Investments

First Principles of Building a Great Services Firm

September 4, 2025 by Chris Barbin Leave a Comment

Building a great services firm isn’t easy, but it isn’t rocket science either. It really comes down to three simple things: customers, team, and financials.

I like to think of these as dials that you can turn up or down based on the conditions of the moment. Rarely are these dials perfectly balanced. During the Great Resignation or in the war for AI talent, the “team” dial may need to get spun up to hire and retain the best people. In a downturn, like the Great Recession, the “financials” dial may need greater attention because customers and capital aren’t as plentiful. And, when competition heats up or buyer behaviors fundamentally shift, the “customers” dial may need the most attention.

Leadership is the art of turning the right dial at the right moment without breaking the system.

So how do leaders know when and how to tune those dials? I wish there was an easy answer.

A lot of it comes down to experience and intuition, which is why investors tend to gravitate toward repeat founders or executives who’ve been in the seat before. They’ve already made the rookie mistakes. They’ve seen how cranking one dial in a business can unexpectedly throw the system off balance, or create consequences that can be difficult to unravel.

But that doesn’t mean first-timers can’t get it right. Many do. And often, they do it by looking at situations based on first principles. First principles thinking forces you to strip away complexity, assumptions and circumstances until you’re left with the foundational truths of what makes a great business. And what makes yours a great business.

First principles thinking forces you to strip away complexity, assumptions and circumstances until you’re left with the foundational truths of what makes a great business. And what makes yours a great business.

After 30+ years in tech services, I’ve seen a lot of different leaders and firms, and the great ones all focus on certain first principles. Every firm may have a slightly different view of their first principles, but here are six principles that have guided me and many other successful services leaders over the years.

#1 – Customer-First

Great firms are almost always obsessively customer-focused. Everything starts and ends with the customer in mind. Even when the customer dial has to get turned down (say to rebuild the team or improve profitability), the best firms still think outside-in, not inside-out. They don’t let themselves fall into a “guild” mindset, where they define themselves by what their team is great at, or what their partners are pushing that quarter, or what their experts want to build. They start with the customer’s problems and focus on solving them. They don’t force fit a solution or sell something they know won’t work for short term gain, because they know trust, referrals and customer expansion are the lifeblood of a services firm.

#2 – Deep Expertise

At the end of the day, customers hire a service partner to solve a problem they can’t solve on their own. They look for proof a firm has solved their problem before, and can confidently do it again. Without real depth, whether it’s in a technology, an industry or a functional area, you’ll never build the credibility needed to become indispensable. It’s why we push the importance of focus so hard in our conversations. The best firms know they can’t be all things to all people, which is why they double down on a specific domain and specific types of customers. It’s why they build unique IP and strong thought leadership programs – to make their expertise visible and establish trust.

#3 – Personalized Service at Scale

Deep expertise is only part of the equation. To be a trusted partner, services firms must apply that expertise to the specific needs of a customer (their industry, size, culture, tech stack, current processes and desired future state). However, firms that sell everything bespoke will struggle in sales and marketing. Margins will suffer because the work isn’t predictable or efficient. The best firms figure out how to package and deliver personalized services at scale. They institutionalize what consultants learn across customer engagements, codify offerings, and productize portions of their work so it can be delivered repeatedly without losing the personal touch. Increasingly, AI is making this far easier: summarizing interactions, surfacing insights in the right context, and freeing humans to focus on relationships and go deeper.

#4 – A Talent Engine

In software companies, the asset is the code. In services firms, it’s the people. In the AI era, those people will be more and more supported by code, however, people want to work with people. They want partners who know their business, who can work through tough issues, and shoulder the risk alongside them. The best firms understand this and don’t treat talent like a commodity. They also don’t just hire for what a person can do today, they invest in what they could become tomorrow, creating systems for learning, mentorship and mobility. As automation takes over repeatable tasks and customers expect more strategic thinking from their partners, the bar for talent will only rise, and the half-life of skills will shrink. Firms that rely solely on outside hiring to keep up will always be playing catch-up and paying a premium. The ones who grow their own talent? They’ll build a bench the market can’t easily replicate.

#5 – Outcome-Aligned Incentives

In the best-run services firms, goals aren’t vague or siloed. They’re clearly defined, communicated, and grounded in measurable outcomes that matter to business and customer success. A delivery lead should know that success isn’t just hitting a utilization target, it’s about delivering results with high customer satisfaction. A seller should know that it’s not about closing the biggest deal, it’s about closing the right deal that the firm can deliver well and grow over time. Finance should know that success isn’t just about tracking and containing costs, it’s about partnering with the business to make smart decisions that will lead to growth. Build compensation plans and total rewards plans based on the outcomes and behaviors you want to see across the business. Build systems of accountability and recognition programs that reinforce those behaviors, and as a leader, model what you want to see.

