In the late 1990s, Aaron Harris was on his way to becoming a partner with accounting giant Arthur Andersen. But much like the legions of other young entrepreneurs at the time, he turned heel and left for Silicon Valley in pursuit of his real dream: starting his own software company.
In 1999, Harris teamed up with David Thomas—who had encouraged Harris to take the plunge—and secured venture capital to launch a web accounting application they called Intacct. They made it just in time. On the same day they closed their first round of funding, the NASDAQ crashed.
Aside from the Internet bubble bursting and the resulting chaos, Intacct was a bit ahead of its time, says Harris. “We had a good product and gained some traction, but the market wasn’t quite ready for accounting on the web,” he explains. “The world didn’t have a good grasp yet of what it meant to put accounting online.”
But Harris, his team, and their investors were all committed to the idea, and stuck it out through some very difficult times. By 2004, it was clear that the cloud was here to stay, and Intacct began to move into its current position as one of the top mid-market cloud financial software solutions.
Intacct users can be broken down into three groups: a business that is replacing its on-premises client server; customers who are in a rapid-growth stage and need something with more capability than the software they had been using (often QuickBooks); and CPA firms who use it on behalf of their clients.
Harris says that, at this point in the game, it would be difficult to find justification for a company to continue to do its accounting on its own servers. “There is no reason,” he says. “I would compare it to using a portable generator for your home rather than connecting it to a public utility. It’s more expensive. If it breaks down, you don’t know how to fix it. The biggest reason to move to the cloud is ironically why people were hesitant at first to give up their servers—security. The cloud is actually more secure. We invest far more in security than any one of our customers can.”
When Intacct began, one of the company’s most formidable hurdles was buyer fear, a perceived lack of control over their financial data. The company focused much of its energy on marketing to alleviate these concerns and even put webcams in their data center and a link in the software that would open a window with a camera pointing at the servers. Multi-factor authentication has been added, and there are numerous certifications by auditing companies. But Harris says that customers can’t see many of the investments the company makes in security.
“They can’t see the engineers and system administrators who are constantly monitoring the state of the security world and putting in improvements to the system so there are no exploitable weaknesses,” he says. “Every quarter, we go through two controlled security tests where we have consultants who try to hack the system and take advantage of any weaknesses in the network to see if there’s anything we need to address.”
Then there is the company’s disaster preparation process, for which they have a recovery data center where they are doing continuous log synchronization while people are using the system. Backups are transferred electronically every day, and if there were to be a catastrophe in Silicon Valley, they would immediately bring the disaster recovery site online. “Our commitment to our customers is that the secondary site will be live within twenty-four hours and customers will have lost no more than two hours of work,” Harris says.
As the sense of security increases, more and more companies are seeing the distinct advantages of the cloud and migrating toward it—and that is transforming the way these companies work. With the client server model, only core users had access to the software. With the cloud, users can access the software from any device at any time, which brings together the entire organization. In the past, a CEO who had a question for accounting would have to walk to the accounting department and ask for a report to be written, which would show up at some point in paper form. He or she would have no ability to see all the underlying details.
With Intacct, the executive has a dashboard where he or she can look at subscription billing, customer aging, and a myriad of other aspects. Additionally, Intacct offers social collaboration, a function in which team members can have conversations without needing a secondary tool. “It’s not just about tech and devices now, it’s about extending the reach of the solution, and rethinking who you’re building the product for,” Harris says.