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The Tech Take

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This was quite a busy year with large vendor financings, acquisitions, cloud and mobile growth and new products galore but I think rather than an expected year in review (we have a pretty good slideshow on that), I thought Iíd offer my take on what 2014 will likely bring in the way of accounting technology news.

The short answer for what I see coming in the New Year is more of the same: more money behind cloud accounting, more mobile products, and consulting firm consolidation at all levels. Taking a more specific approach I think we will likely see the following as well:

Changing the VAR Moniker: For years now, definitely since the late 80s/early 90s, accounting and ERP vendor channel partners have been referred to as VARs. The name stuck, it was an easy way to introduce potential customers to what they did and it was, essentially, at the core of their business. These days, there are less of the existing breed from that time period even around, and those who are in the business have seen it change dramatically -- evolving to more strategic advisors and consultants and service-oriented organizations rather than sellers of product.

No longer do they see themselves as ďresellersĒ or as just product sales people. Certainly that part of the business has picked up of late, but with the advent of native cloud products and platforms the whole idea of reselling becomes a grey area.

Iíve had many discussions in the past couple of years with these channel partners and the general consensus seems to be that the term has very little meaning anymore in their world. Some are even adamant that it needs to change and no longer refer to themselves with those three letters, even to future customers. This is at the core of why I see the name changing to something more reflective of what this business sector actually does, versus what they used to.

More Cloud for the Midmarket: The past year was filled with growth in cloud accounting, whether it was the emergence of new companies targeting small and individually-owned businesses or the financing of existing ones eyeing the same space. What we have yet to see, and I think we will see more of, is the same level of growth for midmarket cloud accounting and ERP products.

Sure, there are some notable names in the space now if you are looking at NetSuite, Intacct, Acumatica and if you want to stretch it Workday. But I think we should all keep an eye on what SAP is going to do in this space, for one. Yes Business ByDesign is still out in the market but as we all know that product is essentially going to undergo an evolution into something else, one that will likely be revealed in 2014 if SAP has their way.

Then there are companies that only started to poke their head up this year that will likely get more attention, from partners, users, and investors. Iím referring mainly to the likes of Gem Accounts, Trek Global and others that are coming down the pike.

Accounting and ERP Vendor Acquisitions: This is obviously a normal part of activity in the accounting technology world, but there are several companies out there that are likely to be the subject of or involved in some noteworthy buys in 2014. Iím not saying this necessarily with any inside knowledge, other than the nature of their business is evolving and they would do best to grow in this way rather than building something internally.

I would specifically look to the likes of Paychex, Wave, Xero, Intacct, Sage, Bill.com and Intuit to make some noteworthy buys to both strengthen their brands and compete better in the markets they serve. As to who is going to do the buying and who will be bought remains to be seenbut there are serious advantages to be had for these companies at either end of a deal.

Those are really my top three predictions, I have a few others at a smaller scale Iíd be happy to discuss. For now, my best wishes to you and yours in the New Year and thank you for being loyal readers.

1 Comment

Seth: great perspectives. You've captured many of the ongoing changes that are taking place in the channels. It's true that most of us have evolved from VARs into trusted, strategic advisors and professional service organizations. It will be interesting to see how 2014 unfolds for all of us.... -Jeff

Posted by: jeffinsh | December 27, 2013 4:12 PM

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