Softworld puts some buzz into accounting software

(By Philip Carnelley, 15 Oct 09, 09:00) We visited the Softworld business applications software show yesