In these strained economic times with businesses retrenching and pulling back on non-essential projects, one could have expected to see the reported numbers for software companies also trend downwards. Right? Well not if a couple of recent results from SaaS accounting firms are anything to go by.
Firstly Intacct, a company I’ve written about previously and one I am picking for a significant funding event sometime in the near future. It raised a further $12M funding round a couple of months ago, but I expect that potential acquisitors are sniffing… Anyway in Intaccts latest results, they boast of some pretty impressive numbers
- Q4 – 193% year-on-year growth for new bookings
- FY 106% growth in new bookings
- Intacct channel partners enjoyed 40% growth between Q3 and Q4
It’s not just financial performance that Intacct is crowing about though – they’ve always been quick to talk about uptime and other measures. This report sees;
- 100% availability for this quarter
- 99.995% availability for the entire fiscal year
Intacct occupied a relatively unique space. At the top end of town there are a number of players jostling for position – NetSuite, SAP and others. At the lower end of town there are a plethora of SMB accounting products – both for the incumbents like Sage, MYOB and Intuit, and also the new entrants – Xero, FreeAgent, IAC-EZ. In the middle space however there is a distinct lack of solutions that are suitable for the “bigger than small, but smaller than big” set. Intacct fits this space nicely and the opportunity for them is massive.
In other results released, NetSuite CEO Zach Nelson, in his inimitably charming way, was ebullient when announcing their Q2 results. The previously covered customer wins at Groupon and Qualcomm were brought out again to justify the contention that NetSuite not only provides a robust alternative for some of the biggest businesses around, but does so in a way that is far more agile than traditional alternatives. In terms of financial results, NetSuite reported;
- Record revenue of $57.8M – up 23% YoY
- 30% increase in billings YoY
- Q2 operating cashflows of $8.4M
NetSuite still reported an overall lose, in fact that loss has widened on last year (from $7.2M to $9.8M). While being a fan of profit-making ventures, given the growth potential for NetSuite, this isn’t a signficianct concern. NetSuite too has some non-financial measures that are perhaps even more indicative of where their trajectory is heading;
- An additional 328 customers were signed, the highest number for a couple of years
- Channel contributions to the revenue figures grew 50% versus last Q2 last year
- Global pipeline in the “big deal” category is up 85%
- Average deal size rose to $40K
- A record multi year deal to expand its footprint within tier two subsidiaries in a 45000 person business
It is this last category of statistics that gives a sense of the future trajectory for NetSuite, with a channel strategy that is absolutely turning on the gas, with customer signings on the up, with a pipeline that is bigger than ever before and with deal size rising ever higher, it is obvious that NetSuite’s own graph is trending upwards – that’s exciting as it builds an impressive base for post-downturn acceleration that could see NetSuite really hit it out of the park on its way to being a major player.
What it Means
Cloud rives agility, drives relative cost savings and drives the efficiency of the businesses that utilize it. The performance of both Intacct and NetSuite in relatively constrained times is testimony that the marketplace buys that vision and is showing so with their checkbooks. That trend will continue, and will only accelerate as these vendors gain even more traction. If you’re a channel partner or implementer living in the old world, while I’d not suggest that your world will end any time soon, it’s safe to say that it’s looking less rosy than a few years ago.