Comments on: New Article Posted – No AMS Ever Failed on Selection https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/ Making data management a revenue generator Tue, 28 Apr 2020 19:42:45 +0000 hourly 1 By: Randy https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1177 Sat, 01 Oct 2011 18:43:28 +0000 http://effectivedatabase.com/?p=3565#comment-1177 Andrew, I qoute “I think you’re simultaneously insulting the intelligence of AMS buyers and consultants who spend countless hours ensuring that a software is the right “fit,” and you’re oversimplifying market behavior”. My question is did any consultant recommend Polaris to an association? Did any association elect Polaris? If so, will you concede they made a terrible and costly mistake?

]]>
By: Diane Whitehead https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1176 Wed, 07 Sep 2011 19:31:26 +0000 http://effectivedatabase.com/?p=3565#comment-1176 Steve, I am not sure about Salesforce dominating the AMS space? Your Membership seems to have the prevailing winds. With their price point, I don’t see associations jettisoning them for Salesforce. They will have to be a compelling reason. It will take more than just saving 6k in licensing costs.

]]>
By: Dan Smyth https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1175 Tue, 06 Sep 2011 11:23:09 +0000 http://effectivedatabase.com/?p=3565#comment-1175 Andrew, are you saying your clients have the ability to access the back-end of your application? What do you mean by customizable? Your Membership even has custom reports and let’s the association customize their own portal.

]]>
By: Patrick M https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1174 Tue, 06 Sep 2011 00:28:20 +0000 http://effectivedatabase.com/?p=3565#comment-1174 Andrew, please tell me what involvement you had with ARC Solutions?

What you don’t understand is Salesforce will gain momemntum in this space by taking care of their clients. When you take care of your clients, clients will take care of you.

That said, I wish you the best of luck. I’d just forewarn any AMS buyer about your past history. Usually the past predicts the future hence why Salesforce is gaining market share.

]]>
By: Andrew Ryan https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1173 Sat, 03 Sep 2011 19:23:52 +0000 http://effectivedatabase.com/?p=3565#comment-1173 Patrick,

You’re wrong on several fronts.

First, let me correct you – this is not my third AMS company, I think you might have mixed up with someone else.

Second, I’m not quite sure you’re qualified to speak on what the premise of my company is. If you’d like to know what it is, I can tell you; it’s got nothing to do with Avectra. The premise is:

Cloud-based software will always be able to deliver higher scalability, greater reliability, and a lower TCO than on-premise counterparts.

Third, people buy solutions. The buy benefits. Even the greatest salesperson can’t sell something that won’t solve the problem. By essentially commoditizing AMS and reducing the decision points to the “best salesperson,” I think you’re simultaneously insulting the intelligence of AMS buyers and consultants who spend countless hours ensuring that a software is the right “fit,” and you’re oversimplifying market behavior.

Fourth – you don’t quite know what’s in my product, so how can you say Avectra/SalesForce can’t have it in six months? :-) Actually, you’re quite wrong here – see my last post where I explained the difference between features and platforms. The MemberSuite platform is SaaS, is an open API, and is customizable; it’s also an order processing system. That’s unique, and not easily replicable. My point is the SFDC has the money to replicate it, but the cost-benefit out of wack for them.

Andrew

]]>
By: Dennis M https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1172 Tue, 30 Aug 2011 15:17:52 +0000 http://effectivedatabase.com/?p=3565#comment-1172 Salesforce seems to be garnering attention. It is hard to beat free. I think they will stop any new mom and pop AMS companie from enetring the space? An AMS provider will need to do something different and compelling to warrant the recurring license costs.

]]>
By: Patrick M https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1171 Mon, 29 Aug 2011 00:21:40 +0000 http://effectivedatabase.com/?p=3565#comment-1171 Andrew, this is your 3rd AMS company in less than 8 years. Your latest was built on the premise “we have to do something different than Avectra and go up market faster”. What you don’t understand is nobody buys features/ benefits (platforms). First they buy the salesperson then they buy the company. The last thing they buy is the product. There is a reason why the company that acquired your last product (Polaris) was initially able to sell a failed product. If the association was buying the product first they would have not sold one deal.
When it comes to Salesforce, you are harping on what they don’t have or can’t do. You are remiss in not realizing they have good sales people that are backed by a great company and even beter technology. Simply put, there is nothing native in your product that Avectra or Salesforce can’t have in 6 months.

