News and Analysis

News and Analysis (15669)

TOUGH YEAR ON BIG RESELLERS?

Much of the summer was devoted to channel and vendor discussion of the demise of the MIS Group, Sage’s Partner of the Year for  the year ended September 30, 2008. And true, for that Houston-based business to exit was notable. Originally a Timberline VAR, it had grown by buying other Timberline VARs, but also MicroAccounting Systems and the Enterprise Resource Group, whose operations were centered on Sage’s MAS line.  But there are other signs that it’s not so easy being big. Early in 2009, Skyytek, which had been NetSuite’s largest VAR, and NetSuite, got into a nasty court fight about the circumstances regarding Skyytek’s exit from the NetSuite channel program. Then on July 14, Tectura, the largest Microsoft Dynamics VAR, filed a Notice of Exempt Offering of Securities with the SEC that said it had sold $7.5 million in securities on June 30 and that had another $2.5 million to sell. (It didn’t indicate that the sale of the remainder was inevitable.)  Tectura CEO Terry Petrzelka said the company swapped debt for equity to clean up the balance sheet.  But I don’t see businesses willingly giving away pieces of ownership lightly. On June 26, Qurius, a large Dynamics VAR headquartered in Belgium, announced it was seeking approval for a share issue valued at roughly $1.4 million “to meet a postponed acquisition payment.” Read more...

SPEEDTAX LOOKS UPSTREAM

SpeedTax says that much of the interest for its Internet-based sales-and-use tax system is coming from larger companies and that has led the Laguna Hills, Calif.-based vendor to enlist consultants that serve that market. “We've been driven or requested to move more up market,” says SpeedTax president Anton Donde, who continues that high-end consultants are making those requests because sales are drying up in the upper market. To make the move possible, SpeedTax has written an integration with SAP’s R3 platform.  Donde claims the feature set was already scalable and feature-rich enough to support large enterprises, but that SpeedTax lacked the channel that could serve them. Set-up fees, of course, will be higher and he estimated that fees for an SAP installation could be $30,000 or higher. Large end users will benefit from volume pricing since they will have a much larger transaction volume than mid-market users. Read more...

INTUIT FREEZES EXEC PAY

Intuit has frozen executive salaries and some bonuses for the current fiscal year which ends July 31, 2010. CEO Brad Smith's salary remains at $800,000, but his bonus of $828,000, dropped from $1.7 million a year ago. CFO Neil Williams gets the same $600,000 salary while his bonus dropped to $390,000 from $400,000 Kiran Patel, EVP of small business, gets the same salary, $700,000, while his bonus dropped to $550,000 from $800,000. The salary of Alexander Lintner, SVP of global business, stayed at $585,000 while the bonus fell to $237,000 from $585,000. There were some major changes since last year as Patel headed the consumer tax group a year ago. Sasan Goodarzi, SVP of financial institutions, received a salary of $540,000 and got a bonus of $290,000. The bonus awarded last year was $395,000. Read more...

LAST LOOKS AT KINTERA’S NUMBERS

Once we get beyond the need to do year-earlier comparisons, we probably won’t be seeing breakouts of financial results for nonprofit vendor, Kintera. But the 10-Q for Blackbaud’s second quarter ended June 30 show that its Kintera operations have been racking up revenue at a rate of just over $8 million a quarter since its acquisition by Blackbaud on July 8, 2008. For the most recently ended quarter, Kintera contributed $8.4 million of the $76.4 million company-wide, according to its form 10-Q filed with the SEC. Without it, Blackbaud's revenue would have decreased by $4.5 million, down six percent. Kintera added $6.2 million in revenue from hosted applications, $300,000 from analytic services, $400,000 for consulting and education services and $1.4 million in maintenance revenue. Since Kintera was primarily an online company, most of its revenue would have been subscription-based. Because Blackbaud also spelled out Kintera's expense impact and cost of goods, a decent P&L for its operations can be synthesized. Read more...

