Goodbye Excel Spreadsheets. Hello Anaplan!

Even prior to Covid-19, Corporate Performance Management represented a massive, growing market levered to the digital transformation mega-trend. Within this space, Anaplan is a cloud-native player and has continued to “win” throughout the ongoing pandemic.

Even prior to Covid-19, Corporate Performance Management represented a massive, growing market levered to the digital transformation mega-trend. Within this space, Anaplan is a cloud-native player and has continued to “win” throughout the ongoing pandemic.

Company Overview and Industry Dynamics…

Anaplan offers a Connected Planning platform that addresses the limitations of conventional planning tools, including (i) collaboration, (ii) flexibility with scenario analysis and (iii) working with disparate data sources. The Company’s software-as-a-service (SaaS) solution enables real-time, collaborative planning across key functional departments of an organization, including finance, supply chain, sales and human resources. Additionally, by integrating with data sources from multiple vendors, Connected Planning provides one system of record across the organization and enables a “single-source of truth.” Anaplan serves Global 2000 (G2K) clients, such as Coca-Cola and ServiceNow, and has >1,300 customers today. Founded in 2006 (commercially launched in 2010), the Company is headquartered in San Francisco, CA.

Anaplan has gained share by capturing large global organizations in need of Connected Planning solutions not currently provided by: (i) legacy incumbents, undergoing the transition from on-premise to cloud, that offer financial planning solutions limited in both scope and interoperability across functional areas (e.g., finance applications only); (ii) cloud-based point solutions that offer singular modules of the Anaplan suite, but are unable to scale with large organizations in complexity; and, (iii) manual processes largely captured by Microsoft Excel.

Anaplan Has Been Well-Positioned to Win (Even Pre-Covid)…

Historically, planning has been an annual process run by the finance departments in a backward-looking manner. With siloed data amalgamated from a patchwork of disparate applications, spreadsheets and other manual processes, planning cycles are notably complex, lengthy and tainted by data inconsistencies. Additionally, legacy on-premise solutions require ongoing assistance from IT departments for continuous support and maintenance. Secular tailwinds (e.g., the transition to cloud), accelerated by Covid-19, have shifted planning to a year-round activity encompassing all departments, expanding the use of Anaplan’s cloud-native product offerings across the organization.

Covid-19 has presented a unique opportunity (in time) to win outsized share from financial consolidation players (a.k.a. legacy incumbents), which represent a ~$4bn legacy installed base (2018A, IDC). With legacy players (e.g., Oracle, SAP) historically selling on-premise, perpetual license software, accelerated cloud replacements driven by Covid-19 provide Anaplan with an entry point and meaningful opportunities to win RFPs (“jump balls”). In addition to the preference for cloud-native solutions, customers value Anaplan’s modern, multi-tenant infrastructure that ensures long-term flexibility and scalability. Oracle’s Hyperion solution, for example, is estimated to have a unique customer base of ~7,000. With an average contract length of five years, the renewal cycle could produce up to 1,400 “jump balls” in each of the next several years for Anaplan to go after.

The Anaplan platform is often adopted within a specific line of business, however, once customers see the benefits for their initial use cases, they often increase the number of users, add new use cases as well as expand to different lines of business and geographies. This “honeycomb” model has proven very successful with net revenue retention rates consistently >120% and the Top 25 customers growing annual recurring revenue (ARR) from $360k to $3.5mm today. Interestingly, Anaplan has developed a unique partner ecosystem of system integrators (SIs) and independent service vendors (ISVs), including Accenture, KPMG, Wipro and Deloitte, to help not only with initial platform implementation, but also customer upsell.

Looking Ahead…

Covid-19 has fundamentally changed the technological requirements of today’s corporations. With workforces likely to remain / become increasingly distributed post-Covid, the need for (i) cloud applications, (ii) platforms enabling visibility (e.g., data) and collaboration across the organization as well as (iii) tools that unify firm operations / financials across global footprints will be critical. Anaplan’s product suite solves all of these needs and, therefore, will continue to thrive well after the world normalizes. Furthermore, as a cloud-native company, Anaplan will “win” this market because all of its attention is / can be on sales (i.e., winning customers) – this is a luxury relative to its competitors, most of which much first modernize their legacy technologies to fit today’s requirements.


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Student comments on Goodbye Excel Spreadsheets. Hello Anaplan!

  1. Very interesting case, thank you. Never heard about Anaplan, so good to know now. I was always thinking the software types and clouds are coming in and out, but Excel will be always there. Now looks like Anaplan has everything for individual and organizational planning, not only for finance but across many functions. I am wondering how much it is friendly with existing on-premise solutions that captures actual performance data such as ERP solutions. Will explore Anaplan in more detail.

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