New CEO to Guide FinancialForce's Ambitious Growth Plans
Jan 9, 2017 12:05 PM PT
Cloud-based ERP firm FinancialForce on Friday named a new CEO, Tod Nielsen, who previously served as executive vice president of platform at Salesforce.
Nielsen takes the helm from FinancialForce founder Jeremy Roche, who remains a major shareholder in the company. He will stay on as special advisor to the management team and work with FinancialForce investor Unit4 in an executive position. Roche's home base is in the UK.
Salesforce is another investor in FinancialForce, which builds its applications on the Salesforce platform.
FinancialForce last year raised US$110 million in a fresh round of funding.
The company has "reached the critical $100 million revenue run rate marks, and we want to aggressively grow to reach the next stage," said FinancialForce spokesperson Sandy Lo.
"With the combination of personal reasons -- Jeremy has been bi-continental and it takes quite a toll -- and the type of experience needed to now reach the billion-dollar mark, Jeremy and the board have made this decision," Lo told CRM Buyer.
Tod Nielsen's Chops
Nielsen "has a history in the industry to help FinancialForce move forward," said Seth Lippincott, lead ERP analyst at Nucleus Research.
"He should have no problem communicating FinancialForce's value proposition with his background," Lippincott told CRM Buyer.
In addition to Nielsen's position at Salesforce, which he left last June, his background includes serving as CEO of Heroku, a Platform as a Service used for writing applications in the Ruby language. Salesforce completed the acquisition of Heroku for $212 million in cash back in 2011.
Nielsen previously served as COO at VMware, CEO at Borland, SVP of marketing and global sales support at Oracle, CMO at BEA Systems and VP of Microsoft's Platform Group.
In a recent interview, Roche said that he wanted FinancialForce to become the next SAP or Oracle, and "that is absolutely still the goal," Lo said.
"We don't just want to be the leading cloud ERP vendor on the Salesforce platform -- we want to be the leader, period," she said.
In the near term, Nielsen's goal is "to meet with customers, employees and partners to determine the best course of action," Lo said.
The global ERP software market will hit nearly $42 billion by 2020, Allied Market Research has predicted.
Most ERP vendors that offer both on-premises and cloud deployments report that their cloud products are the fastest-growing, Lippincott noted.
The cloud ERP market will "continue to accelerate," and FinancialForce "is well positioned to capitalize on this growth," he said.
Cloud deployments garner higher ROI and offer shorter payback periods than on-premises systems, based on Nucleus Research's customer data, Lippincott observed.
Possible Trouble Spots
FinancialForce customers "find value in the fact that it operates on the Salesforce platform," Lippincott remarked. "It was the differentiating factor for some."
The FinancialForce customers he has spoken with "are very happy and are getting good value from the solution," Lippincott said. However, the company's exclusive focus on the Salesforce platform could be its Achilles' heel.
"A customer characterized Salesforce as the 800-pound gorilla to which FinancialForce is tied," he remarked. "If Salesforce starts to struggle, FinancialForce's potential customer base cold be hurt."
That close tie-in "puts limits on what customers FinancialForce can reasonably go after," Lippincott pointed out. "If the prospect isn't a Salesforce CRM customer, FinancialForce is probably better served not pursuing the deal."
That said, Salesforce is growing. It expects to deliver its first $10 billion year during fiscal year 2018, CEO Marc Benioff said last fall.
Still, FinancialForce is just one of several companies offering ERP apps on the Salesforce platform, Lippincott noted, and it "can't rest on its laurels."