Norwegian business software house Mamut has been experiencing a customer backlash as a result of its deal to acquire MYOB's UK bookkeeping user base in 2008. John Stokdyk investigates.

When MYOB took the strategic decision to withdraw from the UK market in May 2008, it sold its tax and practice business to CCH, but was left with a significant group of UK customers who used its MYOB Accounting and BusinessBasics bookkeeping applications.

Ambitious Norwegian developer Mamut was keen to expand into the UK and stepped into to buy MYOB's UK accounting software business for £1.7m. While greatly increasing its market presence with the country's third biggest accounting application, Mamut was also taking on a significant customer service challenge. MYOB Accounting scored consistently well in Software Satisfaction Awards [1], narrowly missing the top prize for small business accounting software for the past two years running.

However, as part of the deal MYOB made it clear that it would no longer support the package in the UK beyond 2008-09. Mamut CEO Eilert Hanoa explained at the time that when the plug was pulled the company would offer free migration to the equivalent Mamut products.

As can be expected, the practical implementation of this policy has made life difficult for MYOB users and Mamut. In February, Mamut circulated a letter to MYOB users explaining that MYOB would no longer supply it with versions of the accounting software for the UK market, nor support or develop it on new operating systems.

"Mamut fully understands that MYOB's decision to stop supporting and developing their products and services may have a serious impact on your business," the Norwegian developer company explained, adding that it had developed an upgrade kit to ensure a smooth tranisition to Mamut's products. But rather than being free, the offer propsed was based on a "discounted" £29 price tag to the software licence, plus £96 for an obligatory annual service agreement.

Mac-based MYOB users are in an even worse situation, as there is currently no upgrade package in place to cater for their systems. "If you are a Mac user, please continue to use MYOB as usual - will be contacted about upgrade," Mamut advised them in February.

Several users raised the issue on UK Business Forums [2]. HLS Business Solutions, which provides a virtual assistant service that includes bookkeeping, decided to look elsewhere for a new system.

The issue has simmered on since then and resurfaced in April when KateCB [3] voiced similar frustrations with the deal on offer and documented her decision to switch to the online KashFlow system. Accountant and tax consultants Farrant Frost also reported migrating from MYOB-Mamut to Solar Accounts.

The impact of the product switch has been picked up by rival developers. Tom McClelland of 12pay.co.uk reported that his company had picked up users disgruntled by what had happened to their MYOB payroll application (formerly Dosh). While Pearl Software had developed a migration kit for its online application, KashFlow's Duane Jackson typically upped the stakes by promising free software for a year to users who sent in MYOB (or any other accounting application disks) to its accounting software bonfire [4] promotion.

On behalf of Mamut, Brian Richter posted that MYOB had made the decision to quit the UK market rather than Mamut.

"There's a perception that Mamut created the problem," Richter told AccountingWEB.co.uk. "Mamut does not own the intellectual property. There is an agreement in place until activation stops working in 2011. The bottom line is they would have to migrate anyway. We're trying to smooth the process financially, technically and with training. Human nature is to blame us for that situation."

Initially, Mamut has been focusing its attention on MYOB payroll software users to ensure they were equipped to deal with the new tax year from 5 April. Now the company is focusing its attention on the accounting software product.

"We feel we're on track with what we have to offer," said Richter. Mamut's obligatory annual support fee upset some customers because MYOB did not have the same arrangement, he explained. Those MYOB customers who did have a support contract in place are entitled to free upgrades to Mamut, while those without will incur some licence charges in addition to the annual fee.

"We understand that and it's their right to seek another provider. For the rest, we want them to feel we're not strong-arming them," said Richter.

"Our mindset is to communicate and put our position forward. Not all people use software in the same way - so the challenge a customer faces is a best guess. We've got quite a compatible range, so I ask people to talk to the folks here and look at best fit.

"We believe that the Mamut products offer a very viable alternative to MYOB and there are many customers who have successfully and happily migrated... Naturally, many of our competitors see this as an opportunity to convert the MYOB customers to their own products, as they are very entitled to do."