DELL’S NEW DATA DESTRUCTION SERVICE

Let’s not bore you with details, but when my profile wouldn’t load on my desktop computer, I called Dell tech support. After handing off control via Go-to-Assist, the tech rep informed me he was going to do a Restore on the computer, going back in time to some time the day before. He and the screen assured me that no files would be affected. After starting that process, the rep called my house to see how things were going. “Everything’s back to normal?” he asked warmly. “Well, no, some of the folders are in the wrong order. Some are missing. And you know what; I can’t find a single Word, Excel or JPEG file.”  Fortunately, after years of sitting through talks about backup, I had gone into the computer under my wife’s profile and did a backup using Clickfree before calling tech support. I made the rep stay on the telephone line for about 30 minutes as the device restored the data files and that they actually were intact. The only problem I’ve discovered is it didn’t backup the hand ful of Access files, but I had recent copies of those on my laptop. I could have destroyed my data, backed it up and saved $129. But you know, us amateurs should leave this stuff to the pros. Read more...

AVALARA HIRES CHANNEL EXEC

Sales-and-use-tax vendor Avalara has hired Anthony Zuanich as executive director of channel sales. He was most recently sales EVP at rival SpeedTax. Zuanich joined Bainbridge Island, Wash.-based Avalara at the end of July.  His resume including working as executive director of business processing outsourcing sales for Accenture and he was a sales manager at ADP. Avalara said his job will be building relationships with large resellers. And in July, Avalara named Blytheco, Sage’s perennial award winner, as its annual Business Partner of the Year. Read more...

VAR FEEDING FRENZY IN TEXAS

Refugees from the MIS Group are contributing to a realignment of the channel in Texas. Besides the Rand Group picking up seven former MIS employees including Don Zelesny, who led the MIS Group's CPA program., MicroAccounting Solutions, which had been purchased (well a couple of times) and ended up with the MIS Group, has reformed under Bill and Lorrie Harris with its headquarters in Dallas.  Three former members of Burch Consultants, including Randy Burch, have joined BCS/ProSoft, which is going after former Burch clients. Blytheco hired several former MIS employees and expanded offices in Dallas, Houston and Austin.
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QURIUS RESULTS DIP

Just to show you things aren’t different in Europe, Qurius, a large Dynamics reseller operating in several countries, reported a dramatic drop in earnings as sales declined for its quarter ended June 30. The net result (as termed there) fell to about $254,000, down 79 percent as measured in euros. Sales dropped to roughly $50.2 million, off 5.9 percent from a year earlier. About 44 percent of sales were in the Netherlands. The company said it is reducing subcontractor costs, jobs and other expenses, but didn’t break out details. Read more...

ADVENTURES IN SOCIAL NETWORKING.

Resellers and vendors are, like everybody else, jumping into social networking while trying to figure out exactly how to use these new tools.  The blog for Sage reseller Blytheco noted the company is now on Twitter and Facebook with a comment that “I see advantages for both, but do we need both? I’m just not sure.” Meanwhile, Blackbaud was giving away complimentary passes to its November user conference via its “Get Social” game. To win, participants follow clues on Blackbaud’s Twitter and Facebook pages and on its blogs. One problem was that the attack that took Twitter and Facebook offline recently interrupted this e-scavenger hunt and it needed a second kickoff before being completed. Read more...

CDC SOFTWARE NET DROPS

Newly public CDC Software reported just under $4 million in net income for its second quarter ended June 30, down from $5.9 million a year earlier as revenue was nearly unchanged. The Atlanta-based company held its IPO this month with its former parent, CDC Corp., based in Hong Kong, owning about 83 percent of its stock. CDC Software markets the Ross financial and Pivotal CRM applications. Revenue for the most recent period was $50.35 million, down from $60.61 million a year earlier. The company's guidance showed it expects 2009 revenue ranging from $197 million to $200 million and net income of $15 million to $18 million. CDC Software went public with the sale of 4.8 million American Depository Shares at $12 each.

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