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Intacct Company Review

 

Intacct Company Viability

Intacct is a small, heavily venture financed software technology company headquartered in the heart of Silicon Valley. As a private company that chooses not to disclose revenues or financial performance, we relied on information obtained from interviews as well as research and comparison points with other SaaS software vendors.

Company strengths which suggest Intacct is a credible challenger is the SaaS accounting software or broader ERP markets include the following.

  • The company shows steady customer acquisition and revenue growth. As of the date of this report (November 2011), the company counted over 5,000 customers representing over 30,000 operating entities. In fact, the pace of customer acquisitions is increasing with more than 1,000 customers acquired just this year. For the most recent quarter, revenues have expanded 70 percent year over year in new customer business. Further, Intacct appears to do a better job of retaining its customers as compared to some direct competitors that clearly experience a customer churn problem.
  • Intacct delivers a solid product and shows continued software innovation. Intacct accounting software is feature rich, flexible and mature.
  • Intacct has the potential to outflank its direct SaaS competitors with a hybrid sales and support distribution model—consisting of direct and indirect channels. While over two decades of experience clearly shows that on-premise accounting software is best delivered to the SMB market through a VAR channel, most SaaS financial publishers have swung the pendulum to far opposite and focused almost entirely on a direct sales model. Direct sales does work well with SaaS solutions, but a more balanced approach is the optimal path. Intacct gets this and while its still struggling to acquire the right partners, its clearly moving in a smart direction that if and when successful, can scale the company at an accelerated pace.
  • After a few years of revolving CEO's, Intacct now has an impressive executive leadership team. Prior CEO, Michael Braun, restored the markets confidence in the Intacct leadership team and the company, and remains in an advisory role. New CEO Robert Reid brings veteran SaaS and business applications expertise to the top post for the first time—and has done an admirable job of surrounding himself with an outstanding executive team.

However, in an increasingly fragmented and competitive cloud financial and ERP software industry with a steady stream of new venture-backed start-ups along with larger and more mature competitors getting into the space, the company also incurs substantial risks.

  • Despite Intacct's impressive growth, there is always the obvious vendor viability risk when the company is not profitable. While increased revenues are the cure for all ills, the company must increase the pace of sales growth in order to stay both relevant and viable.
  • Intacct has amassed over $80 million in venture financing since its start near the turn of the century. Unfortunately, almost all of that money is gone. As the company is not profitable, it may require additional venture or other funding to continue to support growth. However, with ventures tight fisted in the current climate, funding can be difficult to come by.
  • Intacct lacks brand recognition, and because the company is either unwilling or unable to step up marketing and promotion, the effect is certain to get worse.
  • The company has been very slow to grow and expand globally. Direct competitors to Intacct are realizing significantly increasing business outside North America.
  • There is a conspicuous absence of global business partners and larger system integrator relationships. Intaccts growth into the middle market, enterprise market and global market will be hampered without a few alliances or partnerships with at least a few of the recognized system integrators.
  • Increased competition, and increased politics, for the Salesforce.com customer market will challenge Intacct's early penetration of this lucrative partnership and prospect base. While our forecast calls for continued growth for Salesforce.com, the number of credible SaaS financial systems entering the AppExchange market, and demonstrating very close ties with the CRM giant is expanding rapidly.

Finally, while either a strength or a liability depending upon your perspective, Intacct is likely an easy acquisition target. The company operates in a growth market with plenty of upside and it's use of industry-standard and largely open-source technologies make the product adaptable with a potential acquirer's portfolio.

Next - Intacct Strengths & Weaknesses >>

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