Anaplan States Planning Is Dead, Focuses on the Era of Real-Time Decision

Recommended Reading for: Finance, Sales Operations, Supply Chain Management, IT Management, and Enterprise Strategy Personnel
Companies Mentioned: Anaplan, IBM, SAP, Oracle, Microstrategy, Tableau, DataRobot, TROVE Data, Louis Vuitton, Premji Invest, Salesforce Ventures, Top Tier Capital Partners, Baillie Gifford, Granite Ventures, Industry Ventures, Meritech Capital, Constellation Research, Ventana Research, IDC, Mint Jutras, ISG, Gartner, Apps Run the World, TechVentive

On March 6th and 7th, 2018, Amalgam Insights attended Anaplan Hub 18. Anaplan has been on Amalgam analysts’ radar for several years, as we consider Anaplan’s Hyperblock foundation and ability to serve multi-departmental planning in enterprises without a year or more of setup to be fundamental advantages. As we have covered this company, we have been waiting for Anaplan to reach its breakthrough moment where it takes its place as one of the true market leaders in enterprise applications. It is in this context that we attended Anaplan Hub and judged our interactions with Anaplan executives, customers, and partners.

This report provides updates on Anaplan’s key business metrics, executive insights from an analyst-only panel, keynote and product announcements, a 2018 perspective on customer success stories with Anaplan, and Amalgam’s expectations for Anaplan in 2018 and beyond as both a real-time planning application and a Platform as a Service.

Anaplan Key Business Updates

From a business perspective, Anaplan announced that it had surpassed $200 million in billings and currently has over 850 enterprise clients after adding over 200 clients in the past fiscal year. This billings achievement comes only a year and a half after Anaplan announced a $100 million revenue run-rate in the first half of 2016. Although billings and revenue are not equivalent financial metrics and do not have an exact 1:1 relationship, Amalgam notes that these metrics can be used to estimate that Anaplan has roughly doubled over the past 18 months. To further corroborate, the August 2016 press release notes a global workforce of 600 whereas Anaplan currently has over 1000 employees, as their cupcakes indicate!

These business results were reflected in Anaplan’s ability to raise an oversubscribed $60 million funding round in December 2017 led by Premji Invest and including both new investors Salesforce Ventures & Top Tier Capital Partners as well as existing investors including Baillie Gifford, Granite Ventures, Industry Ventures, and Meritech Capital. With this funding, Anaplan is now valued at $1.4 billion, expanding its valuation as a “unicorn” private company which first occured in Anaplan’s January 2016 funding round. Unlike many “unicorns” that have been overhyped, Anaplan has a technology advantage and a proven revenue and growth model that is in line with its current valuation.

Executive Insights from Anaplan

Amalgam Insights and a number of other top analyst firms and influencers (including Constellation Research, Ventana Research, IDC, Mint Jutras, ISG, Apps Run the World, Gartner, and TechVentive) had the opportunity to further learn about the business during an executive panel held on the afternoon of March 6th.

This panel included CEO and President Frank Calderoni, CFO Anup Singh, CTO Michael Gould, Chief People Officer Marilyn Miller, Chief Customer Officer Simon Tucker, Chief Marketing Officer Maria Pergolino, Chief Revenue Officer Steven Birdsall, Global Customer Officer Paul Melchiorre, VP of Product Sampath Gomatam, and VP of Engineering Jack Whyte.

As Anaplan has doubled in size over the past 18-24 months, it has undergone massive executive turnover. Only three of the executives on the panel were there last year, but this turnover does not seem to have inhibited either product development or market share. Calderoni, Singh, and other executives explained how the team has identified five-year goals for Anaplan in their current operating plan and have developed increased product roadmap discipline over the past year.

As analysts, one of our key questions was to ask why Anaplan won against the wide variety of planning and enterprise applications solutions that it competes against. This specificity is becoming increasingly important in light of Amalgam’s 2018 assertion that Enterprise Performance Management is at a Crossroads and that vendors must either specify or commoditize.