#6 – Continuous Improvement

Most services firms are born to solve specific customer problems, but the best firms don’t stop there. They make it their mission to find smarter, faster, cheaper ways to solve those problems, or to continuously move up the value chain to solve bigger and more strategic problems. They’re constantly thinking about how to automate steps, templatize repeatable pieces, or use AI to reduce friction. High-performing firms constantly ask: Are our teams operating at their best? Are we investing in the right places? Are we improving margins without burning out people? Continuous improvement isn’t about chasing perfection, it’s about developing the muscle to learn, adapt, and get better every quarter.

Of these first principles, it’s hard to say what the most important ones are as they’re all pretty important. However, I can tell you what the two hardest have been for me – personalizing services at scale and aligning outcomes with incentives. But get these right, and hold on tight!

Using AI to Support First Principles

Everyone today is talking about how AI is disrupting professional services, and that is absolutely the case. It’s rewriting the way firms market, sell, deliver and compete. However, the firms that will win the next decade won’t be the ones shouting about AI, they’ll be the ones quietly aiming AI at supporting these first principles.

They’ll use AI to understand customers better, predict their needs and respond faster. They’ll use it to capture, elevate and embed institutional knowledge across teams so they can bring deeper expertise to customers and deliver more personalized services at scale. They’ll use AI to hire better, tailor learning paths and create talent moats. They’ll use AI to align and measure outcomes, and most importantly, to continuously improve every facet of their business.

Every industry goes through eras of disruption. Navigating this one will require leaders to think hard about their first principles and then tune the business for the situation. Don’t expect to get it right 100% of the time, but if you stay true to what makes a great services firm – and what makes your firm great – you’ll be in the right vicinity.

If this resonates, you’ll like our upcoming eBook on the rise of the AI-native services firm. It goes deep into how to operationalize these principles with today’s tech and tomorrow’s teams.

BeyondID + KeyData Cyber: From Early Investment to Identity Powerhouse

August 12, 2025 by Chris Barbin Leave a Comment

It’s official! BeyondID has been acquired by KeyData Cyber, a North American leader in Identity and Access Management (IAM).

This acquisition establishes a pure-play leader in total identity security, with more than 200 identity experts across 3 continents. A leader that can deliver industry-centric, identity solutions across across all leading identity platforms, including Okta, CyberArk, Sailpoint, Saviynt, Microsoft, BeyondTrust and Ping Identity. Not just IAM solutions, but Privileged Access Management (PAM), Identity Governance (IGA), and AI-powered Managed Identity Security Services.

Together, BeyondID and KeyData Cyber create the global identity partner CISOs need to support them across any identity platform and any identity type (from humans to machines and AI agents), for a secure total experience.

You can read more about the announcement in the press release here.

The Initial Partnership and Our First Investment

As we celebrate this next phase of BeyondID’s journey, I can’t help but reflect back on the partnership that Tercera and BeyondID have built over the last five years.

It was 2020 when I met Arun Shrestha, the CEO of an Okta implementation partner named BeyondID, through former colleagues who were at Okta. At the time, Arun and his co-founders were only a few years into building BeyondID and they weren’t actively looking to take on capital. We hadn’t even officially launched Tercera yet, but were starting to have conversations. The chemistry and connection was instantaneous.

Both Arun and I had led captive professional services organizations within software companies. Arun had led customer success and services at Okta, prior to starting BeyondID. I had been the CIO and head of worldwide services at Borland Software implementing Salesforce, prior to founding Appirio. We had both led teams within integration companies – Arun at SeeBeyond, and me at Webmethods. Through these experiences, we had seen first-hand the potential of getting in early with an ISV, and bonded over the value of channel relationships, customer obsession, and what it took to build global, distributed teams.

Less than five months later, BeyondID became Tercera’s first investment. The firm was the perfect fit for Tercera’s thesis to support next generation IT services firms in high growth software ecosystems and market segments, through a mix of capital, counsel and connections. Looking back at our original investment memo, these were the reasons we were so excited about BeyondID at the time:

A great position in a large and growing market (IAM): At the time, IAM was a $12 billion market, growing consistently in the double digits. Cloud-focused vendors and partners were outpacing the broader market as companies moved their operations online – especially during COVID – and identity and zero-trust security were poised to become increasingly important in a growing threat landscape. The BeyondID team had proven experience and connections here.

A potential #1 partner in a Tercera 30 ecosystem: At the time of our investment, Okta was an early innovator in SaaS security with $770 million in LTM revenue. It was growing ~50% per year, and really starting to build out their partner ecosystem as they looked toward enterprise customers, global expansion and platform diversification. BeyondID was already one of Okta’s top partners, and with investment could scale alongside this Market Mover.

