Microsoft Office Accounting Gains Momentum

I spoke today to Gareth Arnold – the UK Product Manager of Microsoft’s new entry level accounting system. He was very bullish. Since launching the product late last year they have had thousands of downloads and a real interest in their new application.

Microsoft is putting considerable effort into recruiting Accountants to Microsoft’s Professional Accountants Network. They offer free software, training and support to members of this group. In the UK they have already exceeded their recruitment targets that they hoped to reach by June this year and if the current rate of sign up continues it will not be long before they overtake Sage with numbers of accountants in their program.

With the entry level product, Accounting Express, being supplied free of charge they have an attractive offering. In terms of the potential impact on Sage Gareth says that the product is focused at organisations that are not big enough to have an employed accountant/accounting professional on board – typically with up to 25 staff. This is certainly close to the Sage 50 product range (previously called Sage Line 50) and is likely to affect future sales of this product.

At the moment Accounting Express/Professional has been focused on the UK and US markets. Compared to Intuit with QuickBooks Microsoft has some work to do to develop and supply a global product. In the long term there is the opportunity for vendors to offer one product globally – and enjoy the economies of scale that this brings. QuickBooks has made good progress in this space and Microsoft will need to thing hard about bringing out a global product if they want to really succeed.

Interestingly Microsoft has decided not to offer their product as SAAS (Software as a Service) i.e. a hosted web based solution. Some would argue that part of the reason for this is their determination to encourage users to keep their PCs/Desktops – and continue to buy software for each machine from Microsoft. However, the counter view is that web based solutions are still not being adopted that widely and accountants prefer to have their data loaded on a machine in their office – rather than an anonymous server with the obvious security concerns. I expect their decision to offer their software to run on a PC will have little impact on their sales in the next few years.