]]>
By: Andrew Ryan https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1170 Sun, 28 Aug 2011 19:08:25 +0000 http://effectivedatabase.com/?p=3565#comment-1170 Patrick,

That’s really not true. In fact, it couldn’t be less true; no company can survive without an understanding of it’s Position in the market, which is defined by it’s value proposition as it relates to it’s competitors. Secondly, I’m sure you understand by now that the “first mover advantage” is a myth; market’s are won by “fast followers,” who pay close attention to their competitors strengths/weaknesses and mistakes in order to deliver value to their customers.

Also – not sure why you think I’m spending an “inordinate amount of time on SalesForce?”

]]>
By: Patrick M https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1169 Fri, 26 Aug 2011 23:57:24 +0000 http://effectivedatabase.com/?p=3565#comment-1169 Andrew, it seems to me you are spending inordinate amount of time on Salesforce. Good companies focus on their customers and don’t give a tinker’s damn about what their competitors are doing.

]]>
By: Andrew Ryan https://effectivedatabase.com/new-article-posted-no-ams-ever-failed-on-selection/#comment-1168 Wed, 24 Aug 2011 13:37:14 +0000 http://effectivedatabase.com/?p=3565#comment-1168 OK,to each of your points:

Sig:

I agree with you on principle. But what you’re arguing is that ALL THINGS BEING EQUAL, that there are features of the SalesForce offering that will be hard to compete with. The problem is that all things will never be equal – SalesForce will never be able to address someone with the needs that iMIS/TMA/Avectra etc address. And not because they can’t modify their platform, but because the cost to do it doesn’t make sense for them. They’d rather follow an ecosystem strategy, and let other vendors target niche markets with their platform. For a lot of reasons, I don’t believe this works, but that’s another post.

I’ll also say this – I said it to you when we spoke, and I said it to Jason Schnur @ Protech last year – I don’t believe in building your IP on top of someone else’s. When you do this, you lose control of your ability to deliver value to your customers. When we spoke, you described problems and challenges negotiating with the SFDC “governor” – and constantly having to work around the limits that SFDC places on your applications. Jason described frustration on Microsoft CRM’s repeatedly delayed releases, and it affecting their ability to move in the direction that they know they need to go. I think you’ll find that when you’re depending completely, on someone else’s platform to deliver your solution, it will be difficult to keep up with players that own their own IP stack. My opinion only. That’s why we never built our SaaS app on SFDC (though our investors wanted it). It’s one of those ideas that sound great at 10,000 feet but, as you know, when you start to implement it, has its technical challenges.

Sig you have the unusual advantage of being both a domain expert and a skilled software engineer, and so I know you know what I’m referring to here.

Dan:

Don’t mix up non-profits with membership associations. There are around 100,000 membership associations in the U.S. (Forrester), but literally MILLIONS of non-profits. I’m quite sure that SFDC can handle non-profits, but they have a different problem set than membership associations. I’ve actually spoken w/ people from SFDC who admit that they’ve struggled to serve associations, and realize it’s really too small a market to go after in a meaningful way.

Let me say something else: always be suspect of software companies that give their software away from free. There is a step function in customer adoption from free to even the most minimal cost; people would use something that’s free that they wouldn’t use if it cost $100. When a software company is delivering free software it’s because they haven’t proved the value proposition; they haven’t honed the features/offering with a price point that a customer will actually find valuable in the face of competition. I think this is true for SFDC in the association space; I suspect if SFDC started charging sticker price for association seats, a lot of their customers would migrate to association-specific solutions like WIldApricot.

