Having worked for both Apttus and Salesforce, Sean Joyce, the Salesforce practice lead for Navint, is in a unique position to share his perspectives on Apttus returning to its Salesforce roots. What does the pivot mean for buyers of CPQ software, and how do Apttus and Salesforce CPQ & Billing stack up?

Tale of Two CPQ Providers: A Brief History

In 2015, Apttus and Steelbrick were the two major Configure, Price, Quote (CPQ) vendors built on the Force.com platform. While they often went head-to-head in competitive situations, Apttus targeted the enterprise whereas Steelbrick targeted the mid-market.

In early 2016, Salesforce acquired Steelbrick. The acquisition sent shockwaves through the Salesforce ecosystem and vendor community. When asked “why Steelbrick?” over other vendors, Salesforce CEO Marc Benioff was quoted in a TechCrunch article as saying, “I thought it was the best example of an ISV had of building [this type of] application on this platform.”

While Apttus remained a Salesforce AppExchange partner, they intensified efforts to re-platform their product. Apttus built their applications on the Microsoft Azure platform with the goal of opening new markets, specifically with Microsoft Dynamics CRM.

Fast-forward to Fall 2018.

Salesforce heavily invested in re-architecting and launched Salesforce CPQ & Billing as an enterprise solution that supports all business models. This investment included adding capabilities to support recurring revenue requirements such as contract prorations and support for consumption/usage-based models. Salesforce CPQ & Billing is part of the Sales Cloud and, as such, is a true SaaS CPQ product, subject to the seasonal releases that customers expect from Salesforce.

Apttus has also been investing in their product, but the news that surprised the analyst community and customers was that the private equity firm Thoma Bravo had purchased the majority stake in Apttus. Prior to the acquisition, Apttus had been positioning for an IPO.

Apttus Pivot Back to Salesforce: What Was Said and Where?

On April 25, 2019, analyst firm MGI Research hosted Monetize 12 in San Francisco. The annual event attracts finance executives, IT professionals, pricing experts, investors, industry analysts, and vendors to showcase solutions and to discuss increasingly complex quote-to-cash, finance, and billing challenges.

Frank Holland, CEO of Apttus, presented a session titled “Gaining Scale and Increasing Business Velocity Through Quote-to-Cash.” Mr. Holland said Apttus plans to pivot back to Salesforce after spending the past few years building capabilities on Microsoft Azure and integrations with Microsoft Dynamics, as well as investing in eCommerce, AI, and behavioral apps.

Apttus’ Return to Salesforce: What Does It Mean?

Apttus is looking to more actively compete in the Salesforce ecosystem again. As we said above, Apttus never abandoned Salesforce. However, their focus over the past few years has been on building a multi-platform approach (Salesforce, Microsoft, and IBM) and in eCommerce, AI, and behavioral apps. Apttus also appears to be focusing product development primarily on CPQ and Contract Lifecycle Management (CLM) and limiting development on products such as billing and incentive compensation.

In the meantime, Salesforce has been able to close the enterprise CPQ functionality gaps with which Apttus once strongly competed. Salesforce also has also invested in native billing, which is critical for companies that have recurring revenue business models.

Salesforce Ecosystem: Room Enough for Two?

Yes, absolutely, as there are clear best-fit choices for each solution.

Apttus Strengths:

Apttus has remained very strong in Contract Lifecycle Management (CLM) and is one of the leaders in this space. Other vendors such as Conga and Docusign (via their SpringCM acquisition) are now competing head-to-head with Apttus, but CLM remains a clear strength of Apttus. Because CLM functionality is typically independent from CPQ functionality, Apttus CLM can work with other CPQ solutions including Salesforce CPQ. Apttus CPQ is the best fit for complex manufacturing with an immensely complex physical product configuration (think extensive component configuration). They also will remain strong for companies that want to highly customize their sales process or that can’t fit into the Salesforce CPQ recommended best practices. For companies who are on Salesforce, but are considering off-platform, complex CPQ solutions such as Big Machines or SAP Variant Configurator, Apttus should be a top contender.

Salesforce Strengths:

Obviously, Salesforce’s leadership in the CRM space and their partner ecosystem is a major strength. Hundreds of thousands of customers use their platform, and their training, on-boarding, and product development is world-class. Now that CPQ is part of the Salesforce core object model, customers also benefit from automatic upgrades that occur on the seasonal release schedule. Customers will always have the latest features, APIs, and security releases and will no longer need to budget IT time and resources for CPQ upgrades, making Salesforce CPQ & Billing the first truly SaaS CPQ solution. Another major strength of Salesforce is their focus on a single unified platform to support recurring revenue relationships. Recurring relationships include a mix of revenue models—one-time, subscription, warranty, and consumption. Along with CPQ functionality, Salesforce also supports billing, an integral part of the entire selling workflow. Salesforce CPQ & Billing functionality can be leveraged across the entire Salesforce cloud ecosystem making it the B2B sales engine across all Salesforce clouds.

Re-igniting the Competition: Customers Will Benefit

The Apttus pivot back to Salesforce does several things. First, it acknowledges that Salesforce is a powerhouse in the market. Second, it also acknowledges that CPQ should be an integral part of your sales platform, not functionality that is bolted-on in the middle. Finally, it re-ignites a competitive environment where both companies must realize their respective visions in order to differentiate. By executing their roadmaps, both Apttus and Salesforce will be able to clearly define the cases and subsequent markets that are best suited for their own strengths.

ABOUT NAVINT
At Navint, our expert understanding of the deeply connected, enterprise business processes and supporting technologies across the recurring revenue lifecycle uniquely enable us to advise clients on the best CPQ & billing solutions for their business. For more information about Navint or to learn how we can help, get in touch at sjoyce@navint.com.