When I was a journalist many years ago I discovered two very simple things that would let me stand out in a crowd and impress my bosses: the first was to tuck in my (clean) shirt, and the second was to turn articles in on time.
Pretty simple stuff, right? Not even that hard – though I admit sticking to deadlines does take some planning and hard work, but then again, that’s what earning a paycheck is all about, no? But the gist of the path to success as a tech journalist in the 1980s was relatively simple, and I was simply amazed at how the low the bar actually was and how often it was honored in the breach.
The path to customer success in the SME market is also relatively simple, and while many pretend they’re firmly on that path, the truth is that there’s still a lot of untucked shirts and missed deadlines. That’s why I was impressed with my conversations with customers at a recent event held by Unit4. This Europe-based enterprise software vendor got a boost of energy from the selection of cloud industry veteran Mike Ettling, most recently the head SAP’s SuccessFactors unit, as its new CEO. And with the arrival of Ettling an interesting little enterprise software company just got a lot more interesting.
While Unit4 may be unknown to most of us in the US, its brand is relatively familiar in Europe, where it was founded in 1980. Today its customer base numbers 35,000 spread across over 100 countries. One of those countries is not the United States to any significant degree, and that’s something Ettling wants to change. The path forward will involve some real investment in people and marketing, but the basics that will allow Unit4 to make its mark are already in place.
In the world of SME customer success, two factors stand out: the ability to meet customers’ specific requirements without requiring a huge investment in modifications and custom development, and the ability to support real customer success as a primary goal and not as an afterthought on the way to racking up another great quarter in sales. The customization issue is particularly important: While most enterprise software vendors are pitching fit to standard to the SME crowd, many are actually selling a broad horizontal platform that only gets down to specifics after a partner has stepped in to work its magic. And all too often the goal of the sales effort is to sell more software, not actually make the customer as successful as possible. This propensity for the mid-market to replicate the sales problems of the large enterprise can be particularly problematic for smaller companies that can struggle – and even go belly up – trying to absorb the costs involved in getting it wrong before the partner finally gets it right.
While no vendor can guarantee perfection, Unit4 starts out on the customer success journey with an important focus on four core industries: professional services, government, not-for-profit, and higher education. That focus means that fit-to-standard can be more easily built into the core product, giving the customer a product already fine-tuned for a specific industry that doesn’t have to rely on a partner to come up with and deliver last mile functionality.
This necessarily limits the total reach of Unit4 in competition with an SME vendor like Microsoft Dynamics or Netsuite, but frankly the total addressable market in those particular industries is plenty big for a company generating something north of $400 million in revenue every year. This is especially true in the US market that Ettling is interested in targeting: state and local governments in the US desperately need advanced enterprise software, just pick up the newspaper and read about how antiquated software and business practices have recently rendered cities like Baltimore, Fort Lauderdale, and Lake City, Florida vulnerable to ransomware attacks. Not-for-profit is another seriously underserved market. While there are some well-established players like Blackbaud already stalking the market, the opportunity is enormous (I have yet to volunteer for or work for a .org that didn’t need better backend systems.)
Professional services and higher education will be tougher markets to crack due to the large number of top tier vendors focusing on these two opportunities. But like so many industry and software categories, while the top tier vendors make a lot of the noise and seemingly suck all the energy out of the room, the “other” vendor category still dominates in most industries. As it “debuts” in the US, Unit4 doesn’t need to steal market share from SME top tier vendors like Microsoft, SAP, Oracle/Netsuite, or Infor as much as it needs to make a dent in the “other” category. That modest goal could go a long way towards establishing the foothold that Unit4 needs.
The ability of Unit4 to focus on its core markets came up in conversations with every customer I met at the company’s recent customer event. One of the non-profit customers I spoke with runs a global network of both employees and donors that requires it to manage multiple currencies and meet highly specific local accounting requirements. Doing this using the customized environment they were previously running became a huge financial and operating burden, and when they set out to replace their legacy system the requirement for “zero customization” was high on the list. The ability to fulfill that requirement with fit to standard software, and the fact that Unit4 has a center of excellence devoted specifically to the non-profit sector, was a major factor in why this customer picked Unit4 and not several of its larger rivals, none of which “knew my sector as well.”
Putting the right people on the job to make the customer successful was part of that ability to focus. Again, the customers I spoke with all felt that the personal touch that Unit4 provided was an important part of why they didn’t go with a more well-known brand. I can’t tell you how many times I’ve talked to customers who use words like “arrogant”, “ignorant,” and “uncaring” to describe their interactions with account execs from the top tier vendors – as well as some of those vendors’ partners. It just blows my mind, frankly, to hear those stories, but then again, wearing a clean shirt and getting the assignment done on time shouldn’t have been mind-blowing revelations either.
That personal touch will be tested as Unit4 moves to grow its channel sales. The “wild west” of consulting services in enterprise software is one of the major issues in the industry – too many partners are selling with their A teams and then sending the proverbial school bus of inexperienced employees to actually do the work. The resulting culture of mediocrity is an industry-wide problem, and it’s getting worse as the number of customers moving to the cloud is outstripping the number of implementers qualified to actually do the work.
Lucky for Unit4, Mike Ettling understands this problem more than any software exec I know. He saw the writing on the wall years ago when he was at SuccessFactors, and saw how the large SIs tried to sweep the problem under the rug, refusing any and all attempts to actually hold them accountable for real customer success. It’s a topic he and I have discussed on numerous occasions, and as Ettling moves to grow Unit4’s brand awareness in the US and elsewhere, I’m convinced he’ll keep his eye on the customer success prize and not succumb to the temptation to sell at all costs and to hell with the consequences.
I’m increasingly convinced that companies like Unit4 are destined to move up in the short lists of SME companies looking for a partnership with their vendors precisely because of the value to customers that focusing on a few SME verticals brings. The top tier vendors – SAP, Oracle/Netsuite, Microsoft, Infor – are all focusing on the large enterprise space even as the target the SME space, and in doing so the conversation they’re having with the SME market is increasingly obscured by this focus on the big deal. The messaging from the keynote stage for all of these companies is largely an LE message, with SME messaging filed under the truism that SME companies have the same needs as LE companies. This one message fits all mentality is only valid on the technology side, if even that. In the real world of enterprise software, SMEs have very different needs, very different vulnerabilities, and very different timetables for innovation.
Being all things to industries unfortunately encourages sloppiness and canned go-to-market approaches executed by partners. For the larger vendors, many of these partners do justice to their “last mile” position by taking a big horizontal product and tweaking it for a specific vertical. But most of these partners are also being pushed to hunt big game instead of focusing on the smaller opportunities, and their approach in too many cases looks more and more like an LE go-to-market effort poorly translated for the SME market.
The path to success increasingly favors simple over complex, focused over comprehensive, attention to detail over scatter-shot. I think Unit4 gets that better than most, and by keeping it simple they can better serve a customer base that needs focus more than bells and whistles. Too many companies pay lip service to customer success – I’m convinced Unit4 knows how to do much much more.
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