Cloudy in Salt Lake - ITA Fall Collaborative

Cloudy in Salt Lake City

Intacct is a proud member of the Information Technology Alliance - the ITA - an independent, membership association of leading mid-market focused technology professionals, consultants, and product/service providers in North America. Perhaps 200 CEOs and senior executives attend bi-annual ITA meetings to talk about strategy, share best practices and network. Three of us from Intacct and 30 or so of our partners attended.

This group has traditionally aligned with on premises software like Microsoft Dynamics, Sage, Deltek, SAP and CCH - and most of those vendors continue to be sponsors of ITA.  What was remarkable about the Salt Lake City ITA meeting was its focus on cloud computing adoption - just about half of the tracks were explicitly focused on cloud computing - and these sessions were vastly better attended than the others.

The message I took away was that the mid-market channel has moved from skepticism of the cloud two years ago, to cautious interest last year, to real urgency this year.

Some of the highlights:

• Successfactors highlighting the differences between multi-tenant native cloud applications and what they call "fake cloud" cloud hosted on-premises software - and the significant negative impacts on cost and quality that end-customers experience with hosted.. Many of the resellers and consultants in the room had been hearing for the last year from their traditional software publishers that hosting is the same as cloud computing so this was a real eye opener.
• The panel of the channel execs from SAP, NetSuite and Intacct. I thought all three guys did great, though SAP definitely introduced confusion about how hard / expensive cloud products are to customize and implement. SAPs position was that implementation was expected to cost five times the first year subscription cost, and that it was important that the resellers find clients that are willing to adapt their business to the software rather than the other way around.  NetSuite and Intacct both said implementation runs one to two times first year subscription price, and customization to meet customer needs was the whole point.
• The panel of three SAP, NetSuite and Intacct partners. It turned out the SAP partner had just signed up and had not actually sold or implemented Business by Design yet.  Why SAP chose them I do not know - perhaps they do not have any partners that have sold anything yet?  Then the NetSuite partner who was quite technical talked about how NetSuite's 150 sales people take the "easy deals" direct themselves - so he has learned to focus on the hard and messy deals to avoid channel conflict.
• My long and animated conversation with the CEO of one of the largest Sage resellers, who really just didn't want to fathom that the TCO comparison between cloud and on-premises software is the annual cloud subscription compared to the total annual amount the client pays to purchase, operate and maintain software. He was adamant that he just wanted to compare the annual cloud subscription with the one time purchase price the client pays to him for the software. It was a bit like there were blinders on around what it really costs a CFO to operate their financial system in terms of hardware, software personal, infrastructure and operations costs.
• Speaking with the CIOs and MDs of national CPA firms that are in the process of moving tens of thousands of their clients to Intacct and cloud computing. The CIOs have fantastic horror stories about compliance issues from the gyrations their offices go through to get remote access to their clients. (Like using Microsoft Remote Desktop to take over a client's PC to run reports from QuickBooks on the CFO's laptop.) 
• The stories from the Intacct partners at the meeting.  One who talked about a million dollar per year opportunity for a 1000+ entity organization he expects to close (and will receive a $300k per year annuity when he does) that he would have had no way to compete for prior to working with Intacct (and bids from his on-premises competitors are coming in closer to $5mm per year.) Another who carries both Intacct and Microsoft is bidding Intacct for a prospect "because it is way better for this customer" and is competing against another Microsoft VAR in the deal. Imagine the discussion "I carry Great Plains too, but for you it's clear Intacct is better."  It's also better for the VAR - since they don't have to compete with another VAR of the same product on price. 

I could go on and on but you get the idea. I am more confident than ever that 2011 will be the year the channel begins to adopt cloud computing in numbers and will have a ton of success.