December 7, 2010
I’ve covered professional services automation (PSA) software previously – NetSuite created some news awhile back when they acquired OpenAir sold it as a module to their ERP offering. This morning FinancialForce is announcing that they have acquired the PSA solution originally developed by Appirio. FinancialForce says that it is making the acquisition to expand its strategy of providing complementary solutions built on the Salesforce Force.com platform. But importantly this is the first complete ERP/PSA/CRM solution built on the same platform – a distinction that is relevant given the fact that OpenAir is built on an entirely different code base from NetSuite and hence is less readily integrated. For services organizations this means that they can run all of their core systems on a single solution.
More interesting is Appirio’s reasons or selling the product – it seems a move away from product and more firmly focused on services is the angle for them – a strategy that kind of goes against my advice to services companies to productize their offering. No doubt given he very close relationship between Appirio and salesforce and the partial ownership of FinancialForce by salesforce, there are some background arrangements that ensures Appirio maintains a good revenue stream from the deal.
As part of the deal, Todd Bursey, VP of PSAS at Appirio will be joining FinancialForce, he’s understandably bullish bout the combined product saying “PS Enterprise has been very successful as a standalone solution, but combined with FinancialForce.com and its domain experience, it will be even more compelling to a wider range of customers”
Both solution sets will continue to be sold and supported separately. PS Enterprise will continue to integrate with customers’ existing finance systems, both cloud-based or on-premise.
I’ve said before that PSA is the sleeping giant of enterprise software – this deal gives it some more deserved attention and will be a win for service organizations.