What sort of software supplier should you be looking for? By David Carter

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David Carter argues that buying a new accounts package has become much more difficult in recent years. Industry consolidation means that there are many well-known packages out there that are no longer being actively developed, but are being kept alive to milk the maintenance revenue. How do you can recognize and avoid these sunset packages?

Youve decided that your current accounts package is no longer good enough; its time to go out and buy a new one. And its a very big decision, since packages nowadays dont just cover the accounting function, they cover the whole business.

So its a massively important decision, and yet choosing a package has become so much more difficult in recent years because theres been so much consolidation in the industry. The same packages are around as befor...

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23rd Jul 2007 13:59


Pricing on A1S has not been officially released. I was told they are looking at $160/month/user all you can eat. That's in the public domain.

Henning Kagermann said in an analyst session the target is the 50 user business at around $50-100K pa depending on configs. These are figures well within SMB enterprise costing models.

But as you know - that sort of price comparison (with B1 and anything else) alone is meaningless.

Many people I know are looking at A1S going DOWN to 20 user businesses in early course. I could justify that - even at around $140-160.

It won't compete with Microsoft in the short term on surround strategies because that would drag them into additional development for localisations in the lowest cost territories that they're not ready to undertake at the moment. But don't be surprised if that happens in the 2010 timeframe.

B1 gets killed either way. Not because they're not interested but A1S is too compelling at all sorts of levels.

The existing infrastructure argument doesn't hold. A1S and similar solutions provide businesses with zero upgrade requirements meaning their infrastructure can last almost indefinitely or alternatively go to a wholly mobile environment at low replacement cost (£3-500/user).

As an interesting aside, they can integrate Zoho suite if they choose. The initial dev work has already been done. That would kill Duet in a flash and provide even greater cost savings plus allow them to move up the chain to A1N customers. That is for another day but all the same, it is making for some interesting conversations elsewhere.

Cost is obviously an issue but what is of much greater interest is the ability to easily collaborate both internally and externally. I'm writing about this as a topic separately at ZDNet and occasionally at my place.

PS: For a Microsoft specific update, check this at ZDNet

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By jacp400
23rd Jul 2007 08:29

Hi Dennis

I'm curious about your comment on b1. i read an article on David Terrars site which seemed to suggest that the cost of a1s would be around £20k per year for a 10 user system.

b1 is about £15k up front and around £3k per year. apreciate there is a cost of infrastructure saved but most small/medium companies will already have a server for other applications and for file and print anyway (not angling for a debate on google docs or edit grid here :-) ).

Does the price point alone not mean that b1 and a1s can coexist or are sap not interested in the smaller revenues?

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20th Jul 2007 10:17

You know what I'm going to say but...
How can you assume the current crop of packages are not going away other than the fact that PE companies (+ Sage) are milking maintenance revs?

Not one of the packages you describe in this round up is 'modern' so to say that these are the choices for a business that's outgrown its incumbent is rather like saying we'll replace your old shoes with a slightly less well worn pair. Now if you believe that buyers are only after a risk free option then great. Let them give the companies you mention all the IT oxygen they can suck.

If on the other hand you want to give your clients something that has a path to the future (which is the usual reason to change) that allows them to derive genuine value then I'll count on the fingers of less than one hand the vendors I would trust from this list (excluding MSFT.)

I'd go so far as to say that in those circumstances, I'd almost certainly recommend reviewing open source solutions. And let's not forget the on-demand players. And yes - I have success proof points.

I really am amazed you've come up with this

You're wrong re: Exchequer but I'll leave you to work that one out. And as for this pearl: "guaranteed stream of maintenance revenue" what planet are you on? Who's guaranteed? Shareholders? Am I as a buyer supposed to draw comfort when I'm ready to switch?

And then there is this: "companies that are so big that they are bid-proof – Microsoft, Sage, SAP?" Errr - have you been following the news the last year or two? Maybe not. Both SAP and Sage have been the subject of potential acquisition on more than one occasion.

DK's words have been proven wrong by your own analysis of PE so why is that thrown into the pot?

If you look at what's going on at Sage right now you'd be hard pressed to think they are on anything other than an odd and winding road. And that's before you consider the amount of traction Microsoft has gotten from Sage's user base.

And which market are we talking about here? I sincerely hope you don't mention B1 in the next piece. Anyone with an ounce of knowledge will realise that's a dead duck in the wake of A1S. Similarly, your colleague John Stokdyk has signposted what I can only call a gift to Microsoft with its latest shuffling of the pack. Which leaves...

If this is meant to be an analysis for decision making purposes then I'm sorry but it just won't do.

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10th Aug 2007 16:57

"Maybe you should buy packages which come from well-known companies that are so big that they are bid-proof – Microsoft, Sage, SAP?"

Sage are listed company and have a market capitalisation of £3.5bn. Recent speculation over purchase of Allied Boots by Private Equity for £11bn. How does this make Sage bid-proof?

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