Microsoft pulls the plug on accounting software

The world’s biggest technology company bowing out of the small business accounting software market has come as a shock, but what is more worrying is the reduction in choice for the profession.

Microsoft is dropping Microsoft Office Accounting and its associated Microsoft Professional Accountants Network ­ leaving experts disappointed that such a big player is not competing in the marketplace.

“It is very disappointing to the accountancy profession, as having more choice is always a good thing,” said Mark Holland, managing partner for Baker Tilly’s accounting IT product Revas.

Practices were not expecting Microsoft to leave the market as its product and network had only been available for two years in the UK.

“Users may have assumed when taking up Microsoft [Office Accounting] that it was a big name with massive resources ­ which could have been a reason the practice chose it,” added Holland.

Critics were not impressed by the timing of the announcement. Over the next few months, accountants will be readying themselves for a multitude of issues to deal with alongside their clients, including the VAT rate reverting to 17.5%, and the self assessment tax online filing deadline.

“From a profession’s point of view this announcement will mean there is further strain. In addition to VAT changes and the downturn, subscribers [could] have to change their software,” said Holland.

Jill Telfer, head of customer service in the accountants division at Sage, said: “From daily reporting to online filing and imminent VAT changes in just eight weeks time, accountants have enough to be thinking about already and shouldn’t have to be distracted by their software or their software providers changing hands.”

Microsoft declined to comment when asked whether it had considered the software launch as a failure. Justin Hutchinson, director of consumer products at Microsoft, said: “We looked at the product line, investors, market conditions and
our commitment to shareholders before Microsoft made the decision to cease distribution.”

John Oates, Baker Tilly head of IT advisory services, believes Microsoft could have underestimated the difficulty breaking into such a competitive market.

“It’s a hard market to get into as Sage dominates it, but they have to take the long-term approach which I don’t think they did,” he said.

Mamut, the Norwegian listed software vendors, will take responsibility for supporting Microsoft customers. Eilert Hanoa, CEO of Mamut, said that with an estimated 100,000 free users of MOA, and 10,000 paying customers, if they continued using the product it could double the company’s customer base.

“One way or another the Mamut universe has doubled in the UK,” said Hanoa.
He is confident the company will meet the increased demand as it had “more capacity than we needed” through its acquisition of MYOB last year.

Microsoft declined to comment on whether they would re-visit accountancy software in the future. Hutchinson said: “Excel is the most widely used finance tool in the world and we will continue to invest in it.”

Mamut is offering Microsoft customers a free upgrade to Mamut Business Software until the end of the year.