Tech-enabled and IP-centric: Even as a young firm, BeyondID recognized the value and differentiation that came from IP. They had begun building out their Identity Command Center and packaged Integration-as-a-Service offerings that connected Okta with business critical apps like EPIC, Shopify, ADP and SAP. This was a big differentiator with enterprise customers, and with investment, they had plans to expand on this IP into new areas.

Over the next four years, we’ve seen identity remain a top CISO priority – even more so with the acceleration in AI. Okta has continued to be a great partner. Even through the SaaS-lash of 2022 and 2023, Okta grew its footprint and invested in their partner ecosystem. The company reported ~$2.6 billion in FY25 revenue, and has grown its partner ecosystem more than 4x since we first invested, building partnerships with many of the GSIs.

BeyondID has serviced thousands of clients, including names like Northern Trust, Airbnb, Johnson Financial Group and Biogen; and they were named an Okta Partner of the Year for the last three years.

The Next Phase in the Journey

As the BeyondID team looked to the future, they knew the company needed scale, even more industry depth and a broader mix of platform capabilities to hit that next stage of growth, and service larger and larger accounts.

Enter KeyData Cyber, a company that couldn’t be more complementary to BeyondID. Both firms share a vision around identity-first security. Both firms have expertise in complex identity engagements, with clients in highly-regulated industries like financial services, healthcare and public sector. Both firms have complementary strengths, partnerships and regional footprints.

Together, they can do more. They can be the partner CISOs need to deliver on identity-first, zero-trust strategies across multiple platforms and geographies.

Relationships Matter

All this is a reminder to me that great partnerships don’t just happen. They’re built and fostered over time, through the best of times and the worst of times.

The BeyondID co-founders initially connected at former companies, before coming together to build this company. Without our friends at Okta, we may have never met Arun and team. Support from leaders like Eric Kelleher, Chael Banks and Susan St. Ledger, along with many others, have been instrumental in driving growth over the years.

Without the introduction from Houlihan Lokey, we may not have made the connection with the KeyData Cyber team and their investors at CIVC. And we may have not fully realized the potential of this combination without the support and insights from strong board members like BeyondID’s independent director Toni Pavlovich and KeyData Cyber’s independent director Sam Sliman, along with advisors like Mike Epner.

Last, but certainly not least, I am so appreciative of the partnership that the Tercera team built with Arun and his broader leadership team over the years. Thank you for taking a bet on us when we were just getting started, all the learnings and fun times along the way.

We couldn’t be more excited to expand on this partnership and be part of the next phase in this team’s journey as both a minority investor and advisor working alongside KeyData Cyber CEO Dustin Hoff and CIVC.

If you want to get a sense for what’s next, check out the blog from Arun and this overview from KeyData Cyber.

Onward!

Talent strategies in Africa: How to choose your ideal market

May 7, 2025 by Orion Zydlewski Leave a Comment

IT services has always been an industry that succeeds due to people. While AI is rewriting parts of the playbook, global talent remains a critical chapter. What’s changing is the way companies think about where and how they invest in that talent. Today, it’s about more than cost—it’s about capability, culture, and continuity.

One region expanding the global talent landscape is Africa. Given that the continent harbors the world’s fastest-growing workforce, paired with rising costs and employer saturation in other international talent markets, we called out Africa’s rise as one of our 2025 services trends.

With its youthful population, expanding tech ecosystems, and increasing government support, the continent offers a range of opportunities for building and scaling delivery capabilities. However, the continent is not a monolith; its markets vary widely in maturity, infrastructure, and talent readiness. Understanding these nuances is crucial for aligning your global delivery strategy with the right African markets.

In 2024, the Tercera team visited 7 countries on the continent in an effort to understand more about the different markets and how talent and business dynamics are evolving here. Having met with dozens of leaders who are building and investing in the region, we walked away extremely excited about the potential for Africa, and more educated on which regions might be ready for certain firms.

We’ve organized some of the most notable markets in Africa on the spectrum of those that have the most mature tech talent ecosystems to those that are just beginning to build this capacity in order to meet global demand. It should also be noted that while I’ll make this breakdown on the country level, it’s often the existence of specific international-level metropolitan areas (think Cairo, Cape Town, Johannesburg, and Nairobi) that drive the viability of these markets.

A Closer Look:

Two clear standouts in this category — South Africa and Egypt, boast the majority of the top-ranked universities in Africa. This concentration of quality academic opportunities and the presence of large international players such as AWS have made South Africa, in particular, a very attractive market for tech talent in Africa. Our portfolio company, Black Diamond, has had great success engaging experienced contractors in the country over the past few years. In Egypt, the tech ecosystem is equally vibrant, with a well-established talent base that can navigate (linguistically, skill-wise and culturally), work across both European and US markets as well as the Saudi and Gulf markets.

