I don’t often have the pleasure of talking to as interesting a set of customers as I met at the recent Acumatica Summit in Las Vegas. Not just because all the meetings were unstructured, no artifice, no-handlers-present conversations – which means that everyone, customer and analyst included, can truly get the most out of a relatively short interaction. And it wasn’t just because none of them really wanted to talk about GenAI, or any other kind of AI for that matter, which was a relief after the incessant AI yowling that has seemingly turned the entire industry into a mouthpiece for fantastic claims and soon to be realized massive disappointment.
The real pleasure from talking to Acumatica customers comes from the fact that these companies, all small and medium enterprises, many located in what is sometimes derogatorily referred to as the “flyover” regions of the country, tend to be the kind of mom and pop – literally, in many cases – companies that genuinely reflect the “lifeblood” (the term Acumatica’s CEO, John Case used in his keynote) of US economic activity at a scale that’s highly relatable. This was a conference populated by a huge range of companies from the heartland – another somewhat biased term – making the things and providing the services we don’t necessarily read about in the business section of the national news. Absent were the usual gang of over-capitalized EV manufacturers, over-hyped GPU chip makers, way over-hyped VR/AR headsets, over-priced blockbuster drugs, under-regulated aircraft manufacturers, way under-regulated global financial services companies, and the rest of the so-called titans of industry that, one could argue (as I’m about to), capture a lot more of our attention than they necessarily deserve.
Instead, I had face to face meetings with companies from Nebraska, Pennsylvania, Indiana, and Vermont, as well as Texas and California, representing a wondrously varied set of businesses: recycled plastic furniture manufacture (Polywood, Syracuse, IN), seeds and bulbs (American Meadows, Burlington VT), data security, hydroponic farming, craft brewing, and restaurants (all three under one corporate roof at Telesis, Lincoln, NE), high-end pickup truck gear (Diamond Back Covers, Philipsburg, PA), tubing and piping for oil and gas drilling (OFS International, Houston and Odessa, TX), portable industrial cooling (Portacool, Center, TX), and asphalt surfacing services (American Asphalt, Hayward, CA.)
To a man and woman the people I met at the Acumatica Summit were really nice people doing things that they genuinely loved, and while that’s not particularly unusual, there was something about this crowd that felt a little different. Here’s why: I’m an inveterate road-tripper, and have crisscrossed the country at least half-dozen times, not to mention dozens of shorter trips, mostly on “blue highways” far from the soulless interstates. I’ve been in towns like Syracuse and Philipsburg and Lincoln, lots of them. And in every town, on every trip over the last 40 years, I’ve met really nice people doing things they genuinely love, who constantly reminded me that the country isn’t just made up of big cities, big companies, and, in the business world, big ego-centric tech bros and “whiz kids” making a killing on the next “cool” thing, all striving for their billion-dollar exit.
Indeed, it’s refreshing, and maybe even a little reassuring in these times of political and social divisiveness, blue state/red state polarization, and a social media culture fine-tuned to foment anger and hatred, to wander around a conference full of people from all over the country who have a whole lot more in common than one might believe by reading the click-bait front pages of all those newspapers with their business pages focused on EVs and GPUs and AR headsets ad nauseum.
(My perception that commonalities are more dominant than differences is borne out by The Harris Poll’s recent New Connection Index survey, which highlighted the following results:
- 76% see the good in those they disagree with
- 71% have a friend who doesn’t share their views
- 57% think the “culture wars” are overblown in terms of how important the issues of those debates are to daily life
- 57% think most Americans get along with one another
- 56% believe that opportunities exist for nearly all to attain the American dream.
For the most part these majorities held fast regardless of the respondent’s race, age, or gender. Kind of interesting to have caught that vibe at a tech conference, though, in Acumatica’s case, I don’t think it’s a coincidence or a statistical anomaly.)
This isn’t just an exercise in wistful nostalgia about a by-gone, small-town American dream gone sour. These companies mean business, they’re ready to compete, and they showed up in Las Vegas at the Acumatica Summit looking for the technology and new business processes they need to drive their local economies, and the national economy, in ways that aren’t always obvious to those us overly influenced by the big picture global economy we’re hectored about from the lecterns of Davos and the IMF.
Some interesting themes emerged from these conversations, as well as from Acumatica’s executive presentations. Supporting heterogeneity is super important for these small customers, despite the fact that extreme complexity is often seen of as a big-company problem. There were a surprising number of companies using Salesforce for CRM, for instance, despite its much higher relative cost and much less customer-friendly licensing terms and conditions. No problem from the Acumatica side: The Salesforce logo featured prominently in CPO Ali Jani’s slide on Acumatica’s native integration capabilities. (Admittedly, while it was the largest vendor in the slide by revenue, the Salesforce logo was one of the smallest on the slide, a form of damning with faint praise that’s fine with me.)
Speaking of customer-friendly commercial terms and conditions, Acumatica’s impressively simplified pricing and licensing model was the topic of keynote-stage accolades and one-on-one conversations. Allowing unlimited access to Acumatica, as opposed to playing the licensed user game, isn’t just a smart piece of marketing. It’s an acknowledgement that SME employees wear many hats, and restricting their use of valuable enterprise software because of licensing terms and conditions is just a bad way to serve these customers.
