The Tech Take

[IMGCAP(1)]We can always discuss product news, but I’m thinking that in recent history there have been few development more worth noting than the acquisition of Tectura and Armanino’s move to snap up Rose Business Solutions.

Channel consolidation is a real thing and the first to kick off this year was in the Microsoft Dynamics channel, one of which resulted in new leader in the so-called VAR world; I am glad to give you my take. First, let’s get to the biggest deal that we’ve seen in the accounting/ERP partner world in a while…

News: UXC Eclipse Inc., the U.S. arm of Australia-based UXC Ltd., has purchased Tectura North America, effectively creating the largest Microsoft Dynamics reseller in the country. Though financial terms of the deal were not disclosed, Tectura’s operations in Canada, U.S. and Latin America will become UXC Eclipse, while Tectura will retain its businesses in Europe and Asia. The deal, which was several months in the making, will see UXC’s U.S. staff grow from 85 to nearly 300 and over 600 globally with over 2,700 customers.

My Take: First and foremost, there is a new leader in town. For years Tectura held the top spot among accounting/ERP reseller partners in the U.S. (and, to be fair, North America) but with this purchase that role now goes to UXC Eclipse. Mind you, this is in terms of what the projected gross revenue of the combined companies will likely be.

Lots of speculation has been swirling around this deal, which since UXC Eclipse’s parent is a public company, there could be more coming out over time. For one, an announcement on the Australian Stock Exchange website stated that “UXC Eclipse, a wholly owned subsidiary finalized an agreement for the acquisition of North American assets and businesses of Tectura Corporation for consideration of US$21 million.”

Now, to me, that seems quite low and most likely doesn’t tell the whole story. Granted, Tectura has global subsidiaries in Europe and Asia and we’re just talking about the North American division here and even with any debt Tectura may have been in, it still seems low.

Regardless, it seems the change may be welcome from a business and cultural perspective.

For UXC, this is, I think, a real boon. There is still much talent at Tectura; they get to expand their Microsoft Dynamics product line in North America – namely AX and NAV; and also offer some specialty products that Tectura created like Reqlogic -- a browser-based employee productivity suite that provides eProcurement, requisitions, invoices, expense reports and advanced workflow. 

Overall, I think it will be interesting to see what UXC will do. I’m certain they’ll have a strong presence at Convergence and we’ll see more marketing overall, not only to customers but to other channel partners as well.

News: Accounting and consulting firm Armanino has purchased Rose Business Solutions, effectively combining the Microsoft Dynamics consulting and reselling businesses. The deal allows Armanino to take on 10 (or half) of Rose’s staff, as well as approximately 250 Dynamics customers. Rose Business Solutions has represented Microsoft Dynamics GP and CRM as a consultant and reseller for over two decades.

My Take: I think both Rose and Armanino have been studying the “win-win” playbook pretty closely and followed it to the letter. There’s not too many other ways to slice this one. Look, Rose had been in the consulting/reseller game for 20+ years and spent the latter half of that time running another business that, over the past few years, became more profitable and showed comparatively more upside potential. I’m referring of course to the cloud hosting business RoseASP. So, what does any wise consultant do when one practice that you’ve nurtured and helped mature is still important, but could potentially do better with more attention? You find a good home for it and I think that’s just what Rose did.

Armanino has a growing consulting practice, in fact it’s one of the few accounting firms in the country where revenue from consulting services is so significant. They’ve enjoyed seeing their own cloud practice flourish and has used RoseASP as a part of that growth. In short, the two have had a pretty solid working relationship and now they get staff, an office in San Diego (with RoseASP right next door) and about 250 more GP clients. Not a bad day’s work.

And then there was this little item…

News: Xero has hired CPA and accounting technology veteran Amy Vetter to the newly created position of global vice president of education, where she will lead the company’s efforts on internal and external training.

My Take: OK so it’s easy to look at something like this and make assumptions on why she left and all of that. Really with any fairly high profile move it’s always the knee-jerk reaction to wonder what went wrong. In this case, I don’t think it was an issue of not getting what she wanted from Intacct so much as the opportunity to do different things with another brand trying hard to connect with the CPA profession.

People know Amy, she seems to have a very solid reputation with whatever brand she has represented, but I believe that she’s a CPA first and has a unique insight into technology to help serve the profession.

And, in conversations with her, I believe her when she says that training and educating are big motivators for her. I think she did a fair amount of educating over at Intacct for sure, a large part of her job was connecting with the CPA channel in that way, not just straight selling a product because – let’s be honest – CPAs don’t like being sold to. They know they need to learn about where technology is going and how it can help their practice and their clients.

As for Xero, they are doing all they can to create buzz around themselves and to be a recognized brand for CPAs to know and trust. Then of course there’s that thing about crushing QuickBooks but all of these goals require time, persistence and the right people to execute your message.

All of this will take time Someone like Vetter, who already has the connections in the CPA community and the trust, can go a long way not only in spreading the message and helping Xero become at least more thought about when it comes to accounting technology, but also aiding internal staff on how they need to be reaching out to the profession as well.

I don’t profess to know exactly what this new job is or will be all about – I think Vetter would even admit that as well, but at its core Xero needs someone like Vetter just as Intacct did in the unique position they created for her.