I wrote previously about the experiences of KANA as a software company with NetSuite, based on a panel discussion with executives of three software companies at SuiteWorld. Also on the panel were Eloqua and RightNow Technologies. This was my second experience speaking to Eloqua, having first spoken with their CFO, Don Clarke, on a webinar about Hot 100 Software Companies. I was joined on the SuiteWorld panel by Eloqua’s Director of Revenue Accounting, Melinda O’Leary.
Eloqua is a JMP Hot 100, VC-backed, privately held company that provides SaaS-based marketing solutions to more than 900 enterprise and SMB clients. As the largest independent provider of marketing automation solutions, Eloqua serves over 60,000 users in more than 40 countries.
As an enterprise software company, Eloqua’s relationships with its customers can often be complex, spanning multiple products and services over multiple years. This challenge, coupled with a subscription billing model and numerous multi-element contracts, means that its revenue recognition requirements are greater than the average company. Additionally, Eloqua operates as a global company across six countries with multiple currencies. They used another SaaS-based accounting system before NetSuite, but high volumes and the need for seamless reporting strained the capabilities of the previous system and caused unnecessary heartburn.
Moving to NetSuite has enabled Eloqua to process transactions faster, with less cost, fewer people and fewer steps. One of Eloqua’s greatest challenges is handling revenue recognition efficiently and effectively. Leveraging NetSuite, Eloqua can seamlessly manage its multi-element contract revenue without having to resort to spreadsheets or cumbersome processes. Additionally, Eloqua is able to meet new EITF 08-01 revenue recognition requirements through NetSuite capabilities designed specifically for EITF 08-01.
As a global company, Eloqua leverages NetSuite OneWorld to manage multiple locations, with transparent roll-up of operations across countries while allowing employees in each location to enter expenses in their native currencies. NetSuite’s dashboard functionality enables the Eloqua finance team to provide the management team with vital snapshots about how the business is performing, with the ability to drill down into underlying detail as needed.
During the panel discussion, I asked Melinda why compliance mattered to a private company like Eloqua. Her response was clear.
“Even though we're private, several people rely upon us having accurate financial statements— investors, outside bankers, etc. But more importantly, as a venture-backed company, there will be an exit for our venture investors at some point in time,” Melinda said. “It could be a sale, could be a public offering, regardless, we want to make sure we have accurate revenue recognition policies and procedures now, because if you don’t it will impair your value dramatically.”
I also took the opportunity to ask Melinda and others on the panel about finance’s acceptance of the cloud.
As Melinda put it, “In talking to my peers, sometimes it's a shock—‘you use SaaS-based ERP?’ It's one of those reactions that you can imagine accountants feeling, can't go into server room and touch it, but once you get beyond that, its hard to imagine being on-premise again.
“Having latest and greatest, being able to adjust—that's Eloqua's philosophy,” Melinda added. “There weren't enough positive attributes for those on-premise systems. We looked at Microsoft Dynamics but we quickly looked away, never sure who Microsoft was going to buy and where R&D dollars will go next year.”
The other panelists expressed similar comments, indicating that they couldn’t imagine going back to an on-premise system and that the initial doubt expressed by finance has been replaced by excitement and enthusiasm.
The bottom line—Eloqua, while private, treats its financials like a public company and leverages NetSuite to enable this.
Ranga Bodla, Industry Marketing