From the vendor’s perspective, Anaplan wins based on its abilities to:
• Change business models on a live and near-real-time basis
• Deal with data diversity and complexity based on its Hyperblock base
• Work at massive scale to handle all business data as needed
• Provide a single platform for end-to-end planning
• Support future-facing plans for bringing artificial intelligence and an improved end-user experience into the planning world
• A line-of-business focus that understands finance, sales, and supply chain buyers
• Reduce the cost of necessary services from an implementation perspective. Anaplan mentioned that in direct head-to-head comparisons with SAP and Oracle, megavendors can charge 12x the cost of services compared to an Anaplan implementation
• A vertical focus that is often defined by geography. For instance, Anaplan is strong with Asian telcos and European hospitality and CPG companies based on geographic go-to-market successes. Amalgam believes that this last point is a potential sign of growth as these geographic verticals expand into global vertical markets over time.

Amalgam believes that an additional reason that buyers should consider is Anaplan’s documented success in quickly adding new use cases, departments, and business units to the planning environment by bringing an agile tiger team together for 6 – 8 weeks, which we’ll discuss later in this report under Customer Successes.

The idea of real-time planning was a key point brought up both at this panel and keynote, as Anaplan is focused on providing a product that reflects the current state of the business and to support better timely decisions. As Anaplan continues to build out real-time capabilities, Amalgam expects that machine learning will have to conduct much of the heavy lifting to contextualize data.

But all of these opportunities lead to the need for Anaplan to practice discipline in the face of opportunity, which Amalgam sees across the executive staff in their united focus on messaging, hiring, and selling based on Anaplan’s current go-to-market momentum rather than trying to sell anything to anyone.

Although this executive team has not been together for a long time and Calderoni often took the lead in answering questions across various departments, Amalgam notes that this year’s executive panel showed more consistency and detail across business imperatives compared to last year, which came across more as a transitional year in taking over from previous CEO Fred Laluyaux. This panel’s consistency of messaging across people, technology, and customer success showed that Anaplan is now consistently managing and executing on a new business plan.

Keynote and Product Announcements

Anaplan also announced a variety of product and usability improvements to support enterprise planning on the second day of Anaplan Hub 2018.

From a collaborative and actionable perspective, Anaplan announced a number of announcements across user experience and application lifecycle management to support personalized design both for developers and users, including improved read/write access both at the cell and user level and improved dashboards, charts, and navigation.

Two tactical product announcements that got Amalgam’s attention were Anaplan’s Workflow and Anaplan Business Map. The Workflow capability allows Anaplan users to define users, actions, and specific parameters to translate plans into discrete business activities. This will allow companies to coordinate multi-user activity through Anaplan more easily and improve Anaplan’s ability to serve as a system of action rather than simply a system of record.

Anaplan Business Map is now available to Anaplan’s business and enterprise customers who opt-in. This capability allows companies to see all of its plans on Anaplan and find points of interaction and connectedness. This functionality will be increasingly important over time as holistic planning or “Connected Planning,” as Anaplan calls it, gains visibility among enterprise executives and becomes a competitive advantage for companies seeking to bring finance, supply chain, sales, HR, operations, marketing, and IT data together.

And Anaplan provided the necessary lip service to machine learning, which has quickly evolved from an interesting buzzword to a necessary roadmap item in automating highly repetitive and high volume tasks. Anaplan already offers 20+ predictive algorithms for basic statistical work and has partnerships with machine learning providers including TensorFlow. In addition, Anaplan is working on third-party data integration, which will open up a new set of partnerships. (Amalgam thinks that integrations with DataRobot and TROVE, in particular, would be accretive to Anaplan.)

The most interesting of these machine learning announcements was Anaplan’s Optimizer will help companies automate modeling of complex issues such as pricing, supply chain production, and other massively multi-variable challenges. This machine learning-enhanced method of planning optimization is important for accountants and business analysts who are now overwhelmed with the number of potential variables that can affect a final business result of improved revenue, work optimization, and cost reduction, the three core financial benefits that companies can achieve to validate a financial investment.

Anaplan also showcased its Bring Your Own Key (BYOK) capability for data security and encryption, a capability that was still in trial at last year’s Anaplan Hub. As Anaplan continues to evolve as an enterprise planning, workflow, and data solution, granular and compliant data access will become increasingly important to the long-term value of Anaplan, which is why this capability is an important one. With BYOK, Anaplan can support regulated industries more easily, which unlocks new verticals for Anaplan.

