While I was away, Nigel Harris did a great job running through the various aspects of Microsoft Office Accounting Professional 2008 (MOAP). Rather than reiterate what he says I’m looking at this from a market perspective.
Microsoft has been quietly eating away at the upper end of the SME market with its rebranded Dynamics suite, pulling business from a number of vendors but principally from Sage and Pegasus customers who are looking for an applications refresh. It hopes to do something similar at the next slice down the market.
Office integration is a serious tease that in part mirrors what Microsoft has done with SAP at the top end of the market with Duet. With 90%+ market share in office productivity software, it was always no brainer to provide the accounting piece of the puzzle. Pricing at free or £149 is another smart move. In reality, Microsoft could give the app away because even if it snags 10 million customers globally, it would make little discernible impact on earnings.
Integration with eBay and PayPal are also smart moves. However, customers should be aware they’ll take a significant hit on charges. Also, if they’re operating in multiple currencies with PayPal then expect to get little better than tourist currency conversion rates. When I last checked, PayPal was converting USD to Euros at 1.503 where Yahoo shows money market rates of 1.466.
But is the offering enough to woo professionals? Possibly. Nigel says that:
Sage, QuickBooks, MYOB, etc have been pushing out entry-level and micro-business products over the last couple of years, but it looks like time’s up – Office Accounting 2008 Express is totally FREE and does a far better job than many of the current small business accounting packages, so expect some realignment in the UK market. In the meantime, download a copy of the new software and get ready for a deluge of requests for help from small businesses. Look out for the launch of the Microsoft Professional Accounting Network
I wouldn’t be so quick off the mark with pre-announcing the demise of any of the incumbent players or expecting that customers will suddenly switch. It doesn’t work like that in the accounting market.
The Sage’s of this world already know the key to getting at the end user is through the professional. Clients have proven remarkably resilient at sticking with one or more of the low end packages. There’s also the assumption that professionals will know how to run with the package and that their clients will be ready to adopt. Nigel doesn’t offer any reason other than the ‘free’ Express offer. Adding a tad more confusion, in an endnote, Nigel says:
Microsoft states that its target market is small and micro businesses which use manual or speadsheet-based accounting records.
If that’s true then I sincerely hope Microsoft has a strong training program in place. At a first look on the accounting front MOAP is yet another accounting product that end users will need to understand. That means the user will need to know a lot more about accounting than the target market suggests. Throwing a sexy dashboard in front of an SME will barely register.
Let’s be clear what this is about – tethering clients to the Microsoft desktop and operating system. Nothing less. It’s a good way to go about it but has no guarantee of success. Microsoft will have to do a lot of convincing in the professional market. From what I’ve seen to date, I’m less than wowed and that is exactly what they will have to do for me to sit up and take notice. Wow me into believing the software is significantly superior to Line 50. Sex and sizzle alone will not be enough.
PS/Bonus link – here’s what Mike Prosceno has to say about community.
