Accounting Software – where is it going?

My first blog for Accountancy Age. I am tasked with writing about technology. Technology and Accountants – where better to start than accounting software.

Is this a yawn subject? Businesses in general change their systems infrequently so tend not to be on the constant lookout for a new system. However user satisfaction levels are not that great so many like to keep an eye on what is going on. Also the market is very fragmented. There are still hundreds of completely different products in use in the UK – and thousands plus worldwide. This is perhaps one of the last areas of legacy (or old) software that could consolidate? The market is worth billions to the software industry and someone stands to make a slow killing if they can mop up the market over the coming years. Sage, the SME market leader in the UK, has achieved its growth by acquiring companies and now has dozens of different products on sale throughout the world. They enjoy little organic growth from their existing products. Many thought that Microsoft would achieve this – as it did with spreadsheets and word processing. However its entry into the market has not achieved its initial growth plans and is still way off being the leading player. SAP has a very strong footing at the high end but still faces fierce competition from the likes of Oracle. Implementation of their software has usually been painful to say the least and people are wary of changing vendors.

So will the market consolidate? Maybe a single entry level system for the smaller business, a second for the mid market and a third at the high end? Or will someone bring out a one size fits all solution?

What will be the drivers for change? Will an existing vendor do something different and gain market domination – or will it be a new vendor? Or will we have the same fragmented market in 20 years? I’ll be talking to the vendors/users of systems in the coming weeks and let you have my views.

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