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SAAS UK ACCOUNTING MARKET: OPPS AND CHALLENGES

‣ September, 2010

Dennis Howlett

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obligatory advert

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SAAS IS HERE TO STAY

‣ IDC: SaaS accounting no 3 on list

‣ UK YoY growth = 100% ave in SMB

‣ “Every SaaS vendor in the Software Insider Index drove 14% to 26% growth despite the pick up in on-premises license sales” (Ray Wang - Altimeter: 20th Aug, 2010)

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UK SME MARKET

‣ Total opportunity = 5.3 million people/enterprises

‣ Real opportunity, likely 1.3 mill cos + proportion of 0.3 mill ptnrships

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UK SME MARKET

‣ Xero’s est per annual presso: July, 2010

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UK MARKET - VSB

‣ Highly competitive, 70 apps

‣ Kashflow, FreeAgent, Xero, e-conomic, Liquid, WinWeb...etc etc but

‣ All to play for while...

‣ Sage being disintermediated

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VSB DIRECTIONS

‣ Vertical - FreeAgent

‣ Horizontal - Xero etc

‣ Process - BrightPearl

‣ All-in - WinWeb

‣ Limited - FreshBooks, Blinksale

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‘M’ IN SME MARKET

‣ Very few credible players

‣ Twinfield, NetSuite, Intacct, SAP BYD and ??

‣ High value opportunity but...

‣ Suites likely to win significant value deals

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THE PRICE MYTH

‣ Price assumptions are whacked

‣ Players think price is crucial

‣ NS delivers 3x Twinfield for 5x+ price

‣ Key is perceived service value

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THE PRICE MYTH

‣ Kashflow: £14.99 for accounts. Lots of APIs

‣ FreeAgent: £25 but inc CT calcs.

‣ Both growing fast - FreeAgent got IRIS deal - go figure?

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THE VALUE PROPOSAL

‣ Perceived value creates the deal

‣ Try before you buy matters

‣ User experience vitally important

‣ Post sales service = stickiness

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THE VALUE PROPOSAL‣ “When Nintendo introduced the Wii in

2006, the video game console wars where in full swing…Nintendo opted out of this [technology arms] race by giving us a console that was a lot less of the things we were expecting, and a lot more of the things we weren’t. And the result was a revelation. An eye opening, unanticipated revelation. All it takes is for a single firm to come along and alter the evolutionary trajectory of a single category.” - Youngme Moon - Different: Escaping Competitive Herds, 2010

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ACCOUNTANT’S OBJECTIONS

‣ It’s not Sage

‣ It’s not secure

‣ I can’t customize

‣ It doesn’t do Excel

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INCUMBENT’S FUD

‣ It’s not Sage/Microsoft/MYOB etc

‣ It’s not secure

‣ Hybrid is better (if you must)

‣ It doesn’t do Excel

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THE SOLUTION

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ACTION

‣ Every interaction is a service opportunity

‣ Engage often and on their terms

‣ Differentiate on service

‣ Help accountants’ onboard clients

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EXAMPLE

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are needed to see this picture.

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RECAP

‣ Market opportunity is huge

‣ FUD is rife - talk benefits, not FF

‣ Make user experience stunning

‣ Never compete on price

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Q&A

Dennis Howlett

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Dennis Howlett

CONTACT‣ email: dahowlett@gmail.com

‣ Twitter: http://twitter.com/dahowlett

‣ Skype/Facebook/LinkedIn: dahowlett

‣ tel: +34 953 708 636/+34 607 482 739

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Dennis Howlett

THANKS & CREDITS

‣ Thanks for your attention

‣ Thanks to Hugh MacLeod: http://www.gapingvoid.com for use of his art