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Pervasive's Tailor-made System

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When companies approach Pervasive Software about becoming partners, they don’t receive pamphlets outlining what’s required of them or even how much margin they will receive. That’s because every relationship is tailor-made.

The company has 3,500 partners worldwide, including roughly 200 OEMs and 45 distributors who provide some of the traditional services a value-added reseller does, such as training and consulting work. The latter operate mainly in countries where Pervasive does not have a presence.

Because partnering organizations range from small shops to multi-million-dollar corporations, basing margins on volume or setting certain sales and marketing criteria equally across the board does not make sense, says Gilbert Van Cutsem, general manager for database products at Pervasive.

Partner Insights

Not all of Pervasive’s business comes from the accounting market. But it is an important part.

In the year ended June 30, 2007, approximately 20 percent of database revenues were from sales related to applications from such vendors as Sage, Intuit, Exact Software, Cyma Systems and Epicor. In fact, Sage has been a major part of the story and has represented 10 percent of revenue in prior years.

Pervasive works extensively with Sage and is one of Sage’s most widely used databases, especially as the company continues to acquire other companies that Pervasive already has as customers, Van Cutsem says.

Products that use Pervasive technology cover a wide range.

“If you are selling something that retails in a [store] for $99, that’s one thing. On the other side, you could be building an application that manages a nuclear power plant that likely will sell for $99 million, but both are equally valid partners for us,” Van Cutsem explains.

Pervasive does provide discounts, co-marketing programs, rebranding rights and other traditional benefits associated with channel programs, they’re just determined on an individual basis instead of laid out in a clear format.

Some criteria fit across the board, however.

Contracts define each distributor’s territory and lay out a yearly annual projected net volume and discounts based on market size, economical needs and services rendered, such as training and consulting services, which Pervasive itself offers but prefers to hand over to partners.

“When it’s possible, we are an indirect company,” Van Cutsem says. “Even if we have core competencies in house, that’s never the first choice.”

Distributors need to be connected to the ISV community, be financially healthy and possess ample technical skills because they’re located in different time zones than the Texas-based company and cannot always call on Pervasive for assistance, Van Cutsem says.

In countries like Japan, these qualities are particularly important as is having a local person who speaks the language and understands the legal system and customs, he says.

“They are logistical partners, financial partners who take care of currency exchange, currency risk, legal issues, etc. They provide first-level support, training and consulting — on the phone or on site. Some of them we really trust might even close OEMs on our behalf,” Van Cutsem says.

Joaquim Moreira dos Santos, managing director of SOS Software Service, attests to the need for having a local presence with his clients. His company, which distributes software to thousands of clients every year in Germany, Austria and Switzerland, is based in Augsburg, Bavaria, about 40 miles from Munich. Seeing the importance of face time, SOS Software Services opened a subsidiary in Switzerland so employees could service clients in person.

“In Europe, it is still very important to be in the country with the clients. We have the EC (European Community) with one currency in most of the countries, but the language and the business culture is still different,” Moreira dos Santos says. “This is a big advantage for our value-added distribution model and very successful for vendors [like Pervasive] in the U.S. The clients can talk in their native language and work in their time zone.”

Power Behind the Wheel

Regardless of where the end-customers are based, they all want a reliable database.

SOS Software Service sells a variety of products including programming tools and technical software. The company works closely with Microsoft, Borland and Oracle, but most of its database business is with Pervasive Software.

“We got involved with Pervasive in the late 1980s, when we started to work with former Btrieve Technologies. Our partnership with Pervasive has been growing from the first days,” Moreira dos Santos says. “Pervasive products are fast, reliable and it is possible to work without any administration. Most of our clients need this kind of database. The current development of version 10 (the latest offering) is the exact continuation of these features.”

The company continues to diversify in the face of SQL Server competition from Microsoft. Pervasive PSQL Summit 10 allows for development and deployment on multiple platforms, including Windows Vista, Windows Server 2008 and Linux, includes either a 32-bit or 64-bit architecture for increased memory space, binary compatibility to move databases from one operating system to another and 10 years of backward compatibility so customers can migrate to more recent versions at their own pace without losing data stored in older versions.

Some of these innovations are ahead of end-customer demands, such as Vista compatibility and 64-bit support, according to OEMs such as Cyma Systems, but because Pervasive made the updates in advance, Cyma and others also can prepare their products for what they consider to be a future trend.

“We keep following the trends and making sure our customers can move from platform to platform using the same application and the same data,” Van Cutsem says. “Historical data is very important in accounting. It’s our role to make sure it’s still visible.”

Mark Ramsay, managing director of Infoplex Unlimited, a U.K.-based OEM, also began working with Btrieve two decades ago and continues to be impressed by Pervasive’s technological developments, particularly the backward compatibility.

“If we wrote our own software three to four years ago, we don’t have to change a single line of code,” Ramsay says. “We still have customers using DOS systems. Even on Windows Vista with version 10, you can run it quite happily. The only problem area is printing, because the old program only worked with Dot Matrix.”

Infoplex develops tools to use with Sage’s TAS Books, a popular accounting application in the United Kingdom that’s similar to Peachtree in the states. The company has nearly 900 customers, with an average of five to six people using the system. So ease of use is another important factor, along with price.

“The things [our customers] like most are performance, speed and reliability. They don’t know much about the underlying database because it’s under the bonnet,” Ramsay says. “They get V12 performance at a four-cylinder price. They don’t know whether the engine is a four-cylinder or V12, but they feel the difference.”

Many options exist with pricing. Some examples for purchases directly from the vendor include: a 10-user client server has a list price of $1,195; a single-user workstation starts at $49 and an Internet license with an unlimited number of users is $8,000.

Ramsay wishes the pricing for OEMs was transparent, but that goes back to Pervasive’s individualized approach.

“If you [sell] Peachtree and say, ‘We have X users,’ you’re going to get a better price. If you go on Amazon and order 10 of something, you get 5 percent off. It’s easier to know the options,” Ramsay says. “But with these deals, you’re not sure what’s going on behind the scenes.”

Others, like Bill Bach, president and CEO of Flossmoor, Ill.-based Pervasive Premium VAR GoldStar Software, are happy with this untraditional approach.

Bach first became involved with Pervasive as a software developer in 1991 and GoldStar Software incorporated in 1997 with the goal of providing top-tier service and support training. But the company also serves developers, resellers and other consultants in addition to end-users.

“This makes it difficult for us to fit in the marketing boxes that many vendors want to lock you into,” Bach says. “We've dealt with many other vendors, including Novell, Microsoft, Sage and others throughout the years, usually in the capacity of standard resellers or certified consultants. Only Pervasive has recognized our unique situation and helped tailor their program to meet our unique needs that result.”

Alexandra DeFelice is Associate Editor of Accounting Technology and can be reached at alexandra.defelice@sourcemedia.com.

Pervasive Software Snapshot

Company HQ: Austin, Texas.

Number offices: 6 worldwide

Phone number: (800) 287-4383

Web site: www.pervasive.com

Revenue: $40.8 million (Fiscal Year 2007)

Employees: 215

Partners: 3,500 (OEMs, ISVs and Distributors)

Founded: 1982 (Btrieve Technologies)

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