The world of the cloud channel is an interesting one – I recently published a whitepaper specifically looking at ways that partners can prosper in a cloudy world where revenue streams are significantly different than in an on-premise world.What we’ve seen from successful cloud channel partners like Appirio and GlobalOne is a strategy that sees them take a clutch of different yet complementary cloud products and go to market with a value added portfolio of products. In the case of Appirio this has meant a strategy of selling products from salesforce, workday and others rather than relying on one vendor.
This approach is well followed in the cloud space but is less common in the accounting space where practitioners tend to commit to one vendor’s product and push that product or offering ad infinitum. News today from accounting and advisory Baker Tilly that they are bucking this trend and will be delivering Financial Force’s professional services automation (PSA) solution. Baker Tilly is a 1400 staff strong accounting and consulting services provider. It was already a partner of NetSuite and I spoke with Jeremy Roche, CEO of FinancialForce and Ethan Bach, Principal at Baker Tilly to get some color about the tie up and the growing maturity of the FinancialForce product sweet. According to Baker Tilly, the deal will focus on;
[Professional Service Organizations]PSOs using Salesforce CRM (around 50 percent of the market) in North America. FinancialForce PSA systems experts will work alongside Baker Tilly’s management consultants to help services organizations maximize profitability and deliver larger projects with exceptional business results.
Roche told me that the PSA part of the business, over the year or so since the company acquired it from Appirio, has grown to cover around 50% of their business. Roche explained that while the financial product has a higher number of deals, PSA is a broader product and the higher average seat count per customer results in it being a disproportionately large part of the business. The fact that PSA, after only a year, has grown to be 50% of the business begs the question as to whether in fact the FinancialForce title is correct, I suggested that indeed FinancialForce will come to be more about line of business (LOB) applications in time rather than financial-centric per se. Roche agreed with my contention, remarking that the company will look to add more LOB offerings at theat the strategy they are following is one similar to that taken by salesforce, to create a core offering but expand significantly around the edges with additional LOB offerings. Roche commented that salesforce is no longer an overly apt title to describe what salesforce actually does, so too will FinancialForce continue to be about far more than just financials.
I quizzed Roche about where the FF sales come from – whether they were financial first and expanding to PSA, or vice versa. According to Roche there really is an even split between companies looking for a financial product and moving into PSA over tie, those adopting PSA and moving towards financials and the sweet spot, companies looking to deploy both financials and PSA at the same time.
I raised the obvious conflict with Baker Tilly partnering with both FinancialForce and NetSuite. Roche was adamant that the teams that consult for the two products are separate, and that at a higher level Baker Tilly has the ability to understand the needs of the customer and recommend the product best suited to their particular requirements. Bach also responded to my assertion by saying;
Baker Tilly, like the best consultancies, is customer-driven. We will obviously support our clients in whatever PSA direction they choose be that NetSuite,salesforce.com or other solution. Currently we have relationships with salesforce.com, NetSuite and several other cloud technology providers. We will, as a matter of course, work with clients to assess the correct solution they require and work appropriately. We advise clients of our technology relationships.
Back also gave some clarity around Baker Tilly’s approach to software evaluation projects. As he said;
There could be several situations where we would advise a professional services firm. They could ask for assistance on growth strategy, risk mitigation, software evaluation, software implementation, business strategy or dozens of other solutions. When needed, we would be delighted to work with a client on a FinancialForce.com implementation. Likewise, should a NetSuite user request our assistance on their OpenAir implementation, we would pursue this, too. Currently, we do not engage in many software evaluation projects and this is not a focus area for our practice. These projects are not very economic and are, thankfully, rarely requested by our clients. Mostly, this is due to our client’s ability to do these projects on their own. As a result, we do not see that many opportunities for a channel partner conflict to occur.
Should a PSA software evaluation project occur, we would endeavor to staff the project with people who are functional subject matter experts first. We may have part-time advisors attached to the project that know specific products. But, no matter how the project is staffed, the decision will be the client’s not ours. Our motto says it all: candor, insight, results…. That’s how we’ll work with clients.”
I suggested that in this race for oxygen, this partnership was more of a validation that FinancialForce has come of age than anything of real substance in the marketplace. It’s more of a “FinancialForce is a credible player now and worthy of our anointing” from Baker Tilly’s perspective. Either way, it cannot be denied that this is a vote of confidence for a growing FinancialForce, a company that is actively hiring and recently moved from San Mateo up to San Francisco in a bid to attract top talent. While the partial ownership by salesforce is a little confusing – the credibility it brings seems to be doing great things for FinancialForce’s business.