Cloud ERP vendor Intacct’s Xtreme Business Building Conference this week had a record number of partners, as the company continues to expand its channel business.
Six years ago, cloud ERP vendor Intacct sold entirely direct. Now, on the heels of its successful 2017 Xtreme Business Building Conference, their channel sales bring in about half of their new revenue, with what the company thinks is a relatively unique channel model for the space.
Intacct was founded in 1999 as a born-in-the-cloud ERP vendor, with a focus on the midmarket and SMB.
“Intacct is very focused on that part of the market which is above QuickBooks and Simply Accounting, and below the SAPs and Oracles of the world,” said Taylor Macdonald, Intacct’s Senior VP of Channels. “Our customers tend to be companies who have moved to the cloud and are growing quickly, including a lot of non-profits. While we are mainly in North America, we are also in Australia and New Zealand. We don’t try to be everything. We don’t do CRM, and are a Salesforce Platinum Partner who will refer to them unless a customer has something else they like. We do do four major releases a year, with 30-50 new features every quarter.”
Macdonald, a veteran of 20 plus years in the sector who was a former top Sage and Great Plains partner, took the channels job six years ago, when Intacct didn’t have a channel at all.
“At that point, we started to build a channel from scratch, and tried very hard to take a different approach to the way we build in and invest in a partner channel,” he said. “We emphasized recruiting the best partners, and now have many top partners. That includes 29 companies on the most recent Accounting Today VAR 100 list, 27 on Bob Scott’s Top 100 VARs list, and 26 on Bob Scott’s VAR Stars list.
“We have a hybrid channel with very strict rules of engagement and enforced deal registration,” Macdonald indicated. “Today, about half of our new revenues come from partners and channel partners implement 70 plus per cent of the deals that are closed. Channel sales are growing at 50-55 per cent per year, above the 40 per cent in total business growth. It has taken us a while to get to 50-50 channel revenue, but over time we will move more and more to the channel model.”
Intacct’s channel is comparatively small by the standards of the industry, with about 100 partners globally. They have several partners in Canada, but the main one is BAASS Business Solutions. They are headquartered in the Greater Toronto Area, but have 14 offices across Canada, as well as several in the U.S.
“We are always in aggressive recruitment mode – if we can find partners that fit our profile,” Macdonald stated. “This isn’t a kind of business where people wake up in the morning and decide they want to sell accounting software. If you aren’t an accountant, or at least understand the business, you have no ability to do this well. So about 80 per cent of our partners have a legacy, on-prem product that they carry, and choose us to be their next-gen product. Some use maintenance dollars from their on-prem to invest in the new cloud area with us. The dichotomy between the different solutions is immense.”
Macdonald said an important reason why they don’t have more partners is that there aren’t enough good partners out there, particularly since many established ERP resellers still haven’t made the move to the cloud.
“18 months ago, 50 of the top 100 ERP resellers didn’t have a cloud product,” Macdonald said. “Now it’s about a third, which is still high. In Denver, for instance, we can’t find a partner. The hybrid model works well where we don’t have partners, although partners are more efficient because they implement, and prevent us having to maintain a large services team.”
Macdonald said Intacct also actively works to keep all its partners productive.
“The partners have sales quotas, appropriate for where they are in their lifecycle,” he said. “We also de-authorize the bottom 5-10 per cent every year. It’s incredibly expensive for us to carry partners who aren’t invested in the program, and aren’t invested in building an Intacct practice. And they are just wasting their annual partner fee.”
The recently concluded 2017 Xtreme Business Building Conference, which wrapped up on Wednesday, plays a key role in keeping partners productive.
“We don’t have a conference because we have to have a conference,” Macdonald said. “It produces results in helping partners make more money by helping them learn best sales and marketing practices, and especially by learning from each other.”
The event grew from 225 to almost 400 this year.
“We added a track for a different kind of partners that do outsourcing for smaller business, which added about 60 people, and we also have 40 plus more partners than a year ago, which also increased attendance,” Macdonald said. “Partners who went last year got a lot out of it, so they brought more people this year. We capped at 10 people per partner, and had six partners bring nine people or more.”
Macdonald said they use a model of having partners teach partners, which has been incredibly powerful.
“Passing on tips and tricks has led to tremendous upticks in the amount of business partners are doing,” he said. “There’s a lot of energy in the room. The community that we have built of partners helping partners, and teaming up on large deals, has led to a great place to be where there’s a lot of excitement.
Macdonald said they expect next year’s conference will have closer to 500 partners.