A press release passed over my desk recently in which claims were made that nearly all accountancy firms would close in the next year if they did not take better precautions against internet viruses and back up information on a daily basis.

The person mentioned in the release declared more than 90% of accountancy firms would close in the next year, if more due diligence in risk assessment of their systems were not taken.

In particular the use of Facebook and LinkedIn opened up firms systems to viruses and bugs, which could have crippling results.

Not one to point the finger or snigger at outrageous beliefs, the wild accusations raises a valid point.

Although social networking sites are a good source of client interaction, it is not as rose tinted as some realise.

Backing up all software and information as well as keeping up to date on "bugs" and anti-virus programmes should be an essential part of an accountancy firm's day to day routine.

As internet or cloud computing becomes more common place, and remote working mandatory, the crux of the original article remains valid.

Firms which sneer at the closure of its business due to viruses may not realise aside from people, its only asset is the information - which should be guarded at all costs if it is to remain in business in the 21st century.

Claims that more than 90% of firms could go into administration in the next year is a bit steep for my liking, however firms should take this warning seriously unless they don't mind becoming a statistic.

Users of SAP software may be intrigued to hear that its chief executive Léo Apotheker was forced to "unexpectedly resign" this week just seven months into the job.

It seems the German company declined to renew Apotheker's contact and will revert back to having two joint CEOs; current board members Bill McDermott, head of field organisation, and Jim Hagemann Snabe, head of product development.

Accountants which use SAP may feel vindicated in this move as reports have already begun to circulate that the change are a result of the company trying to increase support services by 22% last year.

However following a backlash from user groups the company backtracked and instead priced its Standard Support package at 18% of software licences.

One of the biggest selling factors in a predominately on-premise or traditional software company is its brand strength.

However the latest news has "increased uncertainty" on the company's future according to some analysts.

As the software industry this year is to go through various changes, with the growing demand of online and remote working capabilities; the introduction of inline eXtensible Business Reporting Language for tax filing; and the introduction of IFRS; it seems odd SAP would pick now to let its CEO go, without giving him the chance to sink his teeth into the role and face the changes head on.

It's been a busy year for the IT industry, but next year could see the technology sector completely changed.

Cloud computing hit headlines in 2009, but iXBRL will take priority next year.

HMRC announced from 1 April 2011 all tax returns and supporting financial statements must be compiled using iXBRL.

What is XBRL? It's a tagging system which allows investors to compare financial information. Users can "tag" or "barcode" information which can be used for comparisons by investors and analysts.

These tags however, can't be read by most computers. iXBRL can.

Although this sounds like a great idea in theory it can be costly. So far it looks as though software companies are bearing the brunt of this leap forward.

IT companies I have spoken to have pooled their resources into research and development as well as extra support services.

All have denied an increase in support charges in the future, but it will be interesting to see where the money comes from to push this technology forward.

The Accountancy Age awards have come and gone and the technology winners were left partying into the night.

Interestingly, although online, cloud computing and Software as a Service (SaaS)  -has continued to hit headlines and make waves in the technology industry - the award winners are not renowned for their online capabilities. All of the software winners were in-house or on-premise providers.

In my discussions with various accountants, finance directors and software vendors, remote working is one of the biggest selling points for adopting SaaS or cloud computing technology.

Gartner predicted that worldwide SaaS revenue would grow 17.7% by the end of the year, an increase from $6.4bn (£4.08bn) at the end of 2008 to $7.5bn.

However speaking to one of the technology judges at the event, I found they truly believed the client and colleague interaction was vital in running and working in a successful business. Something this judge felt was lost when too much remote working is implemented.

The awards and speaking to technology judges made me realise that online and remote working is most likely still a long way from mass adoption. In this instance I hope that I am proved wrong.

The announcement Microsoft dropped its Office Accounting product came as a shock, mainly because they barely gave it a chance to succeed or fail, before they canned it.

The short shelf life given to the product was astonishing.

The product was stopped just two years after its UK release date and one year after its general retail launch.

This means Microsoft must have started discussions to withdraw the product either before or just after the general retail release.

They would have had several internal discussions before having several more with Mamut - who took on support of their abandoned customers. All of which would have taken the best part of a year.

Customers would not have been expecting, having invested in such a big brand, to see it disappear after just two years. This is made worse by the Microsoft claim their products have a lifecycle of ten years, according to the CEO of Mamut who will now be supporting the product. 

I wanted to know why Microsoft had taken such early action but they declined to comment and also declined to comment as to whether they thought Microsoft Office Accounting was a failure.

We can only imagine the size of the hit Microsoft was taking on the product for it to drop MOA so quickly.

It's no longer a question of whether revenue streams have declined but rather by how much.

And the latest technology company results offer some tough reading.

Despite their spin, the bottom line is they're making less money.

Of course this is no surprise given this is the situation for pretty much most companies in the world at the moment.

But what disheartens me for this sector is the prospect of innovation being suffocated.

My greatest fear is that R&D becomes something big IT companies simply acquire from the smaller guy.

If more and more IT companies are consolidated, which analysts expect to continue, then research and development could take a nose-dive.

It is generally more cost effective to buy out a company that has developed software than to develop it yourself. But what happens to the user relationship with the IT company?

You then have the old problem of a technology company owning different sets of kit that don't necessarily fit together. Ironically spending years forcing them together is probably more expensive than coming up with new IT from scratch.

Software companies need to make sure that development doesn't fall off the radar in the cost saving and streamlining drive, and that they invest on what users want - not what they can get by with.

Online - it's the way of the future. I hear that so much in my technology travels, but it has never been more evident to me than at the recent Softworld exhibition in London.

The Olympia had an online accounting zone. According to one spy at the event he received numerous complaints from the more traditional "on-premise" vendors, as they are now being labelled, that there wasn't much traffic from accountants or buyers.

This is in stark contrast to the many onlookers who swarmed to the online zone, not least because of its bright lights and enticing shiny red boards.

The more popular discussion groups centred on cloud computing, with one in particular chaired by Richard Anning, head of the IT Faculty. He had a panel including members from NetSuite, salesforce.com, FinancialForce.com and Mamut.

It was standing room only, with people straining to hear how this technology was growing and able to offer all the things that "on-premise" no longer provides.

It made me wonder how long it would be before "on-premise" software becomes legacy.

But the interesting aspect to come out of that roundtable was the honesty that not all cloud providers are created equally, according to Mamut, while FinancialForce.com stresses this is a new technology and may still has challenges to overcome.

It's a refreshing change to hear the fears of the software industry as it ventures into new territory.

This is my first blog and comments are always welcomed. The previous blogs were written by John Tate co-founder of Tate Technology the IT consultancy

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?