It’s a huge market, and tied up by Sage. Accounting software for SMEs is big business.

Sage this week showed just how good business it is, saying that SMEs, even in the downturn, are still spending on their software.

The company clocked a pre-tax profit of £122.6m for the period to 31 March, up from £108.6m on the previous year.

UK revenues grew 12% from £107.5m to £120.2m in comparison to the same six months last year.
Paul Harrison, group finance director for Sage, said: ‘We have a 5.5 million [global] SME customer base and even though we are facing a tough economic market, SMEs still need support’. But Sage also faces new competition in the market.

CODA, better known for providing software to bigger businesses, has launched CODA2go, a new online platform for the smaller company market.

CODA2go is an on-demand application that is available online and via the force.com platform.

CEO of CODA and member of the management board at parent company Aggresso, Jeremy Roche, said: ‘For small companies Sage was the only option really. Now there are more options and a sophisticated application.’

The software allows users to pay a monthly charge with no contracts, however, customers will be required to give at least one month’s notice.

‘The application is matched to the cashflow of the system, you can always cut back on users if you hit hard times,’ said Roche.

The system is customisable and needs a browser and multi-tenancy technology, which allows multiple users on one server. ‘For us we will be able to get to a wider audience. Our market is at the higher end and now we can offer a complete accounting solution to organisations on a smaller scale,’ said Roche.

So what does Sage make of its new competitor? ‘They have no brand in the SME market,’ Sage’s Harrison said.

‘We have a good relationship with business. If you get the support right the customers will renew their contracts.’