Web2.0, SOA, SaaS – there are similarities and vast differences but what they all have in common is that MV business applications are generally not prepared for any of them. I’m looking for a good accounting system that can be used in the modern business world. If you have one, let me know. If not, here’s how you, the VAR and application developer, get from here to there. (EDIT: This is a “bonus” Part 4 of what started as a 3-part series.)
Traditional MV apps are installed on dedicated servers within a corporate network. People in the Accounting department use a character interface to enter a Customer record, then create Orders, generate Invoices, and later apply cash receipts. This is the way business software has been used for 30 years.
New “Web2.0” businesses offer some service via the internet, where a consumer from some part of the world creates a new account for themselves. They apply credit to the new account using yet another service like PayPal. Then transactions are processed against the account. Some services limit transactions to the open account balance, rather than operating on credit. If the available balance gets low, the user is sent a message and encouraged to “re-up”. In this model the company doesn’t have a real relationship with customers. There is often no inventory. Sales people don’t negotiate agreements in specific territories. Customers can close their account at any time, by themselves, or simply not refresh their account, which then gets automatically closed after some period of inactivity. You know what I’m talking about because you use services like this every day!
Just about any MV app could serve as a back-end to that scenario. MV apps are rich with business rules developed over decades, compared to relatively new applications developed largely by people more familiar with programming than a diversity of business practices. What’s missing are the web interfaces into the app. The result is a huge number of accounting “solutions” which lack basic functionality, a huge number of companies jumping from one system to the next to chase features and better pricing, and a huge number of Pick/MV software vendors getting more hungry as each year passes.
How do we match demand with supply?
To get from a traditional app to Web2.0, a MV application developer needs to do a few things:
- Strip off the character UI (CUI). You can re-fit the app with a new CUI or GUI later.
- Replace the CUI with an API. How? Hey, I’ve already provided that info here! If you’re still looking to put a GUI on your app you’re a generation too late. Today you need an API for which you can later add a GUI if you want, but given the plethora of browser, devices, and other methods by which software is accessed, you can’t know what kind of GUI a prospect will want, and with technology changing so fast whatever you create will be obsolete half-way into your development. So at this point it’s better to skip by the GUI part and just create an API.
- Market the app as a service rather than as an application for corporate use. Host the DBMS and app cloud servers so that any company can make immediate use.
With this model you will see a change in the nature of your business.
- With this model you are actually changing your audience from end-users to developers.
- You are no longer selling an application, you are hosting a platform.
- You will sell access to a large and complex application to developers, some small and some large businesses, who will build their “value-add” offerings over your platform. These businesses are the ones that will offer some service to a large number of consumers.
- Your business model needs to have per-month pricing, tiered by number of customers, number of transactions, total cash volume, or some other metric which you believe is equitable.
- You need to plan for a reseller channel which needs to embed your costs into their own pricing model, a cost-plus system which they will find attractive and not a cost-prohibitive burden.
- You aren’t looking to make a killing by selling one system to one company. You’re looking to sell your application as a service to a large number of tiny companies, and at a rate which they can easily afford.
You don’t need to reverse your business model. You can add this new model to your current offerings. Sell your software to manufacturing companies and sell it as a hosted SaaS platform! You can also add the GUI you’ve always wanted, and host the application as an online solution just like FreshBooks, Harvest, Blinksale, Quickbooks, Zoho, and so many others. (See this article for links and a summary on some of those.)
How do you market your service? Just look at those other offerings. All of those offerings consist of a browser-based UI for small companies to do their accounting. I think that space is already crowded for basic accounting, consultants looking to invoice their time, web developers looking to bill for projects, etc. But few of them offer really deep rules, and only a very few offer an interface which allows developers to tap into the rich accounting platform. That is what people are asking for now! Freshbooks has an API that can support businesses completely outside of their browser UI. As they added the API to augment their browser UI, so should MV developers add an API to augment their character UI.
The only difference between MV companies and a company like Freshbooks is that at Freshbooks they started the company within the last couple years knowing they needed to do this, while in the MV space we need to educate long-term developers about the concepts and then convince them that there is value. Over the years this process of education and convincing has taken longer than technology cycles. The result being that by the time a MV company decides to take action, the technology has changed, the solutions are in flux, and a whole new wave of competition has already leaped forward – so the education and decision process needs to start all over again. Anyone who has been “thinking” about GUI for the last 15 years understands this process, as well as most of you who have made various attempts over the years to put a GUI on your app.
While other companies are in the process of improving their rules, this market already has all of the rules. All Pick people need to do is to provide access into those rules, and then make the platform available to new audiences who need it.
I will be happy to provide services, and perhaps partner toward the success of companies that wish to take steps in this direction. Contact me to discuss options.