ERP Vendor Exact Software Seeks Midmarket Growth

KENT: The revenue as of last year was about $240 million to $250 million. We are represented in more than 60 countries.

CRN: What market areas do you focus on?

KENT: In North America, we go after distribution and manufacturing companies. We say we're the only vendor in North America with more than 11,000 customers that are all manufacturing customers. We traditionally play in the $5 million to $50 million arena . CRN: What's next on the agenda for Exact?

KENT: We have some products we're going to introduce in March, April and May over here that are already introduced outside of North America. And because we are going to introduce some new products in 2005, we are going to invest in marketing with regard to business partner improvement this year. Right now, we have 15 new partners we want to recruit for specific geographic areas where we feel we're not getting the penetration or the coverage.

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Our whole focus worldwide is to show people that we are taking our product offerings beyond ERP. We feel that in 2005, with the product we're going to introduce and the ones we have today, that we have three or four cards we can play to differentiate us.

CRN: How many channel partners do you have? KENT: When Exact bought [ERP vendor] Macola three-and-a-half years ago, there were about 400 business partners. I came on board at that time and saw that 50 percent of them did less than $200,000 in revenue for us.

We went on a conscious effort to promote quality over quantity in partners. We feel like we have 75 real quality partners spread throughout North America. Right now, capacity is not an issue, but I'm hoping that it will be in 2005.

CRN: What differentiates Exact Software? KENT: We have a product, called e-Synergy, which is a front-office offering that is fully integrated with our back-office offering. You'll get portal capability, document management, workflow and financial integration. That's what separates us from our competition.

CRN: Do you expect to see more of your channel partners playing across multiple countries?

KENT: Absolutely. Boundaries have disappeared, the world's becoming smaller, and we have a major initiative worldwide. It's called Parenting, and it's specifically focused on multinational companies that have multiple locations and have to deal with multiple currencies and multiple languages. Our products are all multicurrency, multilanguage-capable. And we have a group inside North America that partners go to, which takes care of all the logistics, all the communications, the proposal writing and installation, while protecting the partner's margin. It's all seamless to the prospect. It's a huge advantage that we absolutely will be touting in 2005.

CRN: How tough a competitor is Microsoft in this space?

KENT: They're formidable. Obviously, we cannot spend the market dollars that they spend, and we do not have more than 5,000 small-business resellers in North America. We have to be very focused in our offering and how that translates into vertical messaging and vertical positioning. We feel we can win in the right environment with our solution.

CRN: What about Best Software as a competitor?

KENT: They do have some good manufacturing capability in their product offering. But again, there are a lot of generic resellers that sell accounting and distribution software.

We feel like we can compete in the manufacturing arena quite positively with our solutions. But we do see a lot of price competition with Best right now in our deals. That is an issue. In general, we've seen a lot of price competition out there that we haven't seen for a while.

CRN: As a VAR, what led you to Exact Software?

KENT: As most often happens, it was all about the Benjamins [money]. I was not looking to sell my company, but Exact made me a wonderful offer. Part of that was a contract for two years to stay on, and I subsequently extended that contract to help [Exact] grow in North America.