(For some more color and product details, as well as references to Acumatica’s pricing and licensing model take a look at Jon Reed’s take on the Summit. Jon and I also did a podcast on the Acumatica Summit, in which we elaborated on this and other issues.)
Customer friendliness was also front-and-center, literally, on the keynote stage with the Portacool vice president of operations telling the story of how Acumatica stepped up to help when a fire burned down a major facility by giving Portacool a three-month moratorium on paying for their Acumatica subscription while they pulled themselves together.
The flexibility of Acumatica to use technology to meet the specific business needs of its customers also came up in numerous conversations. This ability is, of course, basic table stakes in the enterprise software market, but there’s typically a price to pay from most vendors in complexity and cost that can be quite onerous for small and medium-sized companies. American Meadows, for example, takes orders for tulip bulbs in April when they’re in full flower in the field but delivers them as bulbs in time for the fall planting season. But that same customer may also order seeds they want to plant in the spring, meaning that part of the order has to be fulfilled and shipped immediately. Calculating variable tax rates, handling revenue recognition, splitting orders – that’s supposedly the stuff of big complex companies, but there’s American Meadows using Acumatica to run the show.
Handling that “big company” complexity can bring big company problems, however, and many of Acumatica customers are dealing with “big company” customization hangovers as well. Customizations and upgrades mix like oil and water, and dealing with the bi-annual pace of Acumatica’s SaaS upgrades is another “big company” problem that bedevils the Acumatica customer base as well.
Another issue that came up more repeatedly was the problem of putting Acumatica’s technology in the hands of end-users or the customers’ customers – not as an Acumatica-caused problem, but one worth mentioning nonetheless. The somewhat disparate businesses of oilfield pipeline services and pouring asphalt share a similar need for end-customers to take measurements in the field: The highly important question of how much rebar was delivered and how much was used at a parking lot site, or how many linear feet of piping is needed to line a specific well often boils down to the ability of a supervisor pouring asphalt or a wildcatter drilling for oil to capture the relevant data on site and then use Acumatica to manage the fundamentals of optimizing quantity, quality, and cost of a vital component of what its customers provide to their customers.
Turns out that’s hard to do, and to be clear that’s in many ways more of a business process problem than a technology problem – both American Asphalt and OSF International told me Acumatica’s technology was up to serving both side of business process and technology challenge. The problem was more about getting the third leg of stool – the people in the field at the job site or wellhead – to both want to use the tech and to then use it correctly. That’s usually the harder part of the problem to solve, admittedly. But at least the tech side, Acumatica, is an enabler, not a barrier.
Importantly, Acumatica realizes that companies of all sizes are increasingly becoming multi-channel, multi-vertical, cross-industry companies – the lines between manufacturing, distribution, logistics, retail, and services are increasingly blurred. For the SME customer, it’s essential that a vendor like Acumatica provide as much support for these capabilities as possible and help prevent them from having to manage a complex, siloed, multi-vendor infrastructure. In that regard, it was reassuring that from a product standpoint, Acumatica and its Marketplace ISV partners are moving forward across Acumatica’s main verticals with a good amount of new functionality, like improved field reporting and analytics, order orchestration and other advanced warehouse management functions, CPQ, product configuration, distribution planning, enhanced Shopify and Amazon integration, new payment gateway support – there were way too many new features to focus on here. Suffice to say there’s lot of good reasons for small and medium-sized companies looking at solving their cross-industry challenges by looking at what Acumatica has under to hood or on the way.
There is one main challenge for Acumatica in keeping this customer-friendly ship on an even keel: the partner channel. There’s nothing like an active partner channel to fuel rapid growth – well-trained and well-supported partners can hugely multiply sales and services – and customer satisfaction – at a rate that’s usually worth every margin point they’re given. But there’s risk when overdependence and fast growth start to stretch the channel too thin: Maintaining partner quality and consistency is a challenge for every software vendor, and is increasingly a point that I counsel vendors to ignore at their own peril. So it was no surprise that I heard rumblings among the customers I spoke to that Acumatica needs to work a little harder on renewing and reinvigorating its partner channel and ensuring that customers have enough choice.
The problem with the kind of growth and success that Acumatica is having is that it drives up the value of individual consultants, which in turn drives salary creep and churn and a revolving door syndrome that threatens every successful channel partner for every successful vendor. This is problematic in every vendor ecosystem, but the risk that project failure brings to the SME customer base that Acumatica serves is particularly acute: getting it right the first time is essential, and any weak links in the partner channel can threaten to upend the customer success that Acumatica has so rightly deserved.
Partner issues notwithstanding, the Acumatica Summit was a breath of fresh air for the travel and vendor-hype weary analyst. How Acumatica solves customers’ business problems with a combination of great technology and customer-friendly business practices can serve as a template for how it’s possible to do right by the customer and run a successful enterprise software business at the same time. And while not being beholden to the public equity markets can be part of why this is possible, private equity owners aren’t in the game for the good vibes either.
In many ways this makes Acumatica look more like the companies it serves than most of its competitors – small and scrappy, with eyes on the prize and on the impact they make in their communities. It’s nice to see that side of our industry succeed every once in a while.
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