CRN Interview: Best Software CEO Ron Verni

As the CEO of Best Software, Ron Verni has presided over a wave of mergers and acquisitions that span multiple markets in the SMB application space. The Best Software portfolio of products includes the ACT!, Accpac, MAS90, Peachtree, Platinum and SalesLogix software packages, and Best Software itself is a subsidiary of Sage Software in the United Kingdom.

As part of effort to integrate its diverse holdings, Best Software is gearing up to release its own suite of application software to compete more effectively with rivals. In an interview with CRN Editor-in-Chief Michael Vizard, Verni explains the company's overall strategy for competing more effectively against Microsoft and SAP.

CRN: Most recently, Best Software has outlined plans to develop an application suite. What's driving that effort?

VERNI: Our efforts there will take on two different dimensions. One is the idea of us creating a common desktop information framework so you have a common look and feel to sit over the products. Then we have an integration framework that allows all of the applications to speak to each other. Then we took that to the next logical step, which is the idea of suites. What we're hearing from customers is that they want a single vendor to deal with.

CRN: Given all the different product segments under the Best Software umbrella, how will you take these offerings to market?

VERNI: Right now, we think of ourselves as the Nabisco brand name with the little red flag up in the corner. But in this case it's the little green flag in the corner that says Best Software because our brands have such high recognition. What we're doing we call "inside out marketing." We're making sure our customers know about us, but we just want to make sure that they know about our entire product portfolio.

CRN: How do you differentiate Best Software from Microsoft?

VERNI: We have different philosophies. They're technology-focused and we're customer-focused. I've never met a small business [that has] ever bought technology. That's not what they do. They buy a solution to a problem. If we called up 100 of our customers, they wouldn't even know what database they're running underneath it. We also have this enormous customer base -- 2.3 million in the U.S. - and we're not going to all of a sudden wake up one day and say, "I'm sorry, we're going to leave you behind and you need to buy something entirely new." That would be a revolt in the making. When Microsoft does that to their customers, we have a lot of new customers to go after because they're going to put all their customers in play.

CRN: What is the connection between small business software like Intuit and Peachtree, and the rest of the market?

VERNI: Between Intuit and our Peachtree product, they have 99 percent of all the units sold in the world. If we continue to do our job -- which is make sure that our customers migrate to our products -- and as Intuit comes up with new market products, it's actually bad for everybody else because it takes all the oxygen out of the room. There are very few big companies that all of a sudden pop up. They grow from [smaller] companies.

CRN: What's your take on the ASP model that seems to be in vogue in the SMB markets, especially as rivals such as Salesforce.com gain momentum?

VERNI: One of the reasons we're so excited about the Accpac acquisition is because Accpac CRM actually can run on the Web or desktop. It's a total ASP model. If you want ASP, we have ASP. We also have EPeachtree.com, which is probably -- in user counts at least -- probably No. 2 in the world. So we have tens of thousands of customers who are running on an ASP model right now. But the beauty of our model is you can run it ASP or tomorrow you can move it down to the desktop. It's constant freedom of choice.

CRN: How is Best Software segmenting the overall market as it tries to compete with Microsoft and SAP?

VERNI: Assuming that nothing is perfect and that there are always gray areas of overlap, our definition is that we have the small market, the midmarket and then we have what we call the small enterprise market. We're trying to make those delineations so folks can understand our products. Part of this effort is also to reduce some of the channel conflict.

CRN: In terms of demand generation, how much work does Best Software do compared to what the partners do?

VERNI: We do a lot of lead generation for partners and that's part of our commitment. We actually help with pre-screening and say this customer really looks like this. The spilt depends on the different businesses. It can be as much as 60 percent us and 40 percent them. But it's generally in the 50-50, 60-40 area.

CRN: Recently, you divested Accountmate from Best Software. What was the thinking behind that move?

VERNI: It didn't fit the portfolio. We bought Softline, which Accountmate was part of. But we really bought Softline because they're No. 1 in South Africa and they have a huge presence in Australia. We did this as a group acquisition through Sage and then they had their North American businesses. When we analyzed it, the challenge we had with Accountmate is that every customer always has their own application so it's very difficult to move them to someplace else or to give them a lifetime. That wasn't our business model, so we went to the management team and offered them the opportunity to buy the company. We could have gotten a lot more money from a lot of other places, but those folks will probably disintermediate those customers, and we didn't want to do that. Part of our success is we have this laser-beam focus on what we do.

CRN: What is the relationship between Best Software and Sage?

VERNI: Our parent company is Sage. We have a market capitalization of about $4 [billion] to $5 billion. And I have a dual role. I run North America but I also sit on the Sage board. We have constant global, regional, local touch. The reason we're not called Sage is someone owned the trademark; simple as that. So we have bought a company called Best Software, but we would prefer to be Sage. Today, Best is 40 percent to 50 percent of Sage's revenue.

CRN: Given all that, what are your longer-term goals for the company?

VERNI: Right now we're in a unique position where it's all about execution. We laid the strategy out last year. We want to have customers for life and one face to all customers. We've done so many acquisitions; we've done 50 over the last three years. We're integrating them now. And the whole idea of the lifetime value of the customer is the thing that we really, really, really need to do because we have so many of them.

CRN: And how will partners play a role in making that all happen?

VERNI: In some cases it means having them partner with another partner so that they present a united front. We told the partners that we have a great portfolio and the reason we did this is to make sure that every time you go to a deal you've got something in the bag if you want it. But partners only have so much bandwidth. So if they're saying look, I'm happy as a CRM partner or an accounting partner, our job now is to be a broker of relationships. That's why the idea of the suite is so important. You want to make sure people realize you have the whole portfolio.