1Mby1M Deal Radar 2010: Accrisoft

Accrisoft Corporation provides SaaS solutions to organizations of all types. The company’s main products are Accrisoft Freedom, a content management system, and Accrisoft Business Tools, a software suite designed for website development companies to help manage their business and automate processes. The aim is to enable companies to manage their business from a single place by offering a high degree of control combined with depth of features.

Accrisoft was founded by president and CEO Jeff Kline in 1999 and is based in Boca Raton, Florida. Kline has been in information technology for over twenty years, building companies in software development, office automation, and Internet technology. A serial entrepreneur, Kline owned a data storage company that needed a website. He worked with a website development company on the site and, recognizing the vast potential of the website development market, he bought that company. As Kline became familiar with the process involved in building websites for clients, he realized that clients were paying a great deal of money to make minor changes to their sites. He also saw that that a great deal of time was spent on repeatable requests; for example, everyone wanted an interactive calendar of events. He recognized the need for a software system that made it easy for nontechnical users to update and maintain websites on their own but that was flexible enough to keep pace in the rapidly-evolving world of the Web. With this in mind, he began the development of Accrisoft Freedom.

One of Accrisoft’s two main products, this tool allows users to build and update websites but also to provide dynamic content, implement e-commerce, automate business processes, track and measure marketing results, enable social networking, and integrate with Google and other third-party applications. As the company grew and acquired resellers, Kline realized that these companies needed a way to manage their businesses. Most were technical masters but not seasoned business owners, so when they found that their businesses were growing rapidly, they needed tools to manage that growth. This led to the development of Accrisoft Business Tools, which is part of Accrisoft Freedom.

The company also offers Accrisoft Business Essentials, which is a kind of entry-level version of Accrisoft Freedom that can be integrated into a customer’s website. Its features are offered individually through an SaaS model and include, among other things, billing, document storage, e-mail marketing, an employee intranet, a file manager, payment tools, banner ads, and forums.

The market landscape was at the time not entirely different from today’s; there are many companies out there but few good ones. Other notable Web content management systems are Vignette, spun off of CNET and an early player in the field; TeamSite from Autonomy Interwoven, ExpressionEngine from Ellis Labs; IBM Lotus Web Content Management; Microsoft’s SharePoint; and large number of smaller developers of PHP-based systems. In 1999 the Web was still in its infancy, websites could do less, and the public was generally less knowledgeable about them. Of course, there is no longer the need to convince most companies that they should have a website; now the main challenge is showing them how much better their website can be. Accrisoft feels that the quality of its software development and management teams has allowed it to be an innovator. More specifically, most competitors can’t offer website development companies the same level of control and ease of use for a comparable price.

The company got its early traction by serving as its own “reseller,” through Accrinet. Accrinet targeted website development in two markets: chambers of commerce and Jewish community centers. Because member management is one of the software package’s strongest points, it targeted organizations for which member management is critical.

At present, Accrisoft is focusing on three market segments as potential resellers: hosting companies, website development and design companies, and vertical market specialists in a wide range of markets including chambers of commerce, educational institutions, religious organizations, government organizations, and nonprofits. Accrisoft currently has approximately 300 active clients in addition to the clients of its resellers. It estimates that approximately 1,000 active websites use its software.

Hosting companies Accrisoft is targeting are those that offer Web hosting but would like to add value to their offerings. Website development companies, whether they operate within a vertical market or not, typically offer graphic design, websites, and custom Web development to their clients.

Current annual revenue is $3 million; after expenses this leaves $1 million, the majority of which is reinvested in software development. Accrisoft has been financed by the owners, through initial capital investment and sweat equity. For several years after the company’s founding, the management team worked without pay. At one point they entertained the idea of venture capital and spoke with several people about their options, but they realized they could finance Accrisoft internally and didn’t have to give away control of the company. Now, however, Accrisoft feels ready to launch to the next level. The company is currently in discussions with several venture capitalists as well as larger companies that are interested in Accrisoft because of the software package and client list.

At this stage in the company’s growth, its primary goal is to acquire additional, high-visibility resellers to extend market share and reach new markets. Earlier in the company’s history, the aim was to acquire clients of its own, but recently the team has shifted its focus. It split off the website development division from the software division; the website development side is now called Accrinet and acts as one of Accrisoft’s resellers. Accrisoft continues to provide software, focusing on its network of resellers.

Accrisoft’s team intends to build the company using the strategy of adding distribution channels. At this point, there isn’t a specific exit strategy in place. The goal is to continually grow and earn greater revenue from a wider network of resellers.

Recommended Readings
ERP – The Path to Success or The Road to Hell? (Paul Sita of Innovative IT Consulting writing on The Business Management Blog)
Deal Radar 2010: Nimbus Partners
Deal Radar 2009: Yola

This segment is a part in the series : 1Mby1M Deal Radar 2010