Mauritius is also notable as an attractive gateway into Africa, offering strong infrastructure, a reliable legal system, political stability, and generous incentives for foreign businesses. Despite its small size (population of only 1.3 million), Mauritius hosts significant offices of Accenture, Infosys, and the African Leadership University, reflecting a strong, though limited, talent pool.

Considerations:

While these countries offer immediate access to skilled talent, they also come with higher competition and potentially higher costs. It’s essential to weigh the benefits of quick scalability against the challenges of talent retention and wage inflation.

A Closer Look:

In Kenya, the tech ecosystem has grown rapidly over the past decade. But with that growth has come challenges: high attrition, uneven training standards and a wide variability in salary expectations. A good approach in a market like this is partnering with organizations that have deep knowledge of the talent pipeline. In Kenya, for example, Tana stands out as a tech and data staffing firm connecting the large pool of entry-level tech talent with international opportunities. Their model is training junior professionals in in-demand skills while fostering strong company culture, offering a sustainable way to scale.

In markets like Rwanda and Ghana, while the IT services ecosystems are smaller in size, governments and private institutions are eager to attract international companies and often provide infrastructure and incentive support to facilitate investment from abroad. In Rwanda for example, a number of governmental and non-governmental organizations, including the Rwanda Development Board and Rwanda GBS Growth Initiative, not only help international companies establish a presence in the country, but ensure that they are prepared to navigate the business environment and have the necessary connections and resources to succeed.

A Closer Look:

As Africa’s most populous country and a leading economy, Nigeria presents significant opportunities in IT services, driven by a robust startup ecosystem. Initiatives like Itana (formerly Talent City), illustrate strategic efforts to establish digital free zones and attract international tech companies. However, Nigeria’s market entry comes with considerable challenges, notably macroeconomic instability characterized by currency fluctuations and inflationary pressures, infrastructural challenges including unreliable power and internet connectivity, and ongoing security and political risks. Additionally, intense competition for skilled talent has driven significant wage increases, creating cost pressures and difficulties in talent retention. Navigating Nigeria’s complex environment effectively typically requires partnerships with agile local entities that are well-versed in managing these nuanced challenges.

Senegal and Côte D’Ivoire are also rising stars in West Africa. With currencies pegged to the Euro and relatively stable democratic institutions, these countries have seen significant economic growth in recent years. One of our portfolio companies, Valiantys, has invested in developing Atlassian talent in Senegal and is now seeing strong returns across its global delivery model with talent working across both French and English-speaking teams. However, companies that do business primarily in English may have more trouble finding bilingual talent in these markets, and will need to invest in training locally in the skills they need.

Considerations:

Investing in these markets requires a long-term commitment to talent development and a company culture that drives retention. Partnering with local educational institutions and training programs can help build a sustainable talent pipeline aligned with your company’s needs.

A Closer Look:

Take Cameroon, for instance. It benefits from both French and English-speaking populations, respected academic institutions, and a growing tech community—particularly around the Silicon Mountain startup scene in Buea. But at the same time, political instability looms, and companies without prior experience in the region may be best served to wait. The country’s October elections may bring clarity—or prolong the uncertainty.

The timeline on waiting isn’t precise, especially across varied markets. Consider the Democratic Republic of Congo (DRC). While home to Kinshasa, the world’s largest French-speaking city, the country faces corruption and conflict. Predicting when, or if, it will evolve into a business-friendly environment is difficult even for regional experts.

Considerations:

For companies with long-term strategies, keeping an eye on these markets is advisable. Engaging in exploratory partnerships or pilot programs can provide insights and position your firm advantageously as conditions improve.

Winning in Africa Starts with Understanding

At Tercera, we’ve made understanding Africa’s diverse talent ecosystems a priority over the past year. That’s not accidental.

The continent is home to the world’s youngest and fastest-growing population. In an era where many economies are facing shrinking labor and consumer markets, Africa stands out as a long-term growth opportunity.

Just as no two companies are alike, no two African markets are either. Whether you’re looking to build talent from the ground up, tap into an established workforce, or monitor for future opportunities, intentionality is key.

A plethora of opportunities exist for IT services firms in Africa. Those who take the time to understand the nuances of talent markets across the continent and act strategically will be ahead of the curve as the global services landscape evolves.

IBM & Hakkoda: The magic behind the match

April 8, 2025 by Chris Barbin Leave a Comment

This week IBM announced the acquisition of Hakkoda, the Tercera-backed consultancy that, in less than four years, has become one of the preeminent leaders in data and AI.

