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Corporate Performance Management in the Cloud: A Spotlight Q&A with John Herr of Adaptive Planning

Originally published November 9, 2012

This BeyeNETWORK spotlight features Ron Powell's interview with John Herr, CEO of Adaptive Planning. Ron and John discuss Adaptive Planning’s exceptional growth and look at the market forces that are driving this growth.
John, Adaptive Planning continues to grow at an exceptional rate, with now more than 1,400 customers. What do you attribute this growth to, and what is your market outlook for corporate performance management or CPM?

John Herr: Fundamentally, we are disrupting the CPM market. Today’s financial executives are frustrated with the existing solutions, and they're looking for something new. We're fast, easy, affordable and there's no IT required so we provide the best of both worlds. We're pulling new customers out of Excel where we're a significant upgrade in capabilities, and we're also pulling new customers out of legacy enterprise software, which, as you know, is complex, expensive, and very IT intensive. As we disrupt this CPM market, we're seeing our growth rate accelerate. In addition to that, we raised $22 million in new funding this year, which we're investing in our growth. All of these are all very favorable things for us.

It's always great to be a disruptive technology. Some companies initially were hesitant to trust their financial data to a cloud solution. Are you still finding resistance from customers because of the cloud?

John Herr: The cloud has gone past the tipping point, and now it's going mainstream. The issue of financial data in the cloud was a significant topic three or four years ago, but it no longer is a major issue for our customers. In fact, we now have more than 1,400 active customers and 40,000 active users all over the world. The issue of financial data in the cloud has melted away as customers see how safe and secure the cloud is and then learn about all the capabilities and benefits that Adaptive Planning provides.

In the past, your customer base was mainly midsize enterprises. Are you seeing interest from large enterprise customers as well?

John Herr: We are seeing accelerated interest from the enterprise. Today, over 20% or of our new business comes from enterprise customers, which we categorize as organizations with over $1 billion in sales. Now they could be departments or divisions of much larger companies, a standalone company, a nonprofit, or a government agency. The enterprise customer segment is the fastest growing part of our business today. Like other cloud companies, we saw the cloud first take off with the middle-market and English-speaking countries. Now, we're seeing growth in the middle-market and in the enterprise in countries all over the world. We have partners and customers today in 65 different countries around the world.

From an industry perspective, are there industries that are adopting cloud CPM more readily than others? And if so, can you give us some examples?


John Herr: While we have customers in virtually every industry, we’re particularly strong in the manufacturing, healthcare, retail, software, business services, financial services and nonprofit sectors. What we see is there is a common need for better budgeting, forecasting, and also planning and reporting among these companies. It really cuts across categories and, frankly, company size too. We have companies as small as $10 or $20 million in revenue who are customers, and then we have other companies that are $50 to $100 billion in revenue who are customers. The common need is better planning and business management, and it really cuts across a broad swath of industry verticals, company sizes and countries.

All companies today want better planning, budgeting and forecasting, which does not surprise me. What does the recent acquisition of MyDIALS do for Adaptive Planning and your customer base?

John Herr: We're very excited about myDIALS. We've been an OEM partner with them for more than a year. We're fully integrated with myDIALS, and we already have many joint customer wins. We had the opportunity to acquire myDIALS to come together as one, and it's going to dramatically accelerate our product roadmap into visualization and business intelligence (BI). Our core market as we measure it by CPM is the better part of a $6 billion market. The BI market is an $18 billion market. So put together, our addressable market is now north of $20 billion.

With myDIALS being part of our company, we can now move much faster on the product roadmap, have a much tighter integration, and deliver more benefits to our customers sooner. The early response from our customers has been very, very positive. As you probably know, myDIALS provides our customers access to powerful yet intuitive cloud-based visualization and BI capabilities, and was ranked number one in the Gartner Magic Quadrant Customer Survey as well, so it's a real leader in cloud, BI, and visualization, and it's just a natural extension for us. We’re very excited to have myDIALS as part of the family. It's going to be a great benefit to customers for years to come.

One of the reasons MyDIALS ranked highly on the Gartner Quadrant was that it was fast, easy and affordable. This is similar to your approach at Adaptive Planning, right?

John Herr: Yes, that's a good point. Part of our core value proposition has always been that software doesn't have to be so hard. There is a trend toward consumerization of business software that’s fast, easy, intuitive and doesn't require IT. The architecture and user experience of myDIALS and Adaptive Planning are very similar that way. That’s just one of the reasons that acquiring myDIALS and integrating them more tightly is really going to be a big benefit to customers.

Does the myDIALS integration signal a shift in how the businesses are consuming data and utilizing BI along with CPM?

