Appirio Opens New Front In Services Software

Appirio, itself a professional services firm, thinks it’s identified an area that software vendors have thus far ignored: planning and management software for professional services firms like management consultants, architects, lawyers and the like.

Vendors like SAP and Oracle sell enterprise resource planning (ERP) application suites that customers use to manage their business, managing everything from supply chains to human resources. But the various modules of the software have generally been created with manufacturing businesses in mind, and have to be customized for them to be of much use to services firms.

Appirio, which is primarily in the business of helping customers migrate from software they own and manage themselves to cloud-based software from the likes of Salesforce.com and Google, is introducing cloud-based applications that are intended to help run professional services firms like itself.

Ryan Nichols, Appirio’s vice president of product management and marketing, told me the firm is targeting the top thousand professional services firms, which typically generate over $25m in revenue and have more than 100 consultants on staff. “It’s a pretty big industry to be neglected by the technology,” Nichols told me.

In the short term, Appirio will focus on the six thousand professional services firms he said already use Salesforce.com. “It’s a natural bridge,” he said.

Forrester analyst Ray Wang, who specializes in the enterprise applications market, agreed that while some vendors, like Netsuite, Maconomy, Tenrox, Deltek, and Basecamp do have some applications tailored to the needs of services firms, the applications are often little more than project management software. Moreover, he said, those vendors he rattled off are the exception rather than the rule. “In general the industry hasn’t done a good job,” he said in an email.

Appirio is unlikely to encounter a serious challenge from the larger vendors, which are focused mainly on holding onto their respective installed bases while racing to create cloud-based versions of their on-premise applications. NetSuite has made two acquisitions in the past year that signal its seriousness about professional services, but it has thus far been more successful at the smaller end of the market. Meanwhile Appirio has already shown it can address the needs of Fortune 1000 companies, and its existing relationship with Salesforce.com’s customers can only help.

Given how much of the world’s economy is moving from manufacturing to services, it’s surprising that so little software has been written to support it. I suppose it’s a case of the cobbler’s shoes being the least well-shod.