In 2007 Therese Tucker, founder and CEO of BlackLine, had a choice to make: move all the accounting and finance software BlackLine provides customers to the cloud, or keep some of it on-premise.
There were some major upsides to becoming a pureplay SaaS provider before it was fashionable, there was lower risk for the customer, easier to install, didn’t require any hardware and the whole system could more easily maintained and upgraded by BlackLine.
But there were two reasons not to move to the cloud-based SaaS model.
“We knew that there would be big companies that would not allow their financial information to be off-prem,” Tucker told Which-50 during an interview between sessions at the company’s Australian user conference last week.
“And with on-prem you get a much bigger amount of money upfront. Well we were bootstrapped.”
In the end the finance and accounting software company decided to move to a SaaS model, accepting they would forgo customers to build the company for the long-term. To ease the cash crunch, Tucker said the company chose to move to an annual billing cycle, rather than quarterly.
The decision played differently depending on the geography.
For example, Australia was the BlackLine’s first international market, buoyed by local business’s enthusiasm for cloud technology. But the business lost many deals in Europe because it would not offer on-prem software, Tucker said.
But those attitudes have started to shift over the last 12 months. Companies that had initially rejected the software because the cloud was too risky, are now back in the pipeline.
“I had a very large company just six months ago in London — it was one that we had lost years earlier because they would only do on-prem — now they hate their on-prem system and they asked do you host in Amazon?”
“This is the company that five years prior wouldn’t even consider cloud, and now they are interested in public cloud.”
BlackLine’s software currently runs solely from co-located data centres, but Tucker says the company is now assessing if they could move to public cloud.
“We got companies to put their financial information in the cloud way before anybody else, but we had to have our own private data centers,” she said.
“I believe that the comfort level with security will eventually let us move to public cloud. Which is a really good thing.”
The possible move would mean the company could remove the costs of around running their own data centres, which includes buying or renting equipment that is capable of handling peak loads at year-end when companies are all trying to close their books.
Whereas with public cloud, offered by the likes of Google, Microsoft Azure and AWS, the service can be scaled up when extra capacity is needed and then scale back down, only paying for what you use.
Tucker believes if implemented well using public cloud be a cost saving and offer performance advantages by having a data centre in every locale.
The company has not selected a public cloud provider yet. It’s first foray into public cloud will launch in a few months, using AWS to build a machine learning feature which will be trialled by in beta with a handful of customers. Tucker noted that the ML feature is very different to migrating the full core platform which services 2,700 other customers.