IBM’s press release and this blog from Hakkoda CEO, Erik Duffield, have all the details for why this is such a great match for both companies. But here’s the short version:

Hakkoda’s deep-rooted partnerships with data platform providers like Snowflake, its industry depth, and its asset-embedded delivery model will extend IBM’s already rich portfolio of data and AI services.

On the flip side, Hakkoda now has a global platform that will allow them to expand into new verticals and regions, and stay on the leading edge of data and AI – solving problems for the largest companies and governmental agencies in the world.

As Hakkoda CEO Erik Duffield puts it: “IBM is not just one of the best known names in tech—they’re a 100+ year old startup, leading in AI, quantum and cloud. Their investment in innovation is unmatched. We won’t just be observing the biggest transformation in history, we will be in the arena shaping it.”

As Hakkoda CEO Erik Duffield puts it: “IBM is not just one of the best known names in tech—they’re a 100+ year old startup, leading in AI, quantum and cloud. Their investment in innovation is unmatched. We won’t just be observing the biggest transformation in history, we will be in the arena shaping it.”

Effective immediately, Hakkoda will start to operate as Hakkoda, an IBM company, with its leadership and focus on Snowflake remaining – something that was incredibly important to the Hakkoda team. The opportunity and impact Hakkoda can make just got a lot bigger.

A company built for greatness starts with a trusted team

We often get asked how Hakkoda became so successful in such a short period of time. How it went from a glimmer of an idea in 2021, to a 300+ person consultancy with global delivery capabilities across LATAM, India and EMEA in 2025.

This is a company that won three-straight Partner of the Year awards from Snowflake in its four years of existence, most recently being named Snowflake’s Healthcare & Life Sciences Partner of the Year. Not to mention receiving Partner of the Year awards from Coalesce, Fivetran and Matillion, plus awards from CIO, IDC and others.

Like most great companies, it starts with the people.

The leadership team that Erik assembled was purpose built to scale. A team uniquely suited to grow an enterprise-grade technology and consulting organization, with past roles at large global SIs like McKinsey, Deloitte and KPMG as well as high growth tech firms like Appirio. Their unique balance of skills, coupled with a strong foundation of mutual trust, meant they could move faster than most.

Trust is like grease in a wheel. Without it, gears grind, progress slows and whole systems seize up. With it, teams can operate more efficiently, solve problems faster and GSD. The fact that 6 of the 8 C-level leaders had worked together before and the co-founders literally climbed a mountain together certainly helps with the trust factor.

Trust is like grease in a wheel. Without it, gears grid, progress slows and whole systems seize up. With it, teams can operate more efficiently, solve problems faster and GSD.

Yet it’s the team around these leaders that has truly shaped the company’s trajectory. Hakkoda consistently attracts some of the best and brightest talent in data and AI – from the interns they hire out of school to their seasoned industry leaders. Hakkoda’s unique culture, and the entrepreneurial spirit woven into the company’s employee base, has kept it one step ahead in data and AI, a space where others are finding it hard to keep pace. It’s not a happy accident that one of Hakkoda’s co-founders is a Chief Talent, Culture and Wellness Officer.

Hakkoda consistently attracts some of the best and brightest talent in data and AI – from the interns they hire out of school to their seasoned industry leaders.

5 lessons from Hakkoda’s success

Beyond having the right team, here are 5 other lessons from Hakkoda’s success that other growth-stage services leaders may want to factor into their own plans:

1. Build – don’t just buy – talent. From its inception, Hakkoda has taken a programmatic approach to acquiring and developing global talent. The company’s investment in university partnerships, learning & development, nearshore delivery centers in Costa Rica, India and Portugal, has formed a talent flywheel that benefits the company, customers, and employees who have been able to grow with the company.

2. Invest in go-to-market. Hakkoda’s early and intentional investment in a cohesive GTM strategy and a well run sales, marketing and alliance management function paid off in spades. Hakkoda’s brand and thought leadership, the partner relationships it fostered, and the company’s clear vertical focus played a big role in the company’s growth and reputation among potential acquirers.

3. Leverage AI early and often. Not surprising for the space they play in, Hakkoda has been at the forefront of incorporating AI into their internal processes and customer offerings. Hakkoda’s AI powered assets and solutions have been able to speed data modernization projects, complement their consultants’ deep domain expertise, and enable their internal teams to scale.

4. Pick a lane, but keep your options open. From Day 1, Hakkoda has been laser focused on Snowflake. That purity of focus, along with their willingness to say no to competitive work, helped them stand out with Snowflake. But their breadth of data expertise and the competencies and partnerships they built with companies like AWS, Alation, Fivetran, Coalesce, Matillion, Sigma and data.world (to name a few) is what won them a place with largest customers and future growth.

