Host Analytics a Cloud-based CPM vendor has replaced its CEO Jon Kondo and appointed Dave Kellogg as its new Chief Executive Officer in his place. Kondo, who has been with the company just four years “will move on to new opportunities”. Although Host Analytics says it grew customers by 25 percent in the first half of 2102 (it now says it has around 300 customers) the Cloud-based CPM market is fiercely competitive. Kellogg will face significant challenges as he attempts to expand the company’s operations.
Competition from established vendors such as Oracle, SAP and IBM is intense. When Kondo met with FSN back in May this year he explained that “the largest vendors will often bundle their performance management offerings with other solutions to make their initial package attractive.” He also noted that shifting established SAP and Oracle shops to a third party vendor is quite difficult even though, in his view, it may end up costing those customers more in the end through higher implementation and consultancy costs.
The difficulty for Cloud vendors in general is that their business model is predicated on more limited headcount and direct customer involvement. But Cloud vendors trying to sell complex CPM solutions to larger enterprises face the dilemma that they need more ‘face-time’ with customers than they may have bargained for.
The other issue that Host Analytics may face is whether it can convince the market that it has sufficient strength in financial and statutory consolidation to match the consolidation capabilities of established products such as Oracle Hyperion HFM, Tagetik, IBM Cognos Controller and SAP BPC. Back in May, Kondo conceded that Host Analytics will need to invest more in this area if it is to compete head on in the statutory consolidation space. But management and statutory consolidations are the cornerstone of CPM because they provide the actual performance against which budgets, forecasts and plans are compared. A perceived weakness in statutory consolidation may hold back Host Analytic’s growth ambitions outside of the USA, especially in Europe, where consolidations tend to be much more complex.
The other unknown is when the large CPM vendors themselves will start to aggressively push CPM solutions in the Cloud.
Although Host Analytics has been growing successfully and invested in product innovation such as, Business Intelligence, dynamic financial reporting, a new user interface and more “Connector Packs” for integration with ERP systems, its latest press releases are noticeably silent on its annual revenue and profit. As the company embarks on its next stage of growth under Kellogg’s stewardship, FSN’s managing editor, Gary Simon, says, "The challenge for Host Analytics after 4 years is to demonstrate that it is a real alternative to SAP, Oracle and IBM in group consolidation and that it can sustain its position well into the future with a track record of profitable growth. Nevertheless, to my knowledge, it remains the only full service unified CPM solution built specifically for the Cloud and is therefore strongly positioned to take market share if it can get this right. Strenthening the management team and opening up in the UK is a step in the right direction"