IMGCAP(1)]As the founder of a consulting firm that provides cloud-based accounting software and business-process-as-a-service outsourced accounting in the cloud, I’ve gotten a first-hand look at the adoption of cloud software in finance and accounting.
Our business was spun out of a midsized CPA firm in Houston, and because of that city’s importance in the energy sector, it was natural that energy companies were the first prospects for our solutions and services. In trying to make the case for our services, we found that while a small percentage of prospects in Houston were willing to consider moving their financial data to the cloud, a much smaller number were willing to entertain outsourcing their entire finance and accounting function.
This meant two things for our business. First, we realized that simply selling and implementing the software was a natural first step until the middle market comes around to the benefits of outsourcing. Second, we learned that Houston isn’t exactly the bleeding edge for technology adoption and we might need to spread our wings a bit and look to the country as a whole…or at least look west down Highway 290 to Austin. The technological differences between these two cities just a short distance apart (by Texas standards anyway), might tell the whole story of cloud adoption from one end of the spectrum to the other.
Houston is at heart an oil and gas town, and oil and gas companies are run by an old guard. The industry has been one of booms and busts, which over the decades have created gaps in the workforce. When a bust lasts long enough and enough people are laid off, the knowledge from the last boom isn’t handed down organically to the next generation. Instead of having a wide range of ages, where the younger workers are taking what they’ve learned and looking to innovate, you have the elders and a very green crop of inexperienced workers, along with the frustrations and inefficiencies that this situation fosters.
Add in the fact that oil and gas companies are often run by the classic good old boy networks of businessmen whose ties go back for many decades, and we’ve found that the lack of innovation and aversion to risk is especially apparent in how energy companies tend to run their back offices. The bottom line is that the CFO of an oilfield services or midstream oil and gas company is probably not too interested in a fundamentally new way of running the business. As with everything, there are of course exceptions.
Austin, on the other hand, had no industry to speak of, aside from state government and the University of Texas, so the city government has cultivated multiple tech booms since the 1980s. In the last ten years, the city has transformed at a lightning pace and has become technologically at least on par with San Jose, Raleigh-Durham, Boston and other tech hubs. This reputation has led to the somewhat inelegant nickname, “Silicon Gulch.” When we have a conversation with a software company CFO in Austin, we don’t even have to talk about the benefits of the cloud and SaaS, or allay any fears about security and data integrity. They’re already past that and want to talk about functionality.
This means that sales and marketing cloud accounting software and services from Houston to Austin requires a forward shift in talking points. In Houston, we have to explain the benefits of multi-tenancy, the total cost of ownership differences between SaaS and on-premises software, and the myths about data security when running one’s own servers. In Austin, many of these companies are or were start-ups: everything they do is in the cloud, and more often than not, whatever they make and sell is in the cloud.
So while Geoffrey Moore’s “Chasm” between early adopters and the late majority doesn’t quite describe the gap between these two cities, driving down Highway 290 can feel like moving between two different worlds, both technologically and culturally. It’s interesting how those two seem to go hand-in-hand. We couldn’t have picked a better place to understand the full picture of cloud adoption.
Marcus Wagner is founder and CEO of