5. Select your partners wisely. Growing a services business isn’t easy – there will inevitably be ups and downs so having the right partners alongside you that are aligned with your goals can make a big difference. The Tercera and Hakkoda partnership worked well because we were aligned from the start on the market opportunity, timeline, vision and where value could be created.

That also applies to your extended group of partners. The support that our own long-term partner Trilantic has provided Tercera over the years, along with the support from Advisors like Guggenheim Partners throughout this process has been invaluable.

We could expand on these lessons for days, and maybe one day we will. But for now, we couldn’t be more excited to have been part of this journey with Hakkoda, but we’re even more excited to see what this team does next with a global platform behind them.

For them, it’s just the beginning.

Anaplan vs. OneStream: Duking It Out in CPM

March 14, 2025 by Kirsten Prost Leave a Comment

Coke vs. Pepsi. Nike vs. Adidas. Tesla vs. Edison. Packers vs. Bears. There’s nothing like a rivalry to focus attention and spark emotions.

Last year we wrote about the rivalry between Databricks and Snowflake in the data wars. You, dear readers, loved it, making it one of our top posts of the year. As an encore performance, we are tackling another tech battle brewing – the matchup between Anaplan and OneStream in corporate performance management (CPM).

Tercera has been tracking the Anaplan and OneStream ecosystems as part of Tercera 30 research for the last three years. Only one side has made the cut. Was it the feisty upstart (OneStream), or the somewhat more established player (Anaplan)? In this post, we take a closer look, deciphering key advantages and drawbacks of both solutions. We discuss the ecosystems for IT services firms considering partnering with one of these firms, and make a case for the one we’re confident will prevail.

What are Corporate Performance Management (CPM) Solutions?

First, some background. Corporate performance management (CPM) solutions (also known as enterprise performance management or EPM solutions) help organizations plan, budget, analyze and optimize their financial and operational performance. They sit on top of systems of record, such as ERPs, HRISs or CRMs, with data flowing in from those and other sources. Their functionality is twofold: consolidating and reporting historical financials, and supporting planning and forecasting.

The right CPM platform is like Mission Control for finance. It provides a single source of the truth so CFOs don’t lose sleep worrying about the integrity of their data. In its ideal state, a CPM should ensure a company won’t have conflicting numbers in different systems for the same data point—an all-too-frequent occurrence that drives CFOs bonkers, especially now that their responsibilities include other tasks such as allocating resources and optimizing supply chains. A holistic CPM that solves the full range of a company’s data needs can provide much needed organizational efficiencies and support better decision making.

Both Anaplan and OneStream play in this market segment, and are used by the Office of the CFO. However, they aren’t exactly the same.

OneStream vs. Anaplan: How are They Different?

The main differences between the two solutions is in the range of needs that they address, their ability to ensure a single source of the truth, and their scalability/extensibility.

Founded in 2012, OneStream supports the full spectrum of CFO data needs. It is a single, extensible platform that seamlessly integrates financial close, budgeting, forecasting, and scenario planning. As an enterprise platform, it has more power and can handle very large scale organizations.

OneStream excels at providing a true single source of the truth. It features a unified data model, where all departments work off the same numbers, preventing discrepancies. Its single-security model and reporting engine ensure real-time data consistency, and it has integrated financial data quality controls, where data is validated at ingestion to reduce errors and ensure accuracy.

OneStream is a versatile, powerful tool, a reality that carries its own burden. As one Tercera adviser put it, “OneStream’s biggest advantage is that it can do anything; Its biggest challenge is that it can do anything.” With this power comes responsibility. You have to architect the system correctly from the start, which is why guidance from an IT services partner is so important. The fact that OneStream is laser-focused on customer success helps.

In contrast, Anaplan, founded in 2006, today is more of a point solution. It is flexible, and fulfills a department’s forecasting and planning needs with relative ease. Smaller and lower-end commercial companies may opt for Anaplan because it can be deployed more quickly. However, it isn’t as effective at handling the broad range of a CFO’s requirements, such as reporting, consolidation and compliance. Customers will likely need to bring on and stitch together other tools to modernize the finance function, resulting in a spider web of applications rather than an integrated solution.

Below are two recent Gartner Magic Quadrants that highlight Anaplan as a leader in financial planning, but its absence in financial close and consolidation.

Anaplan’s decentralized model-based architecture also does not ensure a single source of the truth. Anaplan allows different departments to create independent models. While some customers may initially like this flexibility, it can lead to data fragmentation and inefficiencies. Teams can have their own assumptions, drivers, and calculations, causing inconsistencies. Users must check data accuracy and integrity using manual reviews, external databases or third-party validation tools. This decentralized approach, and the lack of built-in financial data quality controls, can also pose scaling challenges for large enterprises. More models intensify reconciliation demands, increasing the risk of data inconsistency.