How To Succeed With Anaplan

One of the most valuable aspects of attending a vendor event is to better understand how customers succeed in implementing a solution, both to understand its strengths and weaknesses as a product. At Anaplan, Amalgam also had the opportunity to meet with Jean-Marc Sennechael, Vice President of EMEA Customer Success and discuss the key traits associated with successful Anaplan deployments. Since the executive team had stated that both service costs and implementation time were important aspects of Anaplan’s differentiation, Amalgam was interested in getting additional details.

Sennechael explained that in successful deployments, he saw an initial team that started with a SCRUM master to support this agile project, an internal data expert, a project manager, and an Anaplan modeler. This internal tiger team was typically able to support all of the key aspects of implementation. He also added that a key aspect of customer success was to start small and with a focused project such as financial or sales planning for a specific business unit. Despite Anaplan’s value as an enterprise planning solution, it was paradoxically important for clients to start with a specific department and then to build over time.

After meeting with Sennechael, Amalgam then attended Louis Vuitton’s session on planning, which demonstrated how the company quickly deployed a half-dozen plans within a year and a half across multiple business units and functions. For their company, the support and expansion of Anaplan were based on internal demand once business managers saw the initial planning solutions and how they supported both real-time planning and data access that had previously been dependent on IT involvement and help desk tickets.

Amalgam’s Expectations for Anaplan in 2018 and Beyond

Unfortunately, Amalgam’s time at Anaplan was cut short due to a poorly-timed Nor’easter hitting the East Coast and wreaking havoc with travel and other client engagements. However, in our short time at Hub evaluating product, business, executive talent, customer success, and partner satisfaction, we saw consistent signs across the board that Anaplan is rising above the single-department financial performance, supply chain management, or sales operations management solutions that Anaplan competes against and is leading in the development of a true “Enterprise Performance Management” platform that allows companies to bring together finance, supply chain, sales, IT, and other operational departments into an integrated planning environment.

Over the rest of 2018, Amalgam expects that Anaplan will continue to successfully add net-new sales operations and supply chain planning and will start building out IT and marketing use cases to a greater extent. However, the true growth story for Anaplan will come from its ability to increase internal usage from existing customers as new customers learn to rapidly add new geographies, business units, departments, and data sources to existing models to build a more holistic planning model.

However, there is also additional growth potential for Anaplan above and beyond its considerable ability to support holistic business planning. Amalgam and other analyst firms noted that Anaplan’s App Hub, its store for apps built on the Anaplan platform, is still relatively nascent. However, the potential for analytic, machine learning, and vertical-specific apps based on the data (and data structure) of Anaplan is still immense and untapped. Over time, Anaplan still has the potential to be a business PaaS, along the same lines as Salesforce, across a broader data environment for enterprise organizations. This effort is still in its infancy compared to the potential that exists for this business. As Anaplan builds out its core use cases and continues to acquire enterprise clients, Amalgam expects Anaplan to build out the PaaS potential associated with its proprietary data structure advantages.

Overall, Amalgam is bullish on Anaplan’s abilities to continue executing as a strategic business planning solution that has the opportunity to bring every aspect of the business together. The vision of both real-time and holistic planning is a Holy Grail promised since the birth of “business intelligence,” but only now is this goal now viable for all enterprises with the emergence of planning solutions capable of linking all relevant data together. In short, despite reaching $200 million in bookings, Anaplan is still in an intermediate or adolescent state of maturity with room to grow. With a maturing go-to-market approach and experienced executive team, Anaplan’s focus and ability to execute are clear.

Based on this event and prior coverage, Amalgam recommends Anaplan for enterprises seeking both standalone tools for financial, sales, and supply chain management as well as a flexible tool that can support strategic business planning across multiple departments. Companies currently considering traditional megavendor planning solutions from Oracle, SAP, or IBM or traditional Business Intelligence solutions such as Microstrategy and Tableau to support consolidated planning needs should consider Anaplan for its scale, rapid deployment, and flexibility in providing directional guidance. Finally, Anaplan should also be on the radar for consultancies and vertical-specific app developers looking for platform ecosystems that are rapidly growing. Given that Anaplan’s average booking/client is a 6-figure deal and the flexibility of the platform, the Anaplan platform will continue to grow as a core planning and information source for digitally savvy enterprises.