We’re beginning to see an important differentiation, even a schism, in the enterprise software industry. It’s been building up for the last seven years and it will burst onto the scene tied in a bow this year. It’s the separation between conventional software suites and platforms and it is most vividly explained by front to back office integration but also alive and well just in the back office.
Let me digress.
In the conventional software era now heading into twilight, vendors provided more or less soup to nuts solution sets all integrated around proprietary standards, data models, middleware, and the like. It took a long time for suite vendors to get to that point, developing one application after another, delivering additional functionality to the market year after year. The process was not without its flaws and immature products occasionally got to market causing much heartburn for early adopters.
Cloud computing and subscriptions are changing all that and the most obvious change agent is Salesforce.com with its Force.com and Salesforce1 platform — Salesforce1 being the superset.
Rather than offering defined solution sets as conventional vendors have done, the Salesforce strategy has been to provide foundation technologies that include the development and maintenance tools you might expect from a solutions provider but with a twist. The tools sit on a platform that also includes some spiffy data management, workflow, collaboration, social media, and analytics tools. In short, just what you need to build robust apps these days — cloud or conventional. Moreover, any developer can make an app that harmonizes with the platform and delivers a robust solution even if it’s version one.
This foundation also gives developers two things they’ve never had. First, the ability to build apps that automatically integrate with others built to the same platform standards and, second, a way to define apps once and target-generate runtime images for a variety of operating systems.
One of the best examples of this approach is the Salesforce ecosystem and here we rejoin our previous column.
It is more or less expected that Salesforce can easily integrate with the apps in its ecosystem. So the real proof of the platform is in the ability of non-Salesforce apps built on the platform to integrate with each other.
Earlier this week in Las Vegas, Zuora, a native application on the Force.com platform, announced a deepening relationship with Intacct a financial applications provider in the Salesforce ecosystem. IntAcct is not a native Salesforce application set meaning it has its own cloud but no matter. Another attribute of the platform is its API set designed precisely to enable the kind of integration just announced.
We’re not done yet.
Zuora is one of the leading providers of specialized services that help subscription companies and subscription groups within conventional companies, to account for the sometimes squirrely (that’s a technical term) business processes needed to correctly manage customer orders, configurations, billing, payment, and finance. I can’t find an accurate number of Zuora customers but I can say they have offices in the U.S. and Europe as well as $132.5 million in venture capital. The press release says Intacct has more than 7300 customers including startups and public companies.
My point is that the platform is not some gimmick for small companies or cloud only companies or front office only companies. The cloud is for every company, everywhere. This is made abundantly clear by this announcement by two back office companies this week.
This announcement is another proof point for the platform but also a major validation for Zuora that, by this integration, is enabling Intacct customers to build and deploy hybrid business models for its customers that include conventional and subscription businesses.
This is a big deal because it adds significant subscription functionality that will enable Intacct’s users to make better decision because they’ll have more information available. And that information will not come at the cost of storing customer data in two locations and hoping to be able to synchronize everything. The two systems will operate as a single entity for those companies sponsoring hybrid business models that are in need of hybrid accounting.
Obviously, the deal gives Zuora a universe of 7300 new customers but it also gives Intacct an easy way to deliver major new functionality with no drama. That’s why I think this is a milestone event.