Even though Anaplan is a forecasting tool, OneStream offers more robust forecasting for a couple of reasons. First, it is built around financial consolidation, so forecasts are based on accurate historical financials—that essential single source of the truth. Second, OneStream has a sophisticated logarithmic AI model, with external factors and economic indicators built in. Logarithmic AI is a powerful type of AI that improves forecast accuracy. Other platforms that incorporate generative AI are not as powerful. With logarithmic AI, you can input fewer data points and dirtier data and still have a good predictive model. OneStream’s AI can be intimidating because it’s so powerful, but we believe it’s the future.

Finally, there are key technical differentiators. OneStream’s founders had extensive experience at Oracle and elsewhere, and they created the platform to solve difficult problems that companies faced with earlier CPMs. For instance, OneStream features “extensible dimensionality,” which means that it can easily add new categories of data without breaking the database’s structure. It also offers “relational blend,” a data management approach enabling the integration of financial and operational data from relational databases. This allows users to bring together structured relational data (like transaction records, detailed operations metrics, or ERP system data) with financial planning and reporting in a unified platform. This lets OneStream handle a volume of data that is difficult for other solutions.

How are the Two Solutions Evolving?

Both platforms are innovating to broaden their markets. OneStream is investing in simplifying its platform to increase adoption among mid-market customers. In 2024, it launched CPM Express, a solution packaging “decades of experience and best-practices” and reducing implementation time to 6-8 weeks. To simplify customer onboarding and boost adoption, in early 2025 it rolled out solution-based pricing. Separately, to reinforce its position in highly regulated industries, it has achieved FedRAMP High authorization, a top-level federal security certification.

Meanwhile, Anaplan is moving upmarket, transforming what was traditionally a planning tool into a more unified platform, with native tools that can help address more complex use cases. It acquired Fluence Technologies in 2024 to add financial consolidation capabilities. It is focusing on real-time, user-friendly modeling, to support enterprise-wide decision-making, positioning itself as a flexible alternative to traditional CPM solutions.

Both platforms are also extending the machine learning (ML) capabilities that they’ve built over the last few years. OneStream has introduced Sensible ML, a machine-learning-driven solution designed to enhance financial planning, forecasting, and decision-making. Meanwhile, Anaplan is investing heavily in AI-driven scenario planning to match OneStream’s advancements in predictive modeling. While mainstream adoption of these AI capabilities may be some years away, it’s clear that embedding them in these platforms is becoming a higher priority.

How are the Two Ecosystems Oriented?

OneStream’s ecosystem is tiered based on experience, into Diamond, Gold, Platinum, and Silver tiers. OneStream also offers a GSI tier, and a Development designation for partners building solutions in the OneStream Solution Exchange. The firm is committed to 100% customer success, so its partner model is highly-controlled and high-touch. As of December 2024, OneStream had more than 300 partners, annual recurring revenue of $568 million, 35% year-over-year subscription growth, and 1,600 customers with a 98% retention rate. You can learn more about the OneStream partner program here.

Anaplan is stratified by industry (Consumer, Manufacturing, Financial & Business Services, Technology, and Media & Telecom) and function (Finance, Supply Chain, HR & Workforce, and Sales & Marketing). Anaplan has a more flexible, open partner ecosystem, and offers opportunities to generate resale revenue. Anaplan, which was taken private in 2022 by software investment firm Thoma Bravo, announced in February 2025 that in the previous two and a half years it had grown annual recurring revenue from approximately $600 million to over $1 billion, added nearly 300 new logo customers, and expanded the number of customers with annual subscriptions greater than $1 million to over 200. In 2022, nearly 200 partners were listed on the company’s website. However, a recent analysis shows closer to 75 pure consulting partners.

Who Will Win?

Both platforms have the potential to continue gaining market traction, but OneStream has the pole position, especially when it comes to its services partners.

As a newer and broader platform, OneStream has a bigger role to play across the office of the CFO, especially within large enterprises. It is far more customizable for the inevitable evolution of use cases. We believe the company’s expansion into function-specific planning, AI-driven forecasting, and its strong financial data control framework make it the preferred solution for companies needing a true single source of truth. Additionally, OneStream’s recent IPO means the company is well capitalized to invest in growing its share.

Anaplan, while strong in flexibility and multi-scenario planning, has more limited upside for partners in our opinion. The data fragmentation inherent in its model makes enterprise-wide financial accuracy challenging, which will limit the company’s ability to move up-market. We also believe that it’s easier to expand downmarket rather than upmarket, giving OneStream an edge. While Anaplan’s business performance has done well under Thoma Bravo’s guidance, the company has been flat to down in both employee growth and number of ecosystem partners.

