Month: April 2021

On April 27th, 2021, Vena announced raising a CAD$ 300 million C Round led by Vista Equity Partners. Vena’s prior investors, JMI Equity and Centana Growth Partners, remain active investors and Vista adds two board members, Managing Director Kim Eaton and co-Head of Vista’s Foundation Fund, Marc Teillon. Vista’s current Foundation Fund IV was raised in 2020 and is approximately $4.5 billion, making this US $240 million+ investment a significant portion of this portfolio.

Vena is a business planning, budgeting, and forecasting solution that uses Excel as a front-end interface while coordinating data through a back-end Vena Growth Engine. Since it was founded in 2011, Vena has stood out in the business planning market as a solution that was built to support Excel as a front-end interface while supporting the governance of collaborative consolidation and close management, account reconciliations, and intercompany transactions through back-end coordination that synchronizes the user experience. Vena has traditionally had a strong relationship with the Microsoft technology stack, including running on Azure and supporting Power BI. Over the past decade, this technology support has evolved to support all major data sources used for finance planning. Vena provides a horizontal solution, but has experience in verticals including Banking, Healthcare, Higher Education, Insurance, Manufacturing, and Software.

Over the past decade, Vena has provided supported multiple customers that have achieved 500+% ROI on their investments as organizations have been able to use Vena’s business planning approach to save time, add governance to business reporting by ensuring users always have approved data, provide repeatable structure to previous ad-hoc finance and accounting reports, and accelerate executive time-to-action.

With this investment, Vena Solutions plans to pursue growth. Given the size of this investment, Amalgam Insights expects to see the acceleration of global sales channels as well as increasing verticalization to take full advantage of the value created by developing more dedicated industry-aligned solutions. Given the current $9 billion market cap that Anaplan enjoys on roughly $450 million in annual revenue and the success of Workday Adaptive Planning, it is not difficult to imagine Vena achieving both similar growth and valuations with its new round of funding. Amalgam Insights believes that Vena’s approach is potentially well-suited to general business planning challenges beyond finance and operations, but could be improved additional investment in native data connectors to compete with Workday, Anaplan, and insightsoftware.

Recommendations

Vena Solutions continues to be a business planning solution that Amalgam Insights recommends, as its experience in providing an Excel-based planning solution is unparalleled in the market and its user adoption metrics are Best-in-Class because of its approach. Companies seeking to quickly scale their finance, sales, or workforce planning initiatives should consider Vena. With this increased investment, potential clients should ask Vena for plans on localization, vertical solutions, new products and integrations, and regional partners to support global implementations as the financial barriers to pursue both innovation and growth have obviously been removed.

On April 20, 2021, Datarails, which focuses on financial planning and analysis solutions for small and mid-market organizations, announced raising an $18.5 million Series A round led by Zeev Ventures Fund and joined by existing investors Vertex Ventures Israel and Innovation Endeavors. With this round, Oren Zeev joins the board. Previously, Zeev has invested in finance and accounting firms including GT Nexus and was a co-founder of Tipalti.

Datarails started as a data compliance solution to support financial services companies in 2015, but found market fit in 2020 by offering its data governance capabilities as part of a financial planning tool focused on small and medium-sized businesses using spreadsheets to manage their financial budgeting and planning needs. This pivot makes sense considering that financial planning and analysis has been a hot market over the past decade that has supported the growth of multiple vendors including Adaptive Insights, Anaplan, Board, Jedox, Planful (previously Host Analytics), and Prophix.

However, Amalgam Insights actually considers Datarails to be part of a second generation of FP&A vendors that are focused on making planning solutions more accessible, which also includes Budgyt, Centage Planning Maestro, Cube Software, Fathom, Jirav, Limelight, Pigment, and XLerant.

Among this peer group, Amalgam Insights finds Datarails’ Excel-based approach to be a differentiator. Datarails’ approach allows users to continue using Excel as their interface, but then saves the data in an Azure-hosted SQL database to provide business governance.

In reviewing the product, Amalgam Insights found the Datarails product to provide both the obvious advantages of working within Excel as well as a SaaS-based software interface that provided the full history of cell value and forumla changes and strong visualization capabilities.

Amalgam Insights notes that this approach is similar to the approach that Vena Solutions uses to govern data from an Excel interface. Since its founding in 2011, Vena has raised $173 million in funding with the latest round being raised in September 2020. However, Vena’s typical contract is over $100,000 per year to support business planning across finance and operations while Datarails is targeting smaller companies at a starting cost of $15,000 a year to support a team of up to 8 users and viewers along with an initial one-time installation fee of $5,000.

