PJ: What is your exit strategy? Is configure price quote (CPQ)/quote to order (Q2O) sustainable as a standalone market in light of recent acquisitions in your space (most recently Webcom by Callidus Software)?
DB: Given that I have just started at the company, we are not yet thinking about the end game for BigMachines, and I will rather talk about our growth strategy. The main pillar of our projected stellar growth for next couple of years is to do more in the CPQ market in terms of selling to new customers and new industries. There is still plenty of arable land in this space, and we are the leader: our revenues equal the combined revenues of our competitors. Also, we currently have the following three engines – (direct) sales, channel, and e-commerce – and there are abundant cross-selling opportunities to existing customers as well.
Over time, we plan to broaden our functional footprint by enabling customers to further generate and protect their revenue. The latter aspect can be done by contract management, asset-based renewals management, upgrades, etc. Many issues and considerations take place in sales and engineering departments before the configuration and quoting take place. For now, we will develop those adjacent functionalities internally, but you can never know whether, say, in two years time our approach to acquisitions might change.
PJ: What about the true multi-tenant software as a service (SaaS) discussion? How does your repeatability theme jive with your customized UI practice?
DB: Our competitors have long portrayed as negative the fact that our customers have customized their user interfaces (UI) and the system in general (and thus are not all on the same latest release). Our recent meteoric growth might indicate that their negative campaigns are not really resonating with the prospective customers. In fact, true multi-tenancy and being on the latest release mantras do not really resonate with many customers, and it is rather beneficial to the vendor for the economy of scale R&D and support reason.
WW: If anything, many of our customers prefer to be on their own schedule with regards to when they are ready to migrate, plus, they like the flexibility to tweak their client side. Having said that, going forward, in line with our predictability and repeatability mantra, we will strive for fewer customers’ customizations and for more of them being on the latest product release. But we don’t foresee every customer to be in a one-size-fits-all setup (with everybody being on the same automatically updated release) for some time to come.
PJ: How is the novel QuickConfig multi-tenant offering, which was introduced in late 2010 (see the related blog post) doing?
WW: The prepackaged and simplified configurator product on salesforce.com’s Force.com platform (with no other modules such as our extensive admin tools and rules engine/repository) is very nascent, but we have recently had a few go live customers. Stay tuned for more information and updates.
PJ: Your partner ecosystem is impressive, but what about the formal SAP relationship and certification?
WW: We do have a relationship with SAP and some SAP resellers (e.g., Espline), but not nearly as close and strategic as with salesforce.com and Oracle. Getting more strategic and closer with Microsoft Dynamics CRM is on our to-do list for next year, while a strategic partnership with SAP is not yet being sought by our customers.
Let me point out here that we have a number of integrations to other enterprise resource planning (ERP) systems beside SAP and with no customer relationship management (CRM) integration at all, due to BigMachines’ ability to go standalone. When and if our customers require some pre-packaged and certified integration to a particular product (via their Big Idea voting mechanism) we will act on it.
PJ: What do you plan to do differently and better than your predecessor?
DB: First of all, let me reiterate that my predecessor and the company co-founder is still involved with the company as an advisor, and our new directions have gotten his blessing. It is just that BigMachines is taking another step in its corporate evolution from a startup to an established company.
For one, we are instituting corporate-wide process changes in line with how an established company runs its processes, from recruiting new employees to reporting our taxes. Second, the changes will come in terms of predictable outcomes for all of the constituents: BigMachines, our customers and our partners. Based on early adopters’ experiences, standardized products and best practices will simplify CPQ complexity as it has already happened in the realms of ERP and CRM.
PJ: Why do CPQ projects, independent of vendor, sometimes last for months (if not years)? In particular, why have some BigMachines implementations gone badly in the past: for being oversold and/or the lack of good implementers (due to high growth and supply chasing demand)?
DB: One should understand that, even though not as broad and complex as ERP or CRM scopes and processes, CPQ processes are still complex. There is plenty of forethought required in devising product lines, variants, rules as well as quoting and selling process proposal generation and approval steps.
For our part, BigMachines might have had some protracted implementations for all of the aforementioned reasons as well as for early adopters over-customizing their systems (which makes difficult for them to migrate to the latest release that now natively provides functionality that they have had to customize the system for). Still, our longest implementations do not exceed the six to nine months time frames.
WW: With our decade long experience at hundreds of customers we have been developing best practices and industry frameworks for more rapid user adoption, sometimes measured in weeks. We strive to make our CPQ system as easy as Facebook, which actually was how one customer (TE Connectivity, formerly Tyco Electronics) described the use of BigMachines by its users. We will question customers’ need to customize the system and try to wean them off those bad habits bearing in mind that some customization might always be necessary.