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Practice software: Best of breed players fight back

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25th Dec 2005
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Over the past few months, much of the activity in the practice software market has been focused on development projects and software alliances designed to create integrated suites of tax, accounts production and practice management software.

IT Survey sponsored by CODALast year's IT Zone survey suggested that the two biggest suppliers, Iris and Sage, could build on their existing user bases and product lines to consolidate their hold. The spring 2003 survey, sponsored by CODA, suggests that our predictions were slightly off-beam, as smaller "best of breed" suppliers appear to have prospered during the last 12 months.

Personal tax software market shares

Package % of users Sat. score
Digita 17% 4.4
Iris 10% 4.7
PTP 9% 4.5
Sage Personal Tax 7% 3.3
Sol 6 PerTAX 7% 4.4
Drummohr 7% 4.7
CCH Taxpoint 5% 3.7

Digita Taxability Pro showed the biggest surge among our personal tax software users, boosting its share from 9% to 17%. PTP (9%) and Drummohr (7%) gained two percentage points each. Among the larger developers, Iris, Sage and CCH Taxpoint fell back slightly, while Solution6's PerTax increased two points to 7%.

Compared to other applications used by all accountants, tax software developers achieved remarkably high product satisfaction scores - particularly niche specialists like Drmmohr and PTP. Iris increased its high satisfaction levels in this arena. But Sage, still in the process of migrating users from a variety of applications, came in with a less than spectacular 3.3 product satisfaction score.

Practitioners - who are more likely to use tax software - made up 52% of our sample, so our findings do not provide definitive indications of overall market share - but they do suggest which vendors have made an impact among AccountingWEB members.

The tax software market is intensely competitive and any indication of market momentum or user satisfaction is seized on by the vendors to demonstrate their superiority. Barring further acquisitions in the tax software market, the status quo is unlikely to change significantly, as our results show that the sales boom inspired by self assessment has died down. Compared to last year's sample, the percentage of respondents planning to invest in tax software halved from 49% to 23% of the total survey sample.

Accounts production software

Package % of users Sat. score
DIY Excel 21% 3.7
Iris 15% 4.5
Sage AP Advanced 13% 3.2
Sage AP 12% 3.6
VT Final Accounts 10% 4.3
Viztopia 8% 3.5
CaseWare 5% 3.9

Accounts production is another reasonably mature practice application - although 21% of our respondents said they used Excel to prepare their accounts (that figure includes business respondents - the percentage of accountants who confess to this practice is closer to 7%, compared to 11% last year).

Confirming the well established nature of products in the market, there were few changes in the league table, although Solution 6's Viztopia increased its presence significantly.

Iris continues to supply the single most popular commercial solution with 15%, but Sage Accounts Production Advanced and Sage Accounts Production give the supplier a combined 24% share of this sector of the market.

As with last year, Iris enjoys the highest satisfaction score among its users, with an honourable mention for VT Accounts for its 4.3 score.

Practice management software

Package % of users Sat. score
DIY Excel 22% 3.5
Sage Time & Fees 12% 3.4
Iris 11% 4.1
Star 6% 3.8
CCH PROcost 5% 4.1
APS Advance 4% 4.1
ACT! 3% 3.5
Viztopia 2% 3.3
Practice Engine 2% 3.8

The hold of Microsoft Office is still strong on practitioners, with more than a quarter using either a DIY solution or Microsoft Outlook. But the proportion has dropped by roughly 10% over the past 12 months, indicating that there is some life in this sector for commercial suppliers.

Thanks to its ownership of the ACT! contact management system, Sage has overtaken Iris as a supplier of practice management tools. But even without this help, Sage Time & Fees jumped above Iris in our sales chart during the year. However, the product that made the most inroads during was PROcost, which was acquired by international publishing group CCH along with the rest of PROacc's practice software portfolio.

