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Two Force.com Apps Joining Forces at Dreamforce 2010

Written By: Predrag Jakovljevic
Published On: January 4 2011

One of the major takeaway messages from salesforce.com’s recent Dreamforce 2010 conference was the company’s diversification within the platform-as-a-service (PaaS) space. Namely, during their keynote presentations, the company’s executives admitted publicly to the Force.com platform’s proprietary nature (i.e., the non-mainstream Apex language), which made them decide recently to decouple the application development layer from the database layer in the cloud (the latter called database.com).

The application layer has been further broken down into several cloud-based application building flavors. To that end, there are the following application development environments that cater to different user constituencies and developer language preferences: 

  • Appforce – to develop departmental applications on Apex

  • Siteforce – to effectively create special (often temporary and promotional) Web sites

  • VMforce – to develop Java-based applications

  • ISVforce – for third-party providers’ applications that can be developed in any commonly used language

  • Heroku – to develop slick consumer-facing applications in Ruby on Rails

The latter PaaS piece came from salesforce.com's very recent acquisition of Heroku, a San Francisco start-up that provides a hosted development environment for applications built in the Ruby programming language. The hefty price that salesforce.com paid for Heroku might indicate salesforce.com’s keen intent on supporting Ruby, which is popular among Web developers, as the logical expansion of the Force.com platform.

There Is Still Much Action Left for Force.com

While some observers might have jumped to the conclusion that salesforce.com is now de-emphasizing Force.com and Apex in favor of Java or Ruby, I’ve seen a number of independent software vendors (ISVs) continuing to build their solutions on the platform (recently renamed Appforce). In addition to Glovia’s glovia OM, Xactly Corp’s Xactly Express, and Callidus Software’s Commissions Manager products from previous years, Dreamforce 2010 saw, inter alia, BigMachines’ brand new QuickConfig solution and Ariba’s intention to build its contract management solution in Apex (despite its prolonged expertise in Java, and perhaps a more logical VMforce route). 

Moreover, on the first day of the Dreamforce 2010 conference, two of the most prominent Force.com partners announced the first application merger driven by the shared cloud platform. Does the first Force.com-based acquisition emphasize the staying power of salesforce.com's Force.com ecosystem?

Who Bought What?

FinancialForce.com, the up-and-coming provider of cloud-based accounting solutions, announced an agreement to purchase PS Enterprise, the cloud-based professional services automation (PSA) solution from Appirio. The acquisition will extend FinancialForce.com's strategy of providing complementary solutions built on the Force.com platform. Together, the two solution sets create the first comprehensive solution for services for project-based companies on the same cloud platform.

Some may remember that FinancialForce.com (formerly Coda 2go), a hit solution at Dreamforce 2008, was launched around Dreamforce 2009 with substantial minority backing from salesforce.com. FinancialForce.com is backed by two of the biggest players in the applications business: the majority stakeholder UNIT4 (NYSE Euronext: UNIT4) and salesforce.com (NYSE: CRM).

The acquisition aligns well with the strategies of both owners, as UNIT4 has a strong focus on solutions for services-based organizations (via its traditional Agresso Business World [ABW] and CODA Financials offerings). For its part, salesforce.com also has deep penetration in the services sector.

Prior to this acquisition, FinancialForce.com’s applications were designed for growing organizations, helping them to align Finance, Sales, and Service departments in a way that enables them to increase both the bottom line (profits) and revenue. The expertise behind the company is based on 30 years of experience in developing accounting systems (i.e., CODA Financials). For more information on the company’s state of affairs in mid-2010, see TEC’s related blog post.

For its part, Appirio is a 2006 startup public cloud evangelist company that already has over 200 employees and thousands of customers. In addition to PS Enterprise, Appirio has built a suite of cloud-to-cloud connectors, and recently introduced a cloud broker technology called CloudWorks that brings together cloud platforms such as salesforce.com, Google Apps, Workday, and Amazon Web Services (AWS) as a way to help enterprises build cross-cloud solutions.

CloudWorks is a standard broker technology on which Appirio (or others) can build solutions that connect different cloud platforms. It does use pieces of other cloud platforms, but is more about bringing them together (unified security, identity, common data definitions, etc.) than building on top of them.

Since its launch in 2009, PS Enterprise has garnered over 10,000 professional service employees as subscribing users. The product, which has been used internally by Appirio, features Salesforce Chatter and Google Apps extensions for real-time collaboration, providing service companies with the ability to follow their employees, customers, projects, and related transactions

Unlike the cloud PSA applications acquisitions that NetSuite has made (i.e., Open Air and QuickArrow, all of which are on different platforms), FinancialForce.com and Appirio PS Enterprise are literally embedded together on Force.com. In other words, the line between the PSA, accounting, and salesforce.com's CRM (customer relationship management) functions is indiscernible.

As a result, services companies will be able to run all of their core systems, i.e., marketing, sales and customer management; project-based services management and delivery; and accounting and reporting, on a single solution. Customers should benefit from having their data and their applications on the same platform by improving their business processes and giving them real-time visibility and reporting across their entire operation.

On the other hand, by taking advantage of FinancialForce Billing, Appirio PS Enterprise customers can now make the process of invoicing and collecting cash more swiftly, thus maximizing cash flow during the lifecycle of a project. Both solution sets will continue to be sold and supported separately by FinancialForce.com. PS Enterprise will continue to be integrated with customers' existing finance systems, both cloud-based and on-premise.

FinancialForce.com and Appirio Speak Out

For more information and opinions on the merger, see Dennis Howlett’s blog post. What follows now is my dialog with Jeremy Roche, president and CEO of FinancialForce.com and Todd Bursey, outgoing VP of PS Cloud at Appirio, who will be joining FinancialForce.com (together with eight professional resources from Appirio).
PJ: Would you please elaborate on any process scenarios that you envision being enabled by the integration of FinancialForce.com and Appirio PS Enterprise? Are there any joint customers?

JR: Our strategy is to continue selling both modular and end-to-end solutions. So in the back-office space, we will continue to do accounting, billing, sales orders, etc. We will continue to offer PS Enterprise as a best-of-class PSA application and expect to continue to integrate to other finance apps. We will not close it off to just FinancialForce Accounting.

At the same time, we have already completed the first phase of integration between the apps. So customers or future customers of PS Enterprise can now extend it by the addition of FinancialForce Billing, FinancialForce Order-to-Cash, etc. We have more integration work to do, but the first phase is complete.

In a nutshell, we are able to offer best of class solutions in the salesforce.com style, but also an end-to-end solution for services businesses, of course combined with the Sales Cloud 2 and Service Cloud 2 from salesforce.com.

TB: There are no joint customers at this time of the conference, but we believe the change in ownership might change this. The combination of PS Enterprise and FinancialForce.com offers a more complete solution to companies of any size and gives customers the opportunity to run their entire business on Force.com. At the same time, enterprise customers also have the benefit of turning on only the pieces that they want allowing them to use the current financial system of record but surface more financial data in salesforce.com CRM.

Both products are built natively on Force.com so they are already fully integrated. Appirio will continue to use PS Enterprise to run its services organization, and we expect FinancialForce.com to be a CloudWorks solution partner so that Appirio can bring contextual PS Enterprise and FinancialForce.com information into a customer’s email, calendar, or mobile device.

JR: An update here: in the weeks since Dreamforce 2010 we have already signed up the first joint customers and expect to be signing more over coming weeks.

PJ: In light of our recent discussion on FinancialForce Chatterbox (see the related blog post for more information), how has Chatterbox been doing (in terms of traction, adoption, etc.), and will it play any role in this integration?

JR: We have a number of customers of Chatterbox and continue to offer it free of charge from the AppExchange marketplace. All of our apps are automatically enabled for Chatter and therefore Chatterbox, so it can be used in similar ways of PS Enterprise as it can over other apps. For example, the solution could produce the following alert: “A Project X is going over budget, please add the necessary team to follow it.”

PJ: Both FF and Appirio are native to Force.com, and PS Enterprise was also “Chatterized.” Can I assume that the integration will be a breeze?

JR: Yes, both products are Force.com-native and written in the same language (Apex and VisualForce). The first phase of integration is already complete and PS Enterprise can now bill for services through FinancialForce Billing. We will be doing more integration work over time though and this is currently being designed. PS Enterprise was already using Chatter natively as is FinancialForce.com. An advantage of being able to make a cloud acquisition in the salesforce.com ecosystem is the following: all apps are already on one platform with no necessary redevelopment to get everything onto one platform.

TB: We have always known that there were benefits to developing on Force.com, the ones people hear about everyday. But the fact that PS Enterprise and FinancialForce.com are both native to Force.com was another strategic reason for the acquisition - integration comes on day one. Chatter is already integrated as part of native Force.com apps, all customers have to do is choose to turn it on.

PJ: Why is Appirio selling this solution? Is the company now focusing on building cross-cloud solutions (CloudWorks) on top of marquee cloud platforms and cloud consulting (with the latter offering making Appirio similar to Astadia Consulting)?

JR: While PS Enterprise has been very successful as a standalone PSA solution, it is an even more compelling solution in combination with FinancialForce.com's financials solution (accounting and billing), also built on Force.com. Think of the following two reasons:

  1. These solutions together, managed by one company, give services organizations of any size a more complete solution to tackle how they obtain the work, do the work, and bill the work.

  2. This acquisition gives customers a more complete solution, gives FinancialForce.com a successful product with great market potential, and enables Appirio to focus its product portfolio on bringing cloud platforms together, not building a single application for a specific market.

TB: FinancialForce.com is an apps development specialist with a global footprint, who will apply its deep domain expertise to further develop and take PS Enterprise to a broader market, which is another win for customers. Beyond the customer benefits, for Appirio it is also a matter of focus.

Appirio’s product strategy has evolved in the last few years, focused more on bringing different cloud platforms together (cross-cloud integration), such as what its is doing with CloudWorks, versus building a single application for a specific market. It was challenging in the long term for Appirio to maintain a dedicated staff and feet-on-the-street for a PSA product with a vertical market focus (given the company’s broader cloud computing charter).

PJ: Who will sell the integrated product now, and how is the channel ramp-up going?

JR: FinancialForce.com will be taking on sales and will be bringing across sales staff as part of the agreement. Appirio was already in discussion with channel partners for the product and FinancialForce.com is now involved in those discussions. We expect to have channel partners that focus solely on PS Enterprise as well as ones that deal with the full suite of FinancialForce.com products including PS Enterprise.

TB: The acquisition is expected to close in January 2011, so some details are still being worked out. However, Appirio will continue to deliver services around PS Enterprise, and both Appirio and FinancialForce.com will work together to ramp up the partner delivery ecosystem both domestically and internationally.

PJ: How will you ensure that FinancialForce.com doesn't slip through the cracks into a sort of a "no man's land" (which can easily happen with two co-owners, such as salesforce.com and UNIT4)? In other words, what will these co-owners do to help with regards to sales, marketing, channel, etc. efforts, or do you as a CEO have a free reign?

JR: The Board of FinancialForce.com is made up of me as CEO and President, with Edwin van Leeuwen (CFO of UNIT4), Chris Ouwinga (CEO of UNIT4), and George Hu (EVP, Platform and Marketing of salesforce.com). Both salesforce.com and UNIT4 are providing guidance, infrastructure, and back up support for the business as well as holding Board positions.

Executing is down to me and the FinancialForce.com’s team with their support. This to me seemed the most logical approach, as we get not only the support and backing of two large businesses, but also the encouragement and latitude to create the FinancialForce business in its own right.

PJ: How will the new product (with Appirio PS Enterprise) be called: FinancialForce.com, Appirio, some combination, something brand new?

JR: We won't use the Appirio brand, since that has remained with the majority of the Appirio business that we did not acquire. We will continue with the PS Enterprise product name for the time being whilst we revisit branding and re-positioning as part of the FinancialForce suite of applications.

I was tempted to ask one more question, but I decided to bite my tongue for now. Namely, by perhaps acquiring (or embedding at least) the abovementioned order management application on Force.com from Glovia, FinancialForce.com could even match NetSuite’s capabilities in manufacturing as well (where NetSuite embeds Rootstock Software). But then the FinancialForce.com name would be somewhat underwhelming, plus, I am sure that the vendor wants to go one step at the time, and first see how PS Enterprise will pan out.

Dear readers, what are your comments and opinions with regards to professional services in the cloud? I would certainly be interested in your experiences with cloud software in general and with FinancialForce.com and Appirio in particular.
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