So YES, don’t underestimate the persuasiveness of FREE!! The cost-value analysis gets really interesting when you start dividing by zero (I think it ends up to be infinity :-))

Krysta:

Not sure I understand your question because I missed the word between “why” and “are”. Is it why are “you?” Or it is “Avectra”? I think I can answer either way. Here goes…

A small market for SFDC is a huge market for a small privately held firm like any of the AMS players. But here’s the kicker – the idiosyncratic nature of this market has spawned an entire class of software companies that are really consulting firms. I say this because in order to address each association’s unique requirements, organically grown companies spend an inordinate amount of time customizing the solution; and inevitably, most of their revenue comes from professional services. Thus they have the margins of a consulting firm, rather than a true software firm. But the vision, the Holy Grail, is to be able to offer a piece of software that can “scale…” in other words, that can work for 1 user, and can work for 100 – that can be afforded by a 1 staff association, and can be afforded by a 100.

The reason why Avectra didn’t stick with enterprise is that they saw the revenue potential of this Holy Grail. Really:

THEY SAW THE OPPORTUNITY TO RUN A HIGH-MARGIN BUSINESS.

Credit to them for the vision. People get caught up with the revenues of these large AMS companies, but no one asks about MARGINS. How much of that revenue get’s taken home?? If you dig deeper you’ll find that most of these companies P&L look more like Accenture than SFDC. But even if you’re a company like ASI, who have been pretty successful at focusing costs on software and letting partners do the service work, a SaaS business still has efficiencies over a traditional software business; namely, ASI has to concern themselves with managing releases, patches, service packs; their support organization must contemplate supporting multiple versions, doing onsite maintenance for locally deployed software instances, etc. All of this overhead gets passed to the customer; and, because releases create such overhead, they are infrequent.

A SaaS company has none of this overhead; they simply run a service. All customers are on the same version. There are no “behind the firewall deployments,” and only one database to maintain (eh-hem: this is why simply hosting a system and charging monthly is NOT the same as SaaS!!) And, because of this, they can release often. From these facts, I (and the tech community) come to these conclusions:

1) Non-SaaS products will never be able to price compete with equivalent SaaS products
2) SaaS products will always be able to innovate more quickly than non-SaaS products
3) SaaS companies will always operate with higher operating margins than non-SaaS products (note I said operating margins)

This is why the world is moving to the Cloud. It’s how SFDC killed Seibel. It’s why Office just came out with Office 365. It’s why Microsoft Azure exists. It’s why Vocus was a hit. And – it’s what Avectra was after. Quite simply, Sterling Partners (the investors in Avectra) were sold on the notion that AVECTRA COULD BECOME THE SALESFORCE.COM OF THE ASSOCIATION SPACE.

Just one problem though:

IN ORDER TO DO THIS, YOU NEED AN SAAS PLATFORM THAT IS CUSTOMIZABLE.

Period. If not, you will not be able to serve associations above a certain size. And if you do, they’ll be contorting themselves into an economic solution, they won’t be happy, and they’ll run as soon as a better solution comes around.

Note that I said “platform.” A platform is different than the features built on top of a platform. You can always add features – a platform must be built right the first time or must be scrapped and restarted (read: Product Strategy for High Tech Companies by Michael McGrath).

Which brings me right back around, 360, to Sig: there are features, and then there’s a platform. The problem in the space is a platform problem; each vendor has platform limitations that restrict them to a specific segment of the association market. Example: TMA Resources has a platform that can address almost every need, and is user friendly, but the implementation effort makes it unsuitable for small associations. That’s a platform problem; not a feature problem. Avectra has an extremely affordable platform, very easy to implement, but cannot be customized; and thus is unsuitable for the associations TMA Resources can serve; again, that’s a platform problem, not a feature problem. Platform problems are EXPENSIVE; feature problems are cheap.

Sig – SalesForce.Com has no native concept of order management/processing; that’s a platform problem, not a feature problem. That’s why SFDC can’t enter this market.

And thus (shameless plug) is the vision of MemberSuite; a platform that can serve a larger addressable market than any other vendor. A cloud-based AMS that has the affordability to serve small associations but the flexibility to service a large ones. This is what we do.

]]>