September 30, 2009
There is some poetic irony in the news today as the originator of the SaaS acronym, salesforce.com, announces an investment in one of the copybook examples of moving from on-premises to SaaS, Coda2go. (More on Coda here). Here we see a marriage between salesforce – the king of the on-demand world, and Coda, a traditional vendor with a 30 year pedigree that has successfully switched to SaaS – it’s a meeting of two worlds – both in terms of technology, but also geographically – Coda is owned by Dutch company Unit 4 Agresso while salesforce is firmly entrenched stateside.
While financial details aren’t being released, the deal is structured around a new entity, FinancialForce.com which is majority owned by Unit4Agresso. The Coda2go brand is being replaced by FinancialForce, a hat tip to force.com and a name indicative of the seriousness with which salesforce is approaching this deal. Unit4Agresso would not divulge either ownership stake or investment terms for this deal.
This is exciting on so many levels. Salesforce have grown to a point where they are dominant in the on demand CRM space. They’ve also branched out and created force.com, a platform for the development of on-demand offerings. For quite some time commentators have been questioning the lack of a financial product from salesforce. While CRM is a massive market segment, arguably financials are the “lowest common denominator” and a company wanting to be dominant in the on-demand business software space really needs to offer a financial product.
I spoke with FinancialForce Chief Executive Jeremy Roche, still chipper despite it being 2am in his time zone. I asked him what the deal meant in terms of scaling for FinancialForce. He advised me that front line support for the product is being rolled over to salesforce, freeing up FinancialForce to concentrate on building out their go to market approach and providing a single point of call for customers of both the CRM and financial products. In fact he told me the majority of the investment was targeted at scaling the go-to market rather than product development per se. FinancialForce/Coda2Go do not divulge numbers or financials at this stage, but they did tell me they’ve got customers in eight countries across three continents.
Current pricing for FinancialForce is $125 per user per month – it would make sense going forward to see some benefits in terms of cost for users of both salesforce and FinancialForce.
Either way this is exciting news – SaaS has been making small but significant inroads into the micro-small end of the market. It’s applications like FinancialForce that will do the same for the slightly larger end of town.