FSN Market Roundup 2010

20th December 2010

FSN managing editor, Gary Simon, gives a roundup of this year’s main developments and companies to watch.

2010 has been surprisingly buoyant characterised by continuing product innovation and strategies. The big trends this year have been the shift towards the Microsoft technology stack, the growing interest in cloud based computing and, from a regulatory point of view, the introduction of IFRS for SMEs and mandatory iXBRL in the UK.

The shift to Microsoft

Microsoft technologies have always been very significant in the mid-market but this year seemed to mark a turning point.  Vendors who had traditionally supported and developed a variety of database platforms such as Oracle and IBM DB2 threw in their towel with Microsoft.  The persuading factor seems to have been a big push on Microsoft’s part to promote SharePoint and collaborative technologies when the market was at its most receptive.  Weighed down by a difficult economy most organisations were seeking to leverage their existing investment in technology wherever feasible and to improve employee productivity by sharing information across functional boundaries and adopting workflow management.

Since very many organisations, especially in the mid-market, already had SharePoint installed it was a relatively simple matter to convince suppliers still sitting on the fence that it was in everyone’s interests to adopt the Microsoft stack.  Microsoft benefitted from greater market penetration with business applications based on their SharePoint technology, customers benefitted from improved processes and suppliers could simplify product roadmaps and concentrate their research and development on one platform.

The trend has affected all of the markets that FSN covers. Tagetik declared its hand in the performance management space with Tagetik 3.0.  Infor, the ERP provider which has around 70,000 customers in the mid-market nailed its colours to the Microsoft Mast in October and Mamut, with approximately 400,000 users in the SME accounting arena declared it was one of only six vendors globally to sign up with Microsoft 365.

Cloud based computing

There has been enormous hype – too much hype – around the growth of Cloud computing with some analysts and media channels indiscriminately pushing cloud based computing without properly weighing up the benefits and risks.  There is no doubt that cloud computing brings significant advantages for end users, especially early stage businesses that are not over-burdened by legacy systems.  There are also many niche applications that lend themselves very well to cloud based implementations across a distributed workforce.  CRM, Time and Expense Management, Office productivity applications are good examples of potential quick wins. 

Accounting applications for business start-ups are also attractive.  A combination of low cost, negligible infrastructure and little need for specialist skills has opened up the market to new users who would not otherwise countenance on-premise packaged solutions.

But we are now approaching a crunch point. Will mid-sized to large organisations embrace cloud based ERP, business intelligence and performance management applications? How will the market deal with the integration issues when some applications are on-premise and others are in the cloud? When will the market settle on an accepted licensing model?

The answers are not clear-cut and cloud vendors appear sheepish about declaring the size of the organisations that they are able to attract but there is a sense that the tide is turning and that the initial obstacles to adoption are beginning to disappear – especially with the entry of more mature and reputable suppliers that have previously stood on the side lines.

The presence of CODA, (via FinancialForce.com) together with SAP and Mamut all playing in the accounting space adds credibility to the market.  Similarly the entry of Anaplan, backed by Guy Haddleton (of Adaytum fame) together with strongly backed teams from Adaptive Planning and hostanalytics has started to make an impression on the market for performance management solutions, encouraging new competitors such as FinancialDriver to enter the fray. We will have more to say about FinancialDriver, (which is tackling the SME market) in the new year when we plan to review their offering. Definitely worth keeping an eye on.

Financial Reporting and compliance

The focus of financial reporting for the last year has been firmly on the ‘Last Mile’ i.e. the period from the production of the group consolidated results in a consolidation system through to the publication of results in a variety of documents, either internally or externally. Competition has become fierce with Oracle announcing its Oracle Disclosure Management in April, followed by Tagetik announcing its offering in September.  Both developments were overshadowed a little by the surprise announcement that IBM had acquired Clarity Systems – the long standing leader in disclosure management that had brought its product to market some two years earlier.

But the battle isn’t over yet. SAP has just announced (see this week's news item) that it is to acquire disclosure management solutions from Cundus AG – so watch this space.

As predicted last year, niche vendors are doing particularly well.  Runbook, with its focus on process automation in financial reporting seems to be in the ascendency and so does Trintech which has notable strength in financial close management, controls and compliance together with reconciliation capability.

XBRL and iXBRL

Digital reporting has been one of the year’s biggest issues as regulators around the world ramp up their allegiance to XBRL.  In the UK there appear to be well founded fears that businesses have not taken fully on board the implications of iXBRL compliance and are ill-prepared for the mandatory filing regime that swings into action early next year.  The software industry response has been patchy with some vendors enthusiastically embracing the technology and others undecided about the approach to take. One way or another users will find a way to file their returns but it will be some time before a preferred long term solution emerges.

Re-sellers

Re-sellers of software, especially in the mid-market are sometimes overshadowed by the large multinational software houses that they serve.  But two that stand out in FSN's coverage are Sapphire Systems and Cambridge Online Systems.  The former is one of the leading dealers for SAP and Infor in the mid-market and this year has helped bring ‘Source to Pay’ to the midmarket with an exciting  product called Web3. 

Cambridge Online Systems is a very professional Microsoft Dynamics re-seller with a long track record of selling successfully to the mid-market and which has developed the capability to serve pan-European customers. Take a look at their new website.

FSN watch list

So who are the companies to watch in 2011.  Here is our list and why – in no particular order!

Infor – new Microsoft strategy coupled with new CEO.  FSN is expecting great things from this company which has now really got its act together.

Tagetik – energetic, innovative, rapidly growing company – always exciting to watch and with great new products in financial reporting and disclosure management.

Oracle – very professional, serious competition across the board with a compelling technology stack and formidable applications in all areas. You simply can't ignore them.

IBM – recently made some exciting moves in the performance management space, e.g. acquisition of Clarity Systems.  What will they do next?

SAP – making deep inroads into the midmarket with ERP solutions, Business Intelligence and performance management. Just acquired Cundus AG.  Worthy competitor across the whole ERP, BI and EPM space

Runbook – Interesting niche infinancial process automation but will they break out of their SAP user base?

Thomson Reuters – unusual group – making a big play in the group reporting, tax and XBRL space. This group has massive muscle. It will be interesting to see how they compete with Oracle and SAP in the corporate financial reporting market.

Anaplan – this cloud based budgeting, planning and analytics vendor could make a big splash in 2011. It has great founders and thye energy to succeed.

Mamut – innovative SME provider with large European following and close ties to Microsoft 365.  It could emerge as the pre-eminent SME provider.

UNIT4 – poses an interesting alternative to traditional ERP.  Its ability to help companies 'living with change' is resonating with a market looking for an alternative to large scale ERP.

Corefiling – clever, innovative company focussing on XBRL tools for end users and regulators.

Xero – one of the more successful accounting providers in the cloud accounting space with big ambition.

Trintech - constantly winning new customers in its niche of financial close management and reconciliation software

IT2 – making significant inroads into the corporate treasury management market

PrecisionPoint – a very innovative product which delivers management information directly off Microsoft Dynamics ERP systems. Watch out for the product review to be published in the New Year. This is a company ready for take-off.

 

  

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