At this point, if I bumped into Steve Ballmer and the Microsoft Office Accounting product management team on a country road, I’d feel a bit like the yokel who advises, “If that’s where you’re going, you don’t want to be starting from here.”
For a company generally held to be a paragon of ruthless technology marketing expertise, Microsoft’s attempts to expand into small business accounting software have been inept, bordering on catastrophic. When Microsoft Office Accounting Professional launched, belatedly, in the UK in November 2007 I remember quipping to a senior product marketing executive how well the OAP acronym suited the program. It was a cheap shot at the time, but grew into a living nightmare for Microsoft.
As up-to-date and technically sophisticated as Office Accounting Professional was, Microsoft’s product generals were fighting the wrong war. Kashflow founder Duane Jackson confirmed this week that these days any small business looking for accounting software starts on the internet. For all the thousands of copies of the free Office Accounting Express edition that were downloaded, it was almost invisible in our 2008 and 2009 Software Satisfaction Awards surveys while online providers such as Kashflow, Xero, e-conomic, Liberty, Pearl, FreeAgent and Arithmo racked up hundreds of new users between them.
Microsoft made the mistake of assigning its accounting program to the Office product group. Accounting is not a general office productivity task, it is a complicated professional activity that is driven primarily by financial reporting and regulatory parameters. It should be managed by people with accounting expertise and frontline experience with business applications and users. Microsoft Dynamics is such a team and would have benefited greatly from a low end program that would have provided an upgrade path to its more sophisticated accounting and ERP tools.
Microsoft is going through a tough time and everyone recognises that corporate strategies do change. But the termination of the ill fated Office Accounting project, like the PerformancePoint Server BI strategy before it, has only managed to further harm the Microsoft business software brand.
To claim, as Microsoft did, that Excel-based templates could fill the sub-Dynamics gap in its accounting software portfolio displays such a limited understanding of accounting that perhaps it’s best the company does withdraw from this market. True, millions of businesses do run their accounts in Excel, but they are using an inefficient tool for the task that wastes their time and exposes them to a much higher risk of committing material financial errors.
Kashflow’s Duane Jackson speculates that Microsoft might be back in a few years’ time with a software as a service accounting application. I don’t think he needs to worry. Microsoft has so comprehensively bungled Office Accounting that its reputation among advisers is likely to suffer for years. And if you don’t have the accountants on your side, you don’t get businesses using your software. Ask Sage, or all of the SaaS vendors that are courting the profession so assiduously.
More significant for Microsoft is the possible fallout the episode could have on Dynamics. In the ERP world, Dynamics is a billion-dollar player up against the likes of Oracle and SAP, but it receives little attention at Microsoft HQ in Redmond. Having failed to involve Dynamics properly in the development and marketing of Office Accounting, Microsoft has further dented the credibility of its business applications wing by deciding to put the program on ice.
I’m sure I’m not the only observer wondering that if Microsoft can leave hundreds of thousands of Office Accounting users in the lurch, what’s to stop it doing the same to Dynamics customers?
Microsoft Office Accounting - the full story