, in effect becoming software developers s much s implementers.

In fact Michaud estimates that 75% of revenue for SIPD will come from selling their customized solutions. To his end SIPD have invested six month development to create two specific customizations for Acumatica, first a full French language version, and secondly an EDI module for the product.

I questioned Michaud about their future intentions with the customized products, specifically the French version. I suggested that there was the opportunity for them to become vendors in their own rights selling the solution to other French speaking locations.

Michaud agreed saying hat they saw real potential in this – it’s another example of how smart customizations, rolled out to a larger target market, can more than replace and revenue lost under a tighter cloud reseller model.

The positive vibes of this particular Acumatica reseller were echoed by Robin Saacks, CEO of TimAc Solutions, another Acumatica VAR. TimAc comes from a background selling Sage, Microsoft Dynamics and QuickBooks Enterprise solutions but was have a lot of demand for a cloud product from its customers. Saacks was very bullish on Acumatica but sounded a note of caution for traditional resellers moving to cloud products:

Companies don’t have to spend as much [with cloud products] as they did before. Channel partners need to show new value

imageSo there you have it. The little battler is gaining some momentum from its channel partners. Of course good vibes are nothing without customers. Unfortunately Acumatica isn’t particularly forthcoming in this regards, when asked for customer counts they advised that their policy remains not to disclose revenue numbers. I questioned further on their channel success and they reported that:
Acumatica has more than 50 channel partners and continues to drive global expansion — from the U.S. and Canada to markets such as India, Indonesia, Thailand, Hong Kong, Vietnam, China, Russia, and Latin America.  In particular, we continue to ramp up our French language offering in an effort to capture other French-speaking regions
Time will tell how well this goes for Acumatica. Cross-posted from Diversity
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