Last evening Wayne Schultz contacted me to say that MIS Group, a US Sage Dealer of the Year in 2007 and 2008 has suddenly shut shop. According to Wayne:
Based on discussions with several different people it seems there had been ongoing issues with financing. This much was also confirmed on the company’s own web site when they closed July 6, 2009. At the recent IT Alliance conference in Atlanta the group was notably absent and rumors where openly swirling that there may be some type of cost cutbacks or financial issues.
Some estimates place MIS Group’s share of the entire Timberline installed base at 40% (a number we’d happily update is someone had better information). If this number is accurate, then the firm had a large exposure to the declining construction market in the United States. To a large part it seems the demise of MIS Group was due in large part to the economy.
I think there is another issue at stake. When Sage did its last US reseller show I was hearing grumblings about it having nothing much of substance to show as new offerings. New ’stuff’ is the lifeblood for resellers wanting to call up customers. If Sage couldn’t persuade them they are providing new product then it becomes very difficult for resellers to maintain sales momentum. That might not be a big deal in normal times but in a tough economic climate, that’s like trying to go to market with one hand tied behind your back.
In the US, it is possible to re-organize under bankruptcy rules but this has not happened in this case. Wayne speculates about why this has happened and what might happen next but I think he gets it right when he says:
Individual consultants (the real assets of any consulting firm) could take their existing “book of business” with them to a new consulting firm and start anew. An option that might not have existed for a reseller emerging from bankruptcy with a potentially bruised relationship with key suppliers.
That also begs the question whether there is enough business in the current market to make a transition to a new entity a viable option, especially as MIS seemed to have a lot of eggs in one markets.
In the meantime, Sage is picking up the slack, offering customers help. Even so, this is an indication of market fragility and for all Sage’s recent words of comfort to the financial analyst community, I wouldn’t be surprised if the telephone lines into head office have been buzzing. On top of that, as Wayne shows, Twitter is being deployed as an alternative way of reaching out. Novel.
The full announcement from MIS is on Scribd.
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