Cloud accountancy applications provider FinancialForce has made its first move into what it says will be a series of new vertical markets by unveiling a Professional Services Automation (PSA) offering based on its purchase of Appirio last December.
To signal its intent, the company has changed its corporate strapline from ‘Accounting for Salesforce’ to ‘The Cloud Applications Company’ and, over the year ahead, plans to go after vertical markets in which Salesforce.com already has a strong presence such as professional services, media and high tech. FinancialForce builds its offerings on Salesforce’s Force.com development platform and describes itself as a ‘joint undertaking’ by financial software provider Coda’s Unit4 parent and Salesforce.com - although the former holds a majority stake.
Tom Brennan, the firm’s new vice president of product marketing, explained to me the rationale behind its change of strategy:
This focus is important, he believes, because all organisations these days, whether vendors or customers, should be concentrating on their value-added applications rather than non-value add infrastructure.
As for the company’s rebadged Appirio PSA applications, the standalone version will now be known as FinancialForce Professional Services Automation, while a second release, which has been integrated with its own accountancy applications and Saleforce’s CRM offerings, is called Service Resource Planning (SRP).
To reflect the importance of the new business line, the firm set up a Professional Services Enterprise unit last month and appointed Todd Bursey, former head Appirio’s enterprise business, as its general manager. Brennan likewise joined the company last month as did Jim Carney, former vice president of financial operations at Comcast Cable Communications, as financial controller, signalling that the company is now trying to ramp up for growth.
The firm currently has 75 staff, which are split between offices at headquarters in San Mateo, California; Manchester, New Hampshire and Harrogate, England. The Harrogate office is where development is centred and it is likely to become the company’s European headquarters as it begins a consistent push into the market this year.
Nonetheless, Brennan acknowledges that the adoption of SaaS in the accountancy space has been much slower than sectors such as CRM, email and collaboration tools as it is “naturally more conservative” and has traditionally had far fewer users out in the field. But he believes this situation is changing in the wake of the recession as offices start to become virtual in a bid to cut costs and more temporary staff are hired.
Such customers tend to be start-ups or “just beyond” that use entry level systems before they obtain “funding and start generating revenues and costs and it becomes unmanageable”, he adds.
Interestingly rival NetSuite – a competitor in the finance space and a fore-runner in the PSA sector – recently conducted some research among the membership of the Institute of Management Accountants to find out where they were in the Cloud adoption cycle. In a blog on the company's website, NetSuite explains:
As an aside, NetSuite takes a dim view of FinancialForce's ambitions in the PSA market. Edward Marshall, SVP Product Strategy, NetSuite OpenAir, said:
As to the future, Brennan says that FinancialForce’s “short-term focus” over the next year will be the accounting and PSA markets, but the firm also intends to launch products targeted at up to three new verticals, although they are unlikely to warrant new divisions of their own.
