Cloud Computing companies such as Salesforce.com and NetSuite frequently argue that is incredibly difficult, if not impossible, for traditional on premise developers to move to an on demand business model. Witness the struggles of SAP and Microsoft to migrate from their existing architectures.
How does that explain FinancialForce.com, the latest evolution of financial specialist Coda’s two year project to create a Software as a Service (SaaS) version of its popular Coda Financials on premise application? If it's near impossible for the likes of SAP to make such a move, how does Coda pull it off? The answer to that apparently lies in Coda's use of Salesforce.com's Force.com development platform.
The two-year gestation period for FinancialForce.com may not impress the Cloud purists, but the time to market will have impressed rival accounting software developers and stands in sharp contrast to the tortured birth pains of SAP’s web-based Business ByDesign ERP suite. As well as providing a secure, ready-made development platform for FinancialForce.com, the Salesforce infrastructure gives the new venture access to a variety of integration opportunities with other Force.com applications, and plugs it into new innovations such as Salesforce.com’s microbloggling initiative, Chatter.
The Coda2Go project as it was originally called was not taking the market by storm when earlier this year it suddenly transformed itself into FinancialForce.com, a on demand spin-off from Coda with Salesforce.com as a minority backer and stakeholder. As a standalone venture it won’t have to confront the problem of undermining the revenue stream of its direct sibling - the issue that blights so many on premise vendors in their move to the Cloud. Cynics would also suggest that the standalone nature of the beast also allows it to be put to rest quickly and efficiently if the venture were to fail.
But that sort of cynicism isn't going to wash with CEO Jeremy Roche who reckons that this is exactly the right time for FinancialForce.com to launch itself into themarket, especially in the US.
“The market for Cloud in general is just more advanced in the US. It's also where the market presence of Salesforce.com is greatest, although Europe is catching up,” he notes. With a compatible, accounting engine ready and waiting on the Salesforce.com platform, FinancialForce.com will appeal first and foremost to Salesforce.com customers.
If you're not a Salesforce.com customer, the application will provide “a real time accounting engine that is always in balance and always up to date”, he adds.
“It's not just a set of ledgers that are now running in the Cloud. It's specifically designed to be online and to provide up to date information that's driven through with real time analytics which you can run in as many different dimensions as you like. It provides you with workflow right across the front and back office.”
Roche is particularly enthusiastic about Salesforce.com's recent introduction of Chatter, the “Collaboration Cloud” that the firm hopes will enhance collaboration across enterprises. Roche promises that Chatter will be integrated into the FinancialForce.com environment, but prefers to refer to the concept as “collaborative accounting”.
“We have been talking about creating collaborative accounting packages for over a year,” he continues. “You can have people monitoring and running activities. You don't need to have a trigger set up to alert you when your bank account is running low for example. One of the things that seems to be compelling is the interconnection between the front and back office which means that the sales guys are not left to be seen as the odd ones out.”
Social networking has been blocked in many firms, slowing its adoption within sensitive professional markets such as financial and professional services. “The Salesforce.com approach is going on within the firewall and that's a major differentiator,” suggests Roche. “There are lots of organisations that block messaging and Twitter and so on. There are firms that are happy to run Microsoft Communicator within the firewall or take the idea of emails flying around and run the communicator alongside.
“But the thing you don't capture there is that when those conversations take place the data is transient or if it's via email then it's locked in people's emails. So what you end up with is a lot of silos of information around the organisation. With collaborative applications you are able to capture the conversation as part of the knowledge base behind the firewall. A classic example would be an accountant who's got a random invoice that's turned up and the PO hasn't been raised. How much time do people waste on that at the moment, trying to chase down the information needed? What we're doing is enabling people to select the information that is allowed out of the organisation.”
So who's buying into the FinancialForce vision? Well, one of the first up is Telegraph Media Group, a pioneering user of Cloud applications including SuccessFactors, Google Apps... and FinancialForce. “They already run all their ads and media sales though Salesforce.com,” notes Roche. “They are a very happy user of Aggresso's ERP. We as FinancialForce sit in the middle. We collect all the transactions that run through both. That's a key element of the market that is evolving. You don't have to throw out what you rely on day to day on day one. We're not proud when it comes to this. You can run our new stuff in parallel. The big opportunity for us the old legacy accounting stuff or converting old versions of Great Plains. There a lot of systems out there that people just haven't touched for years.”
But what about the concept of the Cloud itself. Isn't it a term that puts many people off or which equally many don't understand? “We are selling this as Cloud,” insists Roche. “But we are modifying the terninology for some in the accounting community. The terminology has evolved. It's gone from on demand to SaaS to Cloud. We do have to explain that to accountants because they haven't got to the question of Cloud definitions as yet, although we have reached the stage where CIOs are explaining the terminology and the concepts to other parts of the organisation.”
But isn't it better to turn to a single source vendor rather than mess around with integration? That's the mantra propounded by the likes of NetSuite CEO Zach Nelson. Roche is phlegmatic about this world view. “If that's what you want then you should talk to Zach Nelson,” he says.
“But Salesforce.com has 69,000 customers who demonstrate that are buying best of breed applications. They want good, fast, lean applications that are quick to deploy and customise. They are not buying into legacy applications that are delivered by yet another methodology. What that taught me is that we needed to build an application that is fleet of foot. It's a very different way of working from taking a one size fits all approach."