John Herr: The two markets have always been pretty tightly tied together, meaning there's always been some pretty significant overlap. Our customers told us they wanted better capabilities in visualization, dashboarding, reporting, and drill downs – all the things to make our analytics platform more powerful and useful and aid in data consumption, if you will. The module we launched – Visual Discovery – was something we view as really a core element of our CPM suite. We will also continue to go to market with myDIALS as a standalone product, which is really a BI visualization and discovery product. But as we look at the BI market, we'll address the pieces that most naturally touch our product and our customers, and we think myDIALS is a great example of that.

Earlier you mentioned myDIALS was an OEM partner. How do you plan on integrating myDIALS? Will it take a long time?

John Herr: It's already done. We are up, and live, and integrated as of this spring. The release is out. We've already had dozens and dozens of joint account wins. The good news is the products are already integrated, the teams have been working together for over a year now. We have hundreds of customers utilizing our free trial and then buying it.

What role do partners play in your growth and product direction?

John Herr: Well, we have the largest and most robust partner ecosystem in our space and that includes over 200 channel partners around the world. They drive over one-third of our new business, and we work with them closely to do that. These channel partners are SaaS companies that are influencers who refer or recommend us. Then there are both U.S. and international resellers and implementers who, as I mentioned, are located all around the world. They're an integral part of our go-to-market model. Our go-to-market model is really a high velocity sales and marketing model, and we view partners as part of the better, faster, way to reach out to customers. Partners add a lot of specialty and expertise. This could include a focus on a geography, a technology type, or a specific customer segment. So they’ve been a way for us to get more customers faster and enhance customer satisfaction, which is really critical for us.

Could you give us a couple examples of your larger partners?

John Herr: A good example is NetSuite. As you know, NetSuite is the leader in cloud ERP, and they're number one in their market. We are OEM’d inside the NetSuite ERP platform. So when you click on the tab that says NetSuite Financial Planning, that's actually Adaptive Planning. It's powered by Adaptive Planning. Together with NetSuite, because we have seamless integration, you can get to all your accounting data by drilling down into actuals. It's just a really easy thing for their customers to add. We have over 250 joint account wins with NetSuite, and that business partnership is growing very, very rapidly. I believe at this point NetSuite has more than 12,000 customers worldwide so there's a lot of opportunity for us to work together to help NetSuite's customers with what we do – corporate performance management and business intelligence.

Some other important partners that we do a lot of work with are Intacct in on-demand accounting, and Plex Online, a leader in manufacturing ERP for the cloud. We are also integrated with Salesforce.com. Those major SaaS players have been great partners for us.

Besides the growth in the cloud, what other major trends are aligning very closely with your products and your growth?

John Herr: Well, as a veteran of the cloud, the Internet and technology in general, I believe it's the most exciting time in my career because we are seeing the convergence of three very powerful drivers all at once. One is the cloud as we've been talking about. Another is mobile, and a third is social. Any one of these would be a revolutionary force in the technology industry, but taken together there's an exponential impact. As we look at what's driving the market right now, we see the convergence of these powerful market forces, and they're accelerating our growth.

When it comes to social, we're fundamentally a platform that's all about collaboration on budget, workflow, planning and forecasting. Increasingly, our users are consuming us with mobile devices. Obviously, we're 100% pure cloud. We're a SaaS company. So these trends and dynamics are really tailwinds at our back. For us it's an exciting time. It's a disruptive time in the marketplace. You're seeing the cloud fundamentally change software because it's such a big market disruption. We welcome the change because it's helping us grow faster.

Excellent. Is there anything else you could share about your product strategy going forward?

John Herr: Well, as we look at the roadmap, we're excited to have Visual Discovery out in the market today with our partnership and now acquisition of myDIALS. We'll be coming out next year with an enhanced consolidations product, and we think financial consolidation will be really helpful to our customer base.

And just in general, we're looking to accelerate our product roadmap to get more innovation to our customers faster. One of the beauties of the SaaS model is our 1,400 customers. By the end of the year, it'll be 1,500 customers. They all get a new fresh, improved version of our software every 90 days. We have four releases a year. Every single one of our customers all over the world gets that new and improved software automatically every 90 days. We're excited about what's going on in the product side. We're broadening our reach across the suite of CPM offerings, of course, and then we're starting to add some pretty interesting things on the BI front as well.

John, it's been a pleasure talking with you to learn about Adaptive Planning’s corporate performance management and BI focus.

  • Ron PowellRon Powell
    Ron is an independent analyst, consultant and editorial expert with extensive knowledge and experience in business intelligence, big data, analytics and data warehousing. Currently president of Powell Interactive Media, which specializes in consulting and podcast services, he is also Executive Producer of The World Transformed Fast Forward series. In 2004, Ron founded the BeyeNETWORK, which was acquired by Tech Target in 2010.  Prior to the founding of the BeyeNETWORK, Ron was cofounder, publisher and editorial director of DM Review (now Information Management). He maintains an expert channel and blog on the BeyeNETWORK and may be contacted by email at rpowell@powellinteractivemedia.com. 

    More articles and Ron's blog can be found in his BeyeNETWORK expert channel.

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