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BigMachines: Getting Bigger and Better - Part II
BigMachines: Getting Bigger and Better - Part II
November 10 2009
Part I of this blog post series
talked about my encounter with
, a provider of slick
configure, price, and quote (CPQ)/
solutions during my recent attendance of
Summit in Scottsdale, Arizona (US).
Prior to analyzing recent events at BigMachines,
Part I explained the general value proposition of on-demand Q2O and CPQ software solutions
. Part II will continue with a discussion of recent developments at BigMachines.
From the vibrant SaaS Q2O pack,
is differentiated by its market leadership with the fastest growth, the most customers, and the
strongest roster of marquee partners
. Although the vendor has long been a prominent partner in both
Oracle CRM On Demand
’s ecosystem, these partnerships have lately been further deepened.
Ahead of the SaaS Q2O/CPQ Pack
Namely, BigMachines was
named the best quoting tool on the
by Salesforce.com in February 2009
. The highest customer satisfaction with over 100 joint customers has also prompted Salesforce.com to include BigMachines in its new
strategic partner program, which was also signed in February 2009.
front, BigMachines was
selected as an “Elite 8” and “Inner Circle” Partner for Oracle CRM On Demand in September 2008
. Last but not least, f
rom May 2009 BigMachines has been offering its quoting and configuration platform for
Microsoft Dynamics CRM
with the first joint customer onboard. The vendor has dedicated personnel for all the “big three” CRM providers, which is unmatched by its competitors at this stage.
Compared to most of its competitors, BigMachines also has superior global resources with reputed services, support, and high-performance operations. Its infrastructure is hosted at
, which are both renowned hosting providers. I
n mid-2008 BigMachines also passed a rigorous audit for the SAS 70 Type II certification
, which is generally a very big concern for global enterprises.
While some competitors with much more longevity in the market, such as
Cincom Systems’ Acquire
Selectica Configuration Platform
FPX’s Firepond CPQ
might claim support for multiple currencies and more languages (all done in one step and with no separate local price lists to manage), BigMachines touts many global enterprise clients with thousands of users (and even tens of thousands of users). One customer alone uses the product in over 187 different countries with its full
multibyte character set
and multicurrency compliance.
Product Development Continues
The debate about which on-demand Q2O vendor has the most innovative technology (including a dynamic
user interface (UI)
, powerful administration tools, and rapid development environment) continues, and the jury is still out. Indeed,
can also claim that their data and UI can be easily modified and managed (e.g., in a
-based manner or via
). Similar subjective discussion can go on about these vendors’ approval processes’ flexibility or who has the snazziest
document management system
and proposal generating capabilities.
Therefore, the 2009 roadmap focus at BigMachines was an improved
user experience (UX) design
, easier and faster administration, and the delivery of some new modules. While on-demand software companies keep releasing new products continually, the
release was a major one, with some brand new modules and many enhancements.
For one, the vendor has done some more coherent branding and has done away with the somewhat confusing monikers of the past, such as
SPP (Select, Price, & Propose)
LFE (Lean Front-End)
. The three main modules of the BigMachines 9 platform are now the following:
BigMachines Sales Engine
– empowers the direct sales force with virtual support;
BigMachines Channel Sales Engine
– enables partner
and other components of the partner relationship management (PRM) software category; and
BigMachines eCommerce Engine
– serves customers on-line around the clock.
The eCommerce Engine was launched relatively recently
, and the vendor is currently working on implementing a number of credit card transaction and tax calculation partners.
Other optional modules in the BigMachines 9 platform include the following:
BigMachines Administration Platform
– currently being continually simplified to help administrators define online their product data, UI, commerce rules, etc.;
BigMachines Integration Platform
– integrates to CRM, ERP, and e-commerce systems using
. As said earlier, there are packaged integration options to Salesforce.com CRM [
evaluate this product
] , Oracle CRM On Demand [
evaluate this product
] , and Microsoft Dynamics CRM [
evaluate this product
BigMachines Document Engine
brand new patent-pending module for building “rich look-and-feel” proposals and sales documents
on the fly using a
– another relatively recent addition to empower remote (disconnected from the Internet) usage of the Web-based application, with
and syncing capabilities. Major Unplugged enhancements were delivered within the
release in May 2009.
release, which was delivered shortly after in late June 2009, had enhancements in terms of configuration attributes value pricing, while new commerce features included automated mobile and e-mail approvals and
AJAX (Asynchronous Java and XML)
field updates. Last but not least, admin change permissions now provide admin change logs and the
platform's user integration.
In the realm of service and support, the documentation improvements include so-called “cookbooks” and knowledge base help for eligible users. To foster and nurture the sense of community and customer involvement, the
offering includes a number of
, a customer advisory board, and so on.
To that end,
BigMachines My Big Idea
was launched in late 2008. Customers’ voting increased exponentially in 2009, and 8 of the top 10 ideas are reportedly planned for the next product release.
But There Is Still Room for Improvement
But in addition to being somewhat late to market with off-line (unplugged) and e-commerce capabilities compared to its competitors, BigMachines has some more functional catching up to do. For example, the upcoming
demonstrated at the
will finally feature
shopping cart software
, which has been a featured as a matter of course by many other Q2O providers.
