Danish accounting SaaS provider e-conomic bucked talk of recession by reporting a 60% increase in turnover to £3.8m in 2008.
Having expanded from its base in Scandinavia to the UK last year, the company is now lining up localised service nodes in two new European countries, CEO Torben Rasmussen told BusinessCloud9.com.
The company will need to expand its footprint rapidly to meet an ambitious target to support 100,000 customers within three years - a fivefold increase. Germany is likely to be the next territory for expansion.
“Traditionally, the biggest countries Danish companies have dealt with are Germany, Sweden, Norway, the UK, and the USA; that’s the top five,” said Rasmussen. “On some of the key performance factors like broadband penetration, a willingness to use credit cards for transactions, and so on, Germany is looking the right way.” France, Italy and Spain are in the frame for local launches this year, but e-conomic has not made up its mind where to turn next.
The developer is also looking to expand in another way this year, through partnerships with other software as a service providers. The Danish company remains focused on delivering a solid accounting Cloud solution for the SME sector but is looking to grow a wider eco-system with partnerships with CRM and payroll SaaS providers. Integration with Microsoft Dynamics CRM and Superoffice are already lined up.
“There are a lot of very good dominant CRM players out there that only do CRM, like Salesforce.com, Superoffice, and Microsoft," Rasmussen said. "They don’t want to do accounting solutions for the small and mid-sized segment, but they’d love to sell them CRM. So we’re building a bridge between applications, and we’re going to do the same with Superoffice and a bunch of other CRM players.”
e-conomic’s modular approach to cross-sector SaaS solutions is supported by open application programming interfaces (APIs) that simplify integration.
Rasmussen explained: “Forming partnerships is an extremely important part of our growth, and you can imagine having a partnership with Microsoft is really going to create some noise. We like to say that we’re part of an eco-system.”
The Danish company is self-financing, which has enabled it to grow organically and avoid the worst effects of the global credit crisis. Rasmussen explained: “We are one of the few self-financed players in the market right now. [It means] I don’t have to go to the bank; I don’t have to go and explain my numbers at a stock exchange; I don’t have to go to venture capitalists for more money. We’re taking it step-by-step.
“Maybe in 2010 the market will change again, and we’ll have to look towards Eastern Europe or the US.” Although it has customers across over 60 countries, fully localised expansion across the Atlantic is no doubt a long-term goal for e-conomic, along with Australia. The product already supports 160 currencies, with Zimbabwe’s hyper-inflationary dollar one of the few currently not supported - mainly because the software can't cope with that many zeros.
The company's expansion plans could be accelerated by seeking external finance, but Rasmussen is circumspect about this route for the time beaing. “We don’t have a business plan for an [initial public offering] in 2011/2012. I like to think that a year in the internet world is like a dog year, it’s like seven years in the traditional world. [In that way] 2011/2012 is 14 years ahead of us; I don’t know what’s going to happen. Right now, there’s a great opportunity to grow the company in the given market space.”
Tempting more accountants onto the cloud is another mission Rasmussen faces. Somewhat diplomatically, the e-conomic CEO is trying to unite his rivals (he prefers the term “partners”) into working together in a bid to show SaaS works: “We have to show the rest of the world that you can do online accounting, that you don’t have to buy a CD-ROM and install something. It’s a matter of explaining to the rest of the world that this will actually work, and then they can be free to choose.” For Rasmussen, his true rivals are the traditional vendors like Sage.
With its remit to deliver a strong and solid accounting SaaS experience, e-conomic does not plan to move up market into enterprise solutions. Explaining that since 95% of the business population has fewer than 20 employees, Rasmussen is content to aim for supremacy in the SME market: “We don’t want to try and be enterprise resource planning and compete with the likes of SAP. We are staying very focused with our mission.”
Jon Wilcox