11 Apr 2008
The press have been busy covering the latest round of acquisitions. I’d like to have a look at a couple of these
Sage
Firstly, Sage announced at the end of last month that they were acquiring UK Construction Software specialist Tekton for £21m. The Sage board continues to look for growth via acquisition and this news adds to a long string of purchases over recent years.
On interesting aspect of this purchase is that Tekton’s software – evision, is based on one of Microsoft’s own accounting products – Dynamics NAV.
Sage and Microsoft are often regarded as direct competitors in the Accounting Software market so the fact that Sage has purchased Tekton raises some interesting questions.
Will Sage re-write the product to work with their own software? If not how does Microsoft feel about this relationship?
Sage has made its money by acquiring dozens of different products and generating good profits from the user bases – so I guess if the finances stack up for this deal the explanation for the purchase could be very simple.
Access
Access Accounting announced last week their acquisition of Armstrong Consultants – for an undisclosed sum. Armstrong Consultants has a focus on the professional services and service management markets and is a reseller of Access Accounts. Other Access resellers may not be too pleased with this purchase. Software vendors owning resellers as well as supporting third party partners creates a conflict of interest, for example when allocating sales leads and supporting new business pitches.
More interesting perhaps Access has announced plans to grow their business to £100m t/o by 2017. Formed in 1991 their turnover has so far risen to c. £14m in 18 years so they have some way to achieve this growth. However the expansion plans look like they are off the back of acquisitions of new products, so it will be interesting to see how they fare – and whether they will come up against Sage with future deals
One thing that saddens me across the SME Accounting Software space is how established software vendors have not yet managed to deliver a ‘killer product’ that gains really significant global market share, Intuit being the possible exception. Satisfaction levels among the users of accounting software products still leaves a lot to be desired. This is in part down to serious functional weaknesses in many of the products on sale. Accountants using these systems want reliable, reasonably priced and functional products that are well supported. They also want software authors to invest enough in R&D to keep the application up to date with leading technologies.
In the case of Sage their revenue/profit growth has come primarily from acquisition – not organic growth of their existing products. In the case of Access Accounts their revenue comes mainly from the UK. For whatever reasons their product has not gained a dominant position in the market and they have not furthered their growth significantly in overseas countries.
So will we ever get to the point that the market consolidates into a handful of global products? One really starts to wonders whether the only chance of this happening is with a new player in the market. Google? Salesforce? Who knows?
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Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
Having a real and true view of your organisation’s current financial position, and having the right systems and processes in place, will ensure that you can make strong choices and are ready to capitalise on opportunities
Visitor comments Add your comment
I have found that a great way to compare accounting software, and evaluate it systematically, has been to use the software selection kits up at:
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They evaluate many of the packages that I am interested in, and even when they don't, the way they rate software, and the criteria by which they rate different packages, helps me compare aspects of different vendor software more efficiently.
Posted by: A. Friedman, 11 Apr 2008 | 16:45
I have found that a great way to compare accounting software, and evaluate it systematically, has been to use the software selection kits up at:
http://www.ctsguides.com
They evaluate many of the packages that I am interested in, and even when they don't, the way they rate software, and the criteria by which they rate different packages, helps me compare aspects of different vendor software more efficiently.
Posted by: A. Friedman, 11 Apr 2008 | 16:46
Shame that the info on the site appears to focus on US products only - or have I missed something? e.g. Access and the UK Sage products are not reviewed
Posted by: John Tate, 11 Apr 2008 | 19:02
What surprises me is the almost complete absence, in this space, of any credible free and open-source alternatives.
Free and open-source software is very successful in many markets - it dominates in web-servers - and there are credible alternatives in most sectors. Yet in accounting,the first business process to be mechanised, there seem to be almost none.
Free and open-source demands a different business model, but businesses have been successful using it - so perhaps there is an opportunity to use this approach to galvanise change in the market.
Posted by: Edward Barrow, 22 Aug 2008 | 10:10
Now day business software is widely used by the companies to manage their company expense and resources in a smart manner. Account software manufactures earning a huge revnue.
Posted by: Accounting services in DC, 19 Mar 2009 | 12:11
Hi,
I agree with Edward that Open Source alternatives are rare or almost missing. But the major reason is the confined industry of accounting which incurs high cost for software development and also the commercially use limitation implied by Open Source licenses. However, you can have the following accounting software which are superb!
1. GnuCash
2. TurboCash
3. PostBook
Hope it helps.
- J.
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