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Salesforce buys into Coda2go joint venture

30th Sep 2009
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Coda and took the market by surprise by announcing on Wednesday morning that Coda2Go would be spun out of Coda to become a joint venture between Coda’s owner Unit 4 Agresso and editor Stuart Lauchlan reports.

The new company is to be called – which is also now the new name for Coda2Go – and will be led Jeremy Roche, who is moving sideways from his role as CEO of Coda. CEO Marc Benioff has always been adamant that the firm would stick to its core markets of Cloud CRM and sales force automation, but has come up with funds to ensure that his developing Cloud platform will continue to have a flagship accounting appliction.
The companies did not disclose the amounts and percentages involved, but made it clear Unit 4 Agresso will retain a majority holding in the new joint venture. More details will emerge when makes its next filing with the US Securities and Exchange Commission.
Whatever the exact breakdown of holdings turns out to be, is clearly throwing its weight behind the new venture. It will provide first-line support for as well as taking what is described as “a more active role” in promoting and selling it. It's entirely in's interests for this to succeed as a validation of its ecosystem approach.
The vision for the new firm is to do for finance and accounting what has done for CRM. Coda was the first accounting specialist to support and started developing Coda2Go two years ago as a complementary offering to its Coda Financials on-premise applications.
Until very recently, Coda2Go was still being plugged as a part of the wider Coda portfolio; now it's “Coda2Gone” in its original guise. What can have changed to make both Unit 4 Agresso and reverse their clearly-defined market strategies? Is it an attempt to kick start a section of the Cloud Computing market that has been more sluggish to take off than, for example, CRM? Or was the transition to a Cloud-based business and revenue model more painful and protracted than Coda expected? 
“This sort of offering doesn't sit easily in the same sales team as other products,” Roche conceded. “I had thought we'd end up with another product to add to what we have and sell already. But this needs its own sales and marketing effort. We're actually following' terms and conditions.”
But he added: “The market has moved with us. There's a realisation that a market is emerging and developing for accounting in the Cloud. Something like 30% of CRM implementations are in the Cloud; with accounting, it's still less than 5%.”
Those sort of numbers can be read as a great opportunity in an untapped market. Or they can be read as something less encouraging: a lag in adoption by the financial applications users. According to a study by NTT Europe Online in June this year, 44% of a respondent base of CEOs and CIOs, said that they expected to invest up to 15% of their IT budgets on Cloud Computing in the next two years. But the areas of the business most likely to move to the Cloud were content management systems, sales/CRM applications, and those applications deemed “non-business critical”. Over half – 55% - of the prospective Cloud Computing adopters felt financial and accounting systems should never be put into the Cloud. 
Roche however still sees huge potential. “We believe that we have a very good product and now we're getting additional backing from and that shows [its] commitment to the product. We get to tap into the and that's something we're very respectful of,” he said. 

For more insights into the joint venture, see Stuart Lauchlan's longer piece on, Salesforce makes financial gambit with Coda2go spin-off stake.


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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
30th Sep 2009 14:38

NetSuite comment

We received the following comment on the joint venture from Craig Sullivan, VP of international products for rival Cloud ERP applicaiton developer NetSuite:

“The market has already rejected the Coda approach of offering a rudimentary on-demand accounting product with no other ERP capabilities.  Just look at the spectacular failure of the decade-long US partnership of with Intacct, and one can see the market has rejected basic accounting only applications, even when delivered from the Cloud. In fact, two years after its launch, Coda2Go has only one customer success story to point to on their website.

“However, the announcement does reveal that acknowledges the future of Cloud Computing is the integrated business suite that NetSuite pioneered, and is scrambling to cobble one together.”
John Stokdyk, Technology editor

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Dennis Howlett
By dahowlett
01st Oct 2009 15:43

Ooooo! Sour grapes anyone?

My goodness - Craig making that sort of statement - whatever next? I can only think they're worried that they need to say such things. As Stuart said a while back: 'the phoney war is over.'

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By ddruker
01st Oct 2009 20:44

Not exactly an unbiased opinion

I'm not sure where Craig gets his facts - Intacct is growing faster than NetSuite and has far higher client satisfaction than NetSuite - more than 90% of Intacct clients say they would recommend Intacct to their friends.  Just search for Intacct on the appexchange - you'll find 56 reviews from happy Intacct clients - which is in the top 6 of all 800+ products reviewed on the Appexchange. 

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