Of course spinning up an infrastructure offering is one thing, having products and services to run on it is another – and this is where my accounting/ERP interest dovetails nicely with our cloud computing focus.
Acumatica is a privately funded company that recently took some funding from a Cisco backed investment firm for its ERP product. Some four years in the creating, Acumatica is a mid-level ERP built entirely in .NET, making it an ideal candidate to be used as a showcase for Azure.
Until now Acumatica had been available as either an on-premise or hosted application, with the launch today of Azure, it’ll now also be offered as a full cloud application.
I spoke with Doug Johnson, VP of Marketing and Business Development for Acumatica about both their go-to-market approach and their reasons for moving to Azure.
Acumatica is an interesting play – of late we’ve seen significant coverage of the demand from businesses for “private cloud” offerings and internally hosted SaaS apps – Acumatica is banking on their ability to provide offerings across the continuum, from installed, to hosted to full cloud as being a real selling point into the market. Clearly in going for the mid market businesses, Acumatica is going up against Netsuite. Johnson was pretty bullish about the value they add, commenting about the high cost Netsuite faces in scaling out it’s offering given their self provisioned infrastructure. He believes building on the Azure cloud platform will give Acumatica economies of scale that Netsuite will not be able to match.
Acumatica has a pricing strategy that isn’t based on users – their strategy is to take an on-premise license cost plus annual maintenance fee and charge 67% of that as an all-inclusive SaaS offering – Acumatica is therefore a $1000/month offering for a departmental situation with three entities and 1Gb of storage – this price does not change with the number of users a business has.
Johnson was also pretty critical of the double strategy Netsuite is playing by utilizing both direct and VAR channels. Acumatica in contrast is going down a pure VAR channel and is adamant that those who say the channel partner model is dead are wrong – he admitted that the VAR channel makes for a much slower growth trajectory (Johnson admitted to having “very few” paying customers at this stage) but he believes it’s a strategy that builds long term viability.
Interestingly software upgrades are only applied at the request and consent of customers – this has some impacts in terms of multi tenancy. I questioned Acumatica who responded that;
The Windows Azure platform fabric is multi-tenant. The Acumatica application can be run in single-tenant or multi-tenant mode. With our SaaS solution, each Acumatica customer gets their own computing “instance”. This is a good thing because it provides complete customization and data isolation. These things are critical to our target market.
We do have the option to run multiple-tenants in a single instance, however, the best use of this is for multi-national companies and companies with multiple subsidiaries.
I’ll leave it to the purists to comment on that particular contention!
A few interesting things I noticed about the product;
- Unusually, Acumatica will support versioning for the ERP (once it’s available on Azure)
- Acumatica are providing options for both migrating from on-premises to SaaS AND reverse migrating from the SaaS product back to on-premises
- Data is being replicated three times in different fault locations
- Support and customization only available via VARs, and for a fee
- VARs are being offered a 35% margin
- There is a 12 month subscription minimum
SO there you have it… Azure exists, products are built on it and only time will tell where it all leads…