Webcom and FPX point out that, technically speaking, BigMachines is not yet a true multitenant SaaS provider. Namely,
Deutche Bank Research Services
have outlined the following three "true SaaS vendor" criteria
No client-side installation
A single code for all customers
As discussed in
's previous article on BigMachines, the third criterion is not yet there
. To be fair, BigMachines' hybrid (in other words, not completely multitenant) architecture has the flexibility to allow customers to upgrade according to their needs and desired schedule, and not necessarily when the vendor decides to upgrade them or another of the customers wants to upgrade.
The architecture also has the flexibility to tailor the UI to the unique needs of the sales processes of different customers and industries. These different users may require very different layouts of their configuration pages. Still, with a growing install base, the issue of managing multiple codes will become more painful and costly for BigMachines.
On a more subjective note, BigMachines’ recent success and its “premium brand” marketing and PR efforts, as well as accompanying attitude might not strike a chord with some more conservative prospects (with a “show me” attitude). Namely, Webcom or
often come across as more congenial vendors that talk the customers’ language (and issues), and focus solely on products functionality rather than lecture on their leadership and other competitors’ viability.
These vendors even offer their products to customers for a free trial (“test drive”) to check out for themselves. For existing users, check out Webcom proactively bouncing new enhancements ideas off customers on
, such as the
Quote Collaboration and Analytics discussion here.
BigMachines says it regrets any possible miscommunication or misperception circumstances where prospective customers might have felt that the vendor didn’t “talk their language” or didn’t focus on product functions. Many of the vendor's customer engagements begin when its staffers come onsite to prospective customers and participate in a
“Breakthrough Opportunity Analysis (BOA).”
BOA is an in-depth review of the company's current and future business processes and challenges, essentially to understand the company's language (vernacular) and needs, so that BigMachines can recommend the solution that will provide the most value in the specific instance. The vendor only charges prospects for its travel costs, and it provides this basically as a free consulting service to help it understand the prospect's business (so as to best serve the company). Many customers typically express appreciation for this process and reportedly tell BigMachines that it is going above and beyond to meet their needs and speak their language.
More specifically, BOA is a two-day workshop that helps a prospect’s cross-functional team evaluate the need for business change to improve and streamline their sales processes. BigMachines experts, deeply experienced in
techniques, work together with the prospect's management team to
identify opportunities to reduce
selling general and administrative (SG&A)
expenses and grow revenues, based on the company’s current sales and engineering processes;
outline goals and value levels of sales process improvement initiatives; and
determine the strategic vision, including weighing potential options, for their BigMachines deployment.
In terms of “bouncing new enhancement ideas off customers on Facebook,” BigMachines does this as well on its My Big Idea portal (mentioned above) on its
Customer Support Site
. The vendor also presents its product roadmap to its customers at the annual BigIdeas conference and lets customers vote on their top ideas. BigMachines identifies customers' top choices and commits to implementing their top requests in the next major product release.
Growing Fast Enough?
While BigMachines' financial performance is reportedly already cash-neutral (break-even), reaching premium brand status certainly did not come at a small cost. Yes, 170 customers is impressive, but taking into consideration about US$40 million in
venture capital (VC)
investments (mainly by
Vista Equity Partners
) thus far, the average customer acquisition cost has been around $250 K. This figure is not that impressive when compared to Salesforce.com's,
’ install bases, given the similar initial VC investments before those companies went public.
As pointed out in
my earlier blog series on SaaS
, investors and venture capitalists can be patient only if a SaaS company grows with an acceptable CAC (customer acquisition cost) ratio. For example, an unacceptable CAC of less than 0.5 would mean that it takes over two years to recoup the cost of acquiring a new customer.
For example, Webcom is a much smaller company with no venture capital involved, and its CAC is much higher than BigMachines’ despite having only about 60 customers. In addition to
, the “shoestring budget” vendor has meanwhile even delivered another product line,
, in the business process management (BPM) space
. Along similar lines is Experlogix, which even prefers to remain in stealth mode, and relies on extremely close relationships with a number of Microsoft Dynamics resellers while having about 150 Dynamics reference customers and about 400 reference customers within
’s ERP ecosystem.
As for FPX, despite a number of recent management changes, office closings, bankruptcy filings, and the fact that as a former public company its customer base and revenues are still much smaller than BigMachines, I would not just dismiss the vendor, now under new management. Its longevity and experience in the market, as well as the product’s global capabilities and intimate integration with Salesforce.com CRM, are some aces up the vendor’s sleeve. If nothing else,
the rumors and indications of FPX’s new owners hinting possible patent infringement litigations against competitors
can cause some stir amid customers and unwanted distraction to all vendors.
’s CEO Chris Cabrera, who has recently digested a former direct competitor in the on-demand sales compensation space
, recently commented on my abovementioned blog post:
“VCs will be patient with a young SaaS company that is not profitable but growing over 100 percent per year. When the timing is right these companies can dial back the growth rate (and dramatically reduce expense) to a more modest 30 percent and achieve profitability. It’s all about timing.”
Thus, it will be interesting to watch the future growth trajectory at BigMachines. The SaaS Q2O market might be ripe for some consolidation, and it would not too terribly surprise me to learn that BigMachines might be attracted to acquire a competitor, and thus increase its install base even more (and significantly reduce its CAC). For a more exhaustive list of Q2O players, see
’s earlier article entitled
Quote-to-order: The Major Players in the Manufacturing Arena.
Dear readers, what are your comments, thoughts, suggestions or individual experiences with the abovementioned vendors’ Q2O and CPQ workflow-based tools and like? How do you handle your sales processes? Manually? In an automated way? Somewhere in-between?
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