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Intacct SaaS Suite Slowly Lures QuickBooks Users

Thousands of small companies run their businesses using Intuit's QuickBooks applications. But as companies grow, they often look for more scalable financial applications such as those offered by Microsoft, NetSuite and Sage. Intacct, a San Jose, Calif.-based developer of Software-as-a-Service financial management software for SMBs, is pitching itself to the channel as an alternative.

Thousands of small companies run their businesses using Intuit's QuickBooks applications. But as companies grow, they often look for more scalable financial applications such as those offered by Microsoft, NetSuite and Sage. Intacct, a San Jose, Calif.-based developer of Software-as-a-Service financial management software for SMBs, is pitching itself to the channel as an alternative.

Intacct is among a growing number of SaaS providers that are exploring how to leverage the channel to help deliver their on-demand applications. A new report from research firm IDC said SaaS application vendors are rapidly expanding their channel strategies, but "there are still nascent partnering business models in the SaaS ecosystem" and "most of the activity is occurring on a trial-and-error basis."

But it's worth figuring out. IDC projects that SaaS application sales are growing 21 percent a year and will reach $10.7 billion in 2009.

Intacct offers a suite of on-demand financial management software, including general ledger, billing, cash management, and accounts payable and receivable applications, plus supply chain and inventory management, project management and business intelligence software.

Founded in 1999, Intacct has quietly built a customer base of some 2,000 small and midsize businesses. But the company has been raising its visibility of late: At last month's Salesforce.com user conference, Intacct debuted Intacct MAX, software for linking Salesforce.com's on-demand CRM apps with Intacct's back-office financial apps. In June, the company received $14 million in venture funding from Sigma Partners and Sutter Hill Ventures, among others.

Earlier this year, the company named Mike Braun as CEO. Braun was on the team that launched the original IBM PC in 1981, led the Kaleida Labs IBM-Apple multimedia joint venture in the mid-'90s, and has since been CEO of several Silicon Valley companies.

"Our focus is on helping customers make the transition from QuickBooks. After they exceed 20 users, SMBs on QuickBooks hit the wall," Braun said in a recent interview. Although Intacct applications can support companies with as many as 1,000 employees, Intacct particularly targets its applications toward QuickBooks customers with between 20 and 100 employees, and then grows with them. That puts Intacct in competition with on-demand applications like NetSuite and on-premise apps such as Microsoft Dynamics, SAP BusinessOne and Sage Accpac ERP.

About 50 percent of Intacct's sales involve some kind of channel partner and Braun said the company is interested in expanding its partner program. The company works with traditional resellers, some of which add their own SaaS products to the mix; integrators that provide implementation, integration and customization services; outsourced accounting service providers; and OEMs that develop their own line-of-business applications based on Intacct's software.

Intacct offers channel partners volume-tiered sales commissions through the life of the customer contract, referral fees for sales leads, discounts on the vendor's professional services, sales and solutions training, presales and postsales support and matching market-development funds. Partners commit to developing a business plan, paying an up-front program fee, developing a dedicated sales and consulting staff with expertise in ERP and financial software, and closing on at least one new customer sale per quarter.

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