Conclusion

Overall, Amalgam Insights believes that Datarails’ approach and funding make it a viable option for consideration for organizations between 50 and 500 employees that are working on creating a collaborative budgeting and forecasting process. For these companies, Amalgam Insights expects that Datarails will be fully installed within 8-12 weeks of contract signing and provide a payback period of 6 months or less based on improvements to provide more timely reporting and forecasting, time saved by relevant finance and accounting professionals, and the risk mitigation associated with having data centrally managed compared to being in Excel spreadsheets.

Based on previous analysis, Amalgam Insights believes that this investment would typically provide a 300-400% annual Return on Investment based on the process improvements, productivity increases, and reduced risk associated with budgeting and forecasting reporting on a monthly, quarterly, and annual basis. (Note: This is a general estimate based on past analyses of FP&A projects. If you would like a detailed analysis, please feel free to contact us at sales@amalgaminsights.com)

Key Stakeholders: Chief Information Officers, Chief Technical Officers, Digital Transformation Heads, Director of Engineering, Enterprise Architecture Directors and Managers, Application Architecture Directors and Managers, Financial Systems Directors and Managers

Why It Matters: Analytic and business intelligence deployments struggle to bring insights and analytic outputs back to their initial sources or to enterprise applications because analytics has traditionally been a one-way path from the data source out to the data analyst creating the report or visualization. With this acquisition, ThoughtSpot as an analytic solution can now complete this two-way path to bring data analysis outputs directly back to the data environments and software solutions that the entire company uses.

Top Takeaway: We are still in the earliest stages of integrating data, analytics, and business practices. With this acquisition, ThoughtSpot is continuing to take a leading role in making analytics easier to access and consume at scale.

About the Acquisition

On March 31, ThoughtSpot announced the intent to acquire SeekWell, a reverse ETL solution designed to bring analytic insights and processed data back into applications. This bridge is vitally important to the enterprise analytic world for a couple of reasons.

First, one of the biggest problems in the current world of enterprise analytics is that the end result is all-too-often a static dashboard, visualization, or table that stands alone and needs to be entered into another application for other people to see the insight. Without this entry, the value of that new report or insight is limited to the report writer and the people who have access to the business intelligence or analytics solution in some way. Although analytics platforms have made significant progress over the past decade in making analytic results more available and embedded, the vast majority of enterprise analytics environments today still require significant design and development work to bring analytic insights to end users. Seekwell has solved this problem by bringing processed and analyzed data back to either the initial sources or to new applications that can use aggregated data to present better options and context for its users.

From a practical perspective, this brings analytic insights back to business users even faster than an embedded BI approach that requires prior preparation. This is because business intelligence and reporting still require end users to conduct queries and analysis to get to Insights while bringing analytic data back to core applications brings that data to customized applications and logic that are already aligned to employee workflows. As of today, SeekWell capabilities are available for ThoughtSpot users and are still available as a standalone capability.

Second, this acquisition speaks to a broader challenge in the technology world: the deceptive challenge of a “simple” interface. To create a simple experience, technology vendors need to provide an integrated two-way experience between the user and every system involved. The iPhone is the stereotypical example of this challenge, where the combination of touch interface, smartphone, app store, cloud services, and related devices create a seamless ecosystem via a design-based thought process. This design-based ecosystem still does not fully exist in the analytics world. When ThoughtSpot debuted as a text and search-first solution, it broke the paradigm of business analytics being solely the purview of trained data analysts and report writers by bringing analytics into natural and ordinary language.

Recommendations for the Analytics Community

Our key recommendation is a simple, yet transformative one: enhance your standard business intelligence practices as they are not sufficient to create an analytically-driven business. We are still in the earliest stages of integrating data, analytics, and business practices and the vast majority of employees lack relevant data for the time, location, and context of decision. The vast majority of investment, training, and resources placed into data, analytics, and machine learning over the past 30 years have been focused on simply structuring data so that it is accessible and queryable. However, this structure still requires an intermediate layer of data analysts, data scientists, and application developers simply to translate this data into basic business outputs. This paradigm continues to this day and we are just starting to identify and develop the capabilities to translate data into relevant, contextualized, and timely decisions.

In this context, the combination of Seekwell’s reversed ETL to pull analyzed data back into applications along with Thoughtspot’s focus on making data available to all employees through human language is a powerful combination for opening up data for practical consumption.