Among the larger firms, there is stiff competition between APS and Star. APS's clients are more bunched in the £1m-£10m annual fee bracket, and award it a slightly higher satisfaction score, while Star has more users, including several sub-£500,000 turnover firms. Once again specialist suppliers of practice management software tended to have mor satisfied clients than the full-range suppliers, although Iris and CCH PROcost both disproved this rule.

Encouraging trends - even for Sage

This report is a quick summary of the main practice software findings, which will be detailed in our final spring 2003 IT Zone survey report. Two linked features emerged in the practice market during the year. First, there were signs that product satisfaction does influence software sales, as evidenced by the success of niche players like Drummohr, PTP, VT, Star and APS.

However, the state of play among the big players deserves a look. Iris has once again achieved 4+ product satisfaction scores across all three categories, an achievement which none of its rivals can touch.

Yet Sage, beset by product rationalisation and customer service problems that are reflected in our respondents' scores, managed to improve its position relative to Iris, achieving its goal of becoming the biggest supplier in the practice software market.

As we have seen so often in this industry, neat technology plays second fiddle to marketing factors when it comes to achieving mass-market success.

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Replies (5)

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By rchild
04th Apr 2003 17:00

Sage Satisfaction?
Based on my experiences, these words are mutually exclusive.

I wish that I had known about this survey; my views would have more than compensated for any favourable comments.

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
04th Apr 2003 18:29

Satisfaction scores
Thanks for the comments so far everyone, and yes we have heard all the reports about Sage. Once the budget is over, this is a topic I will be raising with the company. The scores from our survey do tell a story - but the final point holds: Sage plays by its own rules in this market and has established a dominant position in spite of having products that not as well liked as rivals'. That's marketing power and it works. Cf Microsoft and Apple, perhaps.

A word to Chris - yes, we are open to the Radio 4 Personality of the Year syndrome and have seen several attempts to bolster the votes in our various surveys. We do check the returns carefully for obvious signs of manipulation. Some, but not many, suspicious participants have been removed. And as the results suggest, the replies we did analyse do not show any obvious bias towards Sage.

This possibility of manipulation is why we always emphasise that our survey presents a snapshot of our user community at a certain point of time. When we return next time and collect a new set of data, any obvious spikes will become apparent in the long term trend lines.

Ultimately the best defence if all of the vendors encourage their users (as opposed to employees) to take part. The bigger the sample, the less effect vote-padders can have.

We'll cover all of these issues in more detail in the final IT Zone report... some time in the next month, if Gordon Brown gives me any peace.

John Stokdyk
Editor
AccountingWEB.co.uk

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By Abacjm
04th Apr 2003 01:54

What is the problem with Drummohr?
Editor,
This company, based in Scotland, and supplying tax and an Accounts&Tax software packages has been mentioned a number of times in the survey report and on each occasion, you have managed to get the name WRONG!!!

I am not sure if the name is an anglicisation of the Gaelic word for Big Back or not, or whether it is of German origin, but I suspect Stuart Ritchie, a contributor to this site, would also take umbrage at the lack of care taken by an AccountingWeb page Editorial team to such a salient detail as the Company name!

NOTE THE SPELLING AND MEMORIZE!!

As to the survey itself, it seems rather slanted towards promoting that absurdity called SAGE, despite falling market share and despite it being favoured (I suspect from a purely historical base) by accountants in practice!

Yours etc and Scottish

John Mackay

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John Stokdyk, AccountingWEB head of insight
By John Stokdyk
04th Apr 2003 09:09

Apologies to all concerned
Thank you for pointing out the error John, and my apologies to Druhmmor, you and all its other users. The spelling will be corrected in the article and attached to my computer screen for future reference

Aside from ignorance, all I can plead is a bit of "m" blindness after trying to get the "u" & "h" in the right order.

Sorry.
John Stokdyk
Editor
AccountingWEB.co.uk

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By AnonymousUser
04th Apr 2003 15:41

Sage Product Satisfaction ?
I am told that the whole of the Sage Accountants Division Staff were instructed by their marketing department to go onto Acc Web and complete this survey in favour of their products. Could this have had an effect on their results ?

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