The Blog

  • February 19, 2014
  • Back Office Perks Up

    cloud-computing-2What’s going on in the back office?

    That normally staid bastion of conventional computing is perking up taking on subscriptions and cloud computing like candy.  It used to be that when you thought about back office and cloud in the same thought you also thought about NetSuite.  Truthfully you still do, they’ve been at it a long time and have produced a solid and well articulated suite of back office ERP, finance, and accounting software (and more) that runs a lot of companies, especially the international variety that keep books in multiple languages and currencies.

    But over the last ten days other companies have announced partnerships and solutions that both challenge NetSuite’s position and point to an important new era in computing.

    The new era has been percolating through all of this century.  Ever since Salesforce starting selling “no software,” cloud computing and subscriptions have been stealing a march on conventional, expensive, and bloated on premise software.  Each year these solutions became more powerful and ubiquitous.  First they supported other subscription companies, then all sorts of companies, and now, with the advent of the platform, cloud computing has come to the development suite and the back office.

    The back office!  Ten years ago the mantra was “Not with my data!” but something happened.  Certifications sprouted and cloud became normal and safe and with Salesforce’s leadership, kind of cool.  On the back office side, NetSuite carried a similar message to the point that today cloud and accounting are no longer words that, when spoken together, sufficient to punch your ticket to a long rest in a rubber room.

    The last week has seen a breakout of sorts for subscriptions, cloud, accounting, ERP, and platform computing.  Zuora and Intacct announced a widening partnership that will deliver Zuora’s subscription billing, payments, accounting, and financial management solutions to Intacct’s 7300+ cloud accounting customers.  Be aware that cloud and subscription are not the same.  Intacct has been successfully delivering cloud based accounting services and giving NetSuite its fair share of competition for many years.

    The addition of subscription power from Zuora raises the bar to enable Intacct’s conventional customers with subscription aspirations to support what can best be called hybrid business models.  At the same time, the announcement also shines a light on Salesforce’s platform strategy.  Zuora is a native application on Force.com and Intacct has developed powerful integration with the platform in general and the joint announcement says they’ll double down on that integration.  For Zuora it means 7300 new prospects, for Intacct it means a major capability upgrade without breaking a sweat.  But we’re not done.

    Also today, FinancialForce, a native accounting system on the Force.com platform just announced their entry into the ERP market with FinancialForce ERP.  As a native application on the Force.com platform, FinancialForce has completed the circle of front to back office solutions that began with Salesforce.  With all of the available solutions, a company of any size or complexity can now support all of its enterprise IT in the cloud and via subscriptions.

    I think the biggest news in all this is what will happen to conventional IT in the years ahead.  Pessimists say that IT will wither as significant chunks of functionality decamp for the cloud but I disagree.  IT has always been a major component of a company’s secret sauce.  If garden-variety accounting systems, even those that support subscriptions, can be off-loaded to the cloud that’s fine.

    As more enterprise solutions head for the clouds and budget ratios turn from capital expenses to operational, we should see a renaissance of in-house application development which will, importantly, drive new business processes, especially in mobile apps that will help users do more and better business and do it faster.  That’s where the secret sauce is and will remain for the foreseeable future.  Time to embrace it.

    These foundational changes come at an opportune time as prognosticators think about what it will mean to have 50 billion devices hanging off the Internet in 2020.  Devices will increasingly be non-human consumers of goods and services (especially for restocking) and producers of data and information.  Their transactions will take fractions of a second, be automatic, and require the attention of the infrastructure we are building now with cloud and subscriptions.

    So the significance of these announcements together with things that have been coming out in the last year all point to an important milestone.  Conventional applications managed data but the new stuff with platforms, front and back office integration, workflow, and social media all point to building and managing better business processes.  I think we’re close to the end of a long wave of technology invention and at the beginning of an era of its consolidation and application.

    Published: 4 years ago


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