On April 5th, 2021, Tellennium, a technology expense management company based in Louisville, Kentucky, announced the launch of its Management of Things approach, which includes pursuit of a registered trademark and the expansion of its telecom expense management platform to include software licenses, utilities, waste, and other operational expenses.

Amalgam Insights believes that this approach is important to consider as technology has fundamentally become a tool that can help reduce the cost of many non-technology based operational expenses. To understand the true value of technology, companies must gain a better understanding of the full operational footprint affected through technology investments.

To find out more about our perspective, check out our Market Alert on this topic written by Senior Research Analyst Kelly Teal.

On March 31, 2021, Productiv, a SaaS Expense and Operations Management company, announced closing of a $45 million dollar C round led by IVP (Insight Venture Partners) joined by current investors Accel, Norwest Venture Partners, Okta Ventures, and new investor Atlassian Ventures. With this round of funding, Productiv has now raised $73 million to support SaaS Management since its founding in 2018.
IVP is known as a growth investor focused on investing in the later stages of growth. Prior IVP investments include Appdynamics, Domo, Dropbox, G2, GitHub, Hopin, Looker, Slack, Tanium, and Zendesk, just to give a flavor of the firm’s background in SaaS, data, and enterprise software, in general.

This round of funding comes at a time when the need for SaaS Management is growing rapidly and SaaS management companies are ripe for acquisition. Amalgam Insights estimates that the global SaaS market will grow to $275 billion in 2025 based on 20% CAGR as the software market continues to grow and as more on-premises software migrates to SaaS. SaaS will make up the majority of new software spend going forward.

In February, SailPoint acquired SaaS operations management company Intello. Earlier in March, LeanIX purchased Cleanshelf to bring SaaS Management into its Corporate IT and Product IT portfolio. Zylo continues to build its executive team with experienced enterprise veterans as it continues to double in size year-over-year. In short, this market is both growing rapidly and seen as an acquisition target by larger security and IT management firms.

In this context, Productiv is holding its own as a leading SaaS management firm. Productiv has doubled its employee count and tripled its revenue over the past year. Productiv is now the second-most mentioned vendor in Amalgam Insights’ SaaS Management inquiries. Over the past year, Productiv has started a free SaaS Management tool, Productiv Essentials, built out a variety of software integrations necessary for IT management and collaboration, and improved analytics and visibility across users, teams, and vendors.

Amalgam Insights’ Take

Of course, Productiv raised this money to sell SaaS Management, but Amalgam Insights expects several specific initiatives going forward.

First, Productiv will improve its partner program to allow more consultancies and systems integrators to build SaaS Management practices around the Productiv product. This represents an opportunity to bring Productiv in through your existing IT managed services providers.

Productiv will also continue to improve real-time insights. It already provides real-time application usage visibility, but Amalgam Insights believes there are additional opportunities to align usage patterns with other corporate metrics, such as project and portfolio management, workforce training, productivity, and budget forecasting as SaaS management supports employee management.

Finally, expect Productiv to start taking fuller advantage of its automated account management capabilities to drive deeper into IT automation. If “there’s an app for that” and Productiv manages all the apps, then Productiv has a lot of administrative and workflow control over the heartbeat of SaaS-using organizations.

Amalgam Insights’ Recommendation

Productiv should continue to be considered as an enterprise SaaS Management vendor with a focus on solving IT challenges. Amalgam Insights continues to recommend Productiv as a potential solution for mid-sized and enterprise IT departments considering SaaS Management solutions and points out Productiv Essentials as a starting point for firms seeking a free introduction to SaaS cost and renewal management.

On March 24th, 2021, enterprise architecture management company LeanIX announced the acquisition of Software as a Service (SaaS) management company Cleanshelf. This acquisition brings together two pioneers in their respective markets and brings together the combination of two large themes in IT: the increasing consumerization of IT that allows end-users to pick and combine their tools easily conflicts with the enterprise need to productize and manage IT so that technology investments are aligned with revenue.

About Cleanshelf, the Acquired Company

Cleanshelf was founded in 2017 as one of the first vendors focused on the business challenges of managing SaaS. Cleanshelf is based in San Francisco with subsidiaries in Denver and Ljublijana, Slovenia. The company had previously raised an $8 million A round in March of 2020 lead by Dawn Capital with participation from LAUNCHub Ventures.

