technologyreseller.co.uk 39 “Market research has told us that there are around 90,000 sites in the UK alone with needs above Xero that don’t have the ability to digest the disruption and price of the likes of NetSuite, Dynamics and Intacct. There's a 90,000 mid-market base that need to move from on-premises to the cloud and they've got nowhere to go. Our average contract now is about £20k. If we get just 5,000 of those 90,000 businesses, 6% market share, we'll be at £100 million a year in annual recurring revenues. That's a billion-pound business with a 6% share. And we think we could get a 15% share.” He cites the example of A-One Insurance Group, which had nine copies of Sage 50 for nine legal entities in a business with 150 staff. They had no consolidation, no real time information. At year end, two people would spend two months doing manual input to get data in the right places before they could do a year in return. They looked at NetSuite and Dynamics and Intacct but were put off by the disruption and £50K per year cost. iplicit came in, with one copy, and solved their problem cost-effectively and quickly with 15 days of implementation across two months. “If they hadn’t have found us their alternative was to do nothing,” adds Stickley. The new iplicit Channel Partner Programme enables MSPs to share in this opportunity – and they don’t need in-house expertise to do so – while also enabling seasoned accounting software resellers to offer an affordable cloud migration path to their customers and those of their competitors. Iplicit has three types of partner: reseller partners that have been selling accounting software for 20 or 30 years; the accountants channel; and MSPs. “MSPs are really interesting because they have never sold finance before but have got loads of customers. When you talk to an MSP about the finance department, they say ‘We don't touch that’. But if we say to them ‘What if you partnered with us and we bring them into the cloud’, they immediately say ‘Yes, I’ve got leads for you’.” To meet the needs of each partner type, iplicit offers three partner models: referral-only, often favoured by MSPs and sometimes accountants, with an introductory margin for referrals; referral and deployment, generally favoured by accountants, where the partner introduces a client and iplicit makes the sale before giving the service work to the partner; and resale, where the partner does their own sales, does their own service and does firstline support. Stickley expects to have 20 to 25 accredited partners by the end of the year. Some partners are not yet accredited but already active, with 60 systems being actively deployed through partners. MSPs are a relatively new partner type but iplicit’s referral model makes it possible for them to generate a new revenue stream with little effort. In time, Stickley expects some to devote more resources to maximise the opportunity with iplicit. “I think some MSPs as they mature might recognise this as a service opportunity and want to recruit for it, but they wouldn't do it to start with because they wouldn't have the resources. To start with we can help them recognise the opportunity, we can help them do the referrals, earn money and then as they start to see this snowball, they might say ‘Hold on a minute, there's a revenue division here’.” www.iplicit.com Find out more about iplicit’s software and partner programme at Tech Live 2024, taking place at the Business Design Centre on September 17. www.tech-live.co.uk up to about 500 was left behind with just on premises, because everyone was either going for high consultancy, high value, low volume or for super low value, high volume. That mid-market area with deals of £8,000 to £50,000 a year wasn't being addressed.” Covid proved to be a catalyst for iplicit, as it was for so many cloud-based technology start-ups. “We started to rethink our investment, rethink our market research, put more money in and reset our sights. From that early stage £1 million investment to build a 30-person business, we’ve invested £18.5 million in the project and will have grown into a 130-person business by Q3. We've changed iplicit from a small business with an interesting opportunity into a Sage displacement engine. This is a Sage killer. We feel we're like Netflix to Blockbuster. If an on-premises customer wants upgrades they're going to need physical upgrades on their servers, they can't connect with other cloud systems, they can't facilitate hybrid working. We have one monthly fee, it's all inclusive, no support costs, no upgrade cost – it’s all in there as part of our monthly fee.” Stickley believes the mid-market of 30 to 500 staff is where iplicit offers the greatest value to customers, particularly those that need to consolidate finances, with Xero competing at the entry level and NetSuite at the higher end. “We regularly beat NetSuite and Dynamics and Sage Intacct if they try to target that mid-market. Those products are great for a 1000-person organisation, but for a 200-person organisation, it's like a sledgehammer to crack a nut – it’s too expensive, and it's too lumpy to get into implementation,” he says. “We can do a comparable proposition against NetSuite, where NetSuite will quote 90 days implementation, which would be about £100k, and £50k a year in annual fees for a 150 to 200-person business. Our shoulder-to-shoulder equivalent proposition is typically £25k for implementation (iplicit can complete an installation from start to finish in around 20 business days) and £20k to £25k in annual fees. We can take a prospect from on-premises and onto the cloud and do it £100k cheaper than NetSuite in their first year and £25k a year cheaper thereafter.” He adds that with a sizeable addressable market, iplicit has the potential to be a billion pound business. Business Design Centre · London · 17 September 2024 ICT · MANAGED IT · MOBILE · PRINT 24 in partnership with Exhibitor ...continued Lyndon Stickley
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