As many CFOs look to consolidate their tech stack to streamline operations, reduce cost and improve data quality, we believe OneStream is positioned to win. It’s why in 2022 Tercera invested in Black Diamond Advisory, a Diamond partner for OneStream that was recently named Partner of the Year for OneStream. So, to be fair, we might be a little biased here.

Four Years Strong: Celebrating Tercera’s Anniversary and a Look Back

January 30, 2025 by Chris Barbin Leave a Comment

Today marks Tercera’s fourth anniversary.

The last four years have been quite a ride for this team of former operators and investors who started Tercera with a premise that services companies need love too.

In 2021, we saw a gap in the market for an investment firm that could provide not just capital, but the experienced counsel and quality connections that early and mid-size IT services firms could use to more gracefully navigate the plateaus of growth.

When we first got started, the environment looked a little different. The pandemic was still raging, with the vast majority of employees still working from home. Demand for SaaS platforms and digital transformation services were off the charts. Growth capital was cheap and talent was the biggest barrier to growth. DEI was front and center for employers, and ChatGPT was still 11 months away from being released as a “research preview”.

Fast forward to 2025. Employees are being pushed back in the office. Large digital transformation projects are fewer and harder won. Customer demand is now the biggest barrier for growth, and the days of services firms bleeding cash to win market share are gone. Profitability is the new black. As power shifts to new players, leaders are (unfortunately) dropping DEI like a hot potato. AI is pervasive, and ChatGPT is now used by more than 250 million people per week.

It’s pretty telling to look back on our 2022 predictions and compare those with our 2025 predictions.

Change has always been a constant in services and investing, but the pace of change in the last four years has been dizzying. Difficult at times, but also rewarding and exciting.

Milestones in the Journey

In the last four years…

The Tercera team has met nearly 700 firms, making connections and offering guidance while getting a bird’s eye view for how IT services are evolving in the age of AI.
We’ve invested in 7 companies that play in today’s hottest market segments – from data and AI, to identity and composable commerce, to digital, IT and finance transformation.
These firms consistently earn Partner of the Year accolades from software partners like Snowflake, Okta, Atlassian and OneStream, and have won numerous Best Places to Work awards.
We’ve completed 6 acquisitions across these investments, expanding their reach into new geographies, new sectors and building on the value they offer to customers.
We’ve curated a global network of 100+ services-centric advisors, and 30 formal Tercera Advisors who meet quarterly and provide regular counsel to Tercera and our portfolio.
We’ve held more than a dozen cross-portfolio best practice sharing sessions, including an in-person 2 day go-to-market event with sales and marketing leaders from across our portfolio, and our annual Tercera Leadership Retreat that happens each November.
We’re three years into the Tercera 30, which tracks the top software ecosystems for services partners, and has become a resource for hundreds of entrepreneurs and investors.

This year, we helped two of our early portfolio companies join forces to capitalize on the surging demand for data and AI expertise. Salesforce and financial services specialist, Zennify, acquired Terazo, a data and digital engineering specialist. Together, they are creating the #1 data and customer experience consultancy for regulated industries.

Lessons Learned Along the Way

With a core value to Pursue Growth (both personally and professionally), we’d be remiss to not highlight a few lessons learned from our own experiences and the hundreds of firms we’ve met along the way.

Choose your partners wisely. Every relationship and business will have its ups and down. Work with people and partners who you respect, who respect you, and who make you better. Work with advisors who you want alongside you to celebrate the good times, but more importantly to navigate the hard times. Because there will inevitably be hard times, and that’s where great companies and partnerships are built.

Investing should be a team sport. Tercera’s biggest superpower is the unique skillsets and perspectives we bring to the table from across our team and our wider set of Advisors. It’s in the boards we help to assemble, the introductions and advice from our broader network, and the connections we can facilitate across our portfolio. No one person has the right answer 100% of the time.

The power of focus, the value of options. Companies that try to be all things to all people don’t succeed in this environment, which is why we’ve always gravitated to pure play services partners. However, shifting market dynamics, evolving customer needs and new tech architectures have shown us the power of having options. You still need to pick a horse (or two) and have a clear opinion, but the risks of being single threaded are real.

The Road Ahead

Looking forward, we are excited to build on these learnings and milestones – expanding our network of advisors, deepening our insights into emerging ecosystems and technologies, and creating even more value for existing and new investments.

If you’re interested in following our journey and what we learn along the way, please subscribe to our monthly newsletter or follow us on LinkedIn.

If you’re interested in potentially partnering with us for an investment, please shoot us a note here!