I had a briefing last week with Intacct. I spoke with Dan Druker, SVP of Marketing and Business Development and Peter Olson, Senior Manager, Corporate Communications and they gave me a run down both of their current thinking around go-to-market strategies and also their developments for the next quarter.
Intacct is pretty comfortable with the space it occupies in the mid-market for SaaS accounting. With over 3000 existing customers worldwide, a USD40 billion market for accounting software and sales growth per annum in the high double-figures, Intacct is well placed to capitalise on two distinct customer groups – as the following diagrams point out;
Intacct sees themselves benefiting from both SMBs outgrowing the traditional accounting applications, but also from larger businesses struggling with the huge ongoing costs, and tortuous constraints of traditional big box software. Intacct is proud of the fact that in the case of a number of substitutions they’ve done of late, their product is cheaper than just the maintenance part of the incumbent products.
Reducing costs
On the small business side of things, Intacct has taken advantage of the sales scale that relying on channel partners brings and has halved their lowest level subscriptions down to USD4800/year and their channel partners are offering automated fixed price conversion deals at under USD2000. One can’t help but think that this price reduction is also a response to challenging economic times and more competitors in the space – while still an impressive high double digit number, sales growth has backed off since previous quarters).
Interestingly enough, along with the usual upwards movers (converting customers from QuickBooks for example), Intacct is seeing customer migrations from other "big ticket" players – Netsuite etc.
Channel strategy
Interestingly well over half of new sales happen through channel partners. These partners provide both on-selling and services to Intacct customers. Another angle that Intacct is chasing is allowing resellers to customise, re-badge and on-sell Intacct – it’s a smart verticalisation play that allows for resellers with distinct domain knowledge (the real estate industry, or lawyers for example) to provide a tightly customised product for that vertical.
Building an ecosystem
and they’re also leveraging what they call the Intacct Max program which is an attempt to do much of the heavy lifting of integration for customers. Intacct are partnering with other SaaS players, in some case developing integrations themselves and in some cases relying on third parties to develop the integrations. The net result is a system that should allow the flexibility and customisation that individual apps brings, with the ease of use of a best of breed of breed suite.
It also helps leverage other vendors customers, Intacct reports its customers have a 60% attach rate with salesforce – proof that synergies are valuable for SaaS vendors.
Uptime success
Last quarter Intacct achieved 100% uptime – there’s not much better a SaaS vendor can do than that! Their SLA guarantees 99.98% uptime, less than the vaunted “six nines” but still allowing a mere ten minutes or so of downtime a month before the SLA kicks in.
Success measures
The best thing about SaaS is that client satisfaction is very closely tied to revenue – it’s easy for a disgruntled customer to go elsewhere. Intacct uses two metrics to assess how they’re doing. The first is a success rate, literally which customers who sign on end up paying for the product at the end of the integration process – the following graph gives some comparisons, Intacct is tracking around 98%, it would be very interesting to compare other SaaS vendors to this figure.
The second metric is customer satisfaction. Intacct customers are asked a yes/no question whether they would recommend Intacct to others – again Intacct is doing well here – up at the 93%. Yet again it would be interesting to benchmark the other SaaS players to this figure.
Overall
High double digit growth, along with high customer satisfaction is positive at any time. In dire economic times like now it is fantastic. The future looks promisign for Intaact as they leverage their somewhat unique position in the marketplace.