Cleanshelf manages over $700 million in spend under management, has over 3,000 integrations with SaaS applications, and uses its operational data both for license optimization and to audit access and security issues. With this acquisition, Cleanshelf will continue as a standalone product, but will be renamed “LeanIX SaaS Intelligence” as of May 1st, 2021. SaaS discovery and cataloging functionality is scheduled to be provided as a complimentary component of the LeanIX Application Portfolio Management module in Q2 2021.

About the buyer, LeanIX

LeanIX was founded in 2012 to help businesses with continuous digital transformation and is headquartered in Bonn. LeanIX is an enterprise architecture management company with a focus on ease of use, providing business context to enterprise architects, controlling cloud environments and providing alignment between IT and product-based technology use cases. LeanIX has raised over $120 million, including an $80 million D round in July 2020 led by Goldman Sachs Growth, and has been noted as a market leader or leading solution by a variety of analyst firms and review sites.

Currently, LeanIX’s platform consists of: 

• Enterprise Architecture Suite consisting of Application Portfolio Management, Technology Risk Management, and Business Transformation Management modules

• Cloud Intelligence module supporting cloud services across AWS, Azure and GCP and spend showback for cloud architects and managers

• A newly announced Microservice Intelligence capability providing cataloguing and discovery capabilities for all microservices in an organization and to help DevOps teams manage complex microservices environments 

• And, with the acquisition of Cleanshelf, a SaaS Management solution to provide discovery, catalog, cost and user metrics, and renewal management

Why This Acquisition Matters for Managing Massively Distributed IT

Foundationally, Amalgam Insights believes this acquisition is important because it provides IT departments with an opportunity to manage their growth portfolio of microservices, SaaS, and public cloud resources through a single vendor. Although the public cloud, multi-cloud support, and microservices have been used over the past decade to build and support massively scalable products and businesses, the management of these technologies has been widely distributed, siloed, and often dependent on the manual tracking conducted by individual architects, analysts, and developers within IT. 

This challenge has become increasingly difficult to manage as the granularity of microservices, the wide variety of SaaS vendors, and the ever-expanding breadth of public cloud services have led to a complex and ever-changing set of catalogs and spend management. And, frankly, IT managers lack the time and expertise to be the accountants and service trackers that these services increasingly deserve as they have become million-dollar line items in corporate budgets.

Amalgam Insights notes that LeanIX is differentiated based on its ease of use and implementation, which are especially important traits for managing the more “agile,” decentralized, and end-user-oriented aspects of IT and technology such as software and microservices. LeanIX’s approach aligns technology to externally facing products and services is also a valuable approach for understanding why technology is being used within an organization. With the addition of Cleanshelf, LeanIX will be better positioned to provide granular management capabilities at the end-user level to help managers handle their technology portfolio within the umbrella of the broader governance of enterprise efforts. 

Recommendations for the IT Community

In light of this acquisition, Amalgam Insights provides the following recommendations for the IT and enterprise technology communities.

Amalgam Insights recommends that companies develop both a strategy and a toolkit portfolio to manage a new generation of technologies across all areas of cloud (infrastructure, platform, and applications) that are accessible and can be sprawling in nature. Remember the trend of Bring Your Own Device, which wreaked havoc on IT asset management, governance, compliance, and security efforts? With the evolution of public cloud, Software as a Service, and microservices, the “Bring Your Own” IT trend has grown to encompass practically all data, services, and digital processes that an employee may use. In short, employees are increasingly able to do the majority of their work outside of enterprise-approved tools if organizations fail to effectively govern and track vital IT services. Now we are in an era of “Bring Your Own IT” as well as an era of “digital transformation” that is driving the paperless office and rapid automation. 

Amalgam Insights also recommends that businesses treat “IT-business alignment” as a mandatory task rather than simply providing lip service to the phrase and treating it as a fluffy MBA buzzword. To do so, companies must align technology to a value chain that is associated with a key performance indicator or business objective. This allows companies to both gain a better sense of the true Total Cost of Ownership associated with business transactions as well as the lineage and governance needed to detect whether there are opportunities for maintaining a more optimized technology environment. There may be opportunities to consolidate multiple products conducting the same task or to bring in new technologies that can bridge opaque or error-prone process steps. 

Finally, Amalgam Insights recommends that companies look specifically at managing the applications, APIs, and microservices that employees and customers are accessing. It is easy to assume that just because a SaaS app or a cloud-based microservice does not require internal resources, that it does not need to be managed. But this approach will lead to a financially unsound approach where the IT Rule of 30 will come into play, which states that any unmanaged technology category will accumulate 30% in waste over time.