Fred Studer, whose resume includes stints at Oracle and Microsoft, as well as Chief Marketing Officer at NetSuite, has been named as the CMO of FinancialForce, a cloud ERP vendor built on the Salesforce Platform. Part of an executive renewal which saw a new CEO named earlier this year, Studer is exceptionally bullish about FinancialForce’s future in the present ERP market. He also sees the channel playing a key role in driving exponential growth for the company.
While FinancialForce completed a strong year, reaching a $100 million annual run rate while growing more than 40 per cent, the company has reshaped its senior executive team, appointing Tod Nielsen, most recently EVP of Platforms at Salesforce, as CEO in January.
“The previous leadership did a phenomenal job, and scaled to $100 million in run rate, but the board just felt the company was pivoted to go to the next level and would benefit from a fresh look and a new set of eyes to stimulate change,” Studer said. “The old CEO stepped up to one of the investment companies that helped fund us.”
Studer said that multiple things about FinancialForce were attractive to him.
“I’ve been at large enterprises before, but FinancialForce is a modern ERP cloud company, bearing in mind that the cloud has been around enough that there are legacy clouds out there,” he said. “FinancialForce also hasn’t gone through the inflection point of growing from $100 to $500 million, and I’ve never had the chance to do that. It’s also a chance to work with my longtime friend and mentor Tod Nielsen, who I worked with at Oracle.”
FinancialForce has a close relationship with Salesforce, but they are a separate company, not a subsidiary.
“They were one of our early investors, and we have built our technology to their platform,” Studer said. “We are the ERP to their CRM. But while it’s great to be associated with a very successful company like Salesforce, there are opportunities where a customer doesn’t want CRM or doesn’t want Salesforce specifically. We have a discrete value prop without Salesforce and regularly win standalone deals. We compete with Netsuite every day and we win.”
Despite this, Studer thinks that FinancialForce hasn’t been fully understood by the market.
“We have a very strong value proposition for companies in the 1000-5000 employee segment, which is where most of our employees are,” he said. “There’s so much more value that we can offer. We make it very simple for companies in the mid to upper mid-market to adopt cloud. Every CIO and CFO thinks about how to leverage cloud, but ERP migration is always an issue. We can safely and quickly move them from legacy systems, either cloud or on-prem.”
Other market dynamics are making more companies look at cloud, and FinancialForce in particular.
“Oracle’s acquisition of NetSuite and Microsoft trying to move companies to their Dynamics AX platform are issues,” he said. “There are also some new market requirements around compliance, and if companies’ systems don’t allow them to comply with new revenue recognition laws, they will suffer.”
FinancialForce’s channel is another reason Studer is optimistic about the company’s growth trajectory. Just under 50 per cent of deals won in FY 2016 touched partners in some way.
“I am a huge channel advocate,” he said. “Great Plains had built the Dynamics business entirely around channel partners before selling to Microsoft. I took my channel experience at Microsoft to Netsuite, which until then had been immature on its channel path. My vision here going forward is that that channel will be one of our biggest growth drivers. One of the mechanisms that will help us get to a $500 million run rate is complementing direct sales with a great channel.”
Studer said that the company’s senior management is also aligned on the important of channel, which is critical.
“Our CFO feels her biggest partner is the head of sales, and keeping the field team and channels growing and finding new sources of revenue are top priorities for her. That’s significant, that a CFO has moved from thinking just about costs to thinking about growth.”
Studer said that while FinancialForce already has a channel program, he wants to build a better one where the company can help partners build out their practice over time.
“We will be embracing new channel partners,” he said. FinancialForce is also in the final stages of signing a couple of significant global system integrators as partners, joining their national and regional partners.
There is a significant overlap of their partners with the Salesforce channel.
“We aspire to make overall financial management simple like Salesforce does,” he said. “The channel overlap with CRM is significant, although ERP is different, and partners have to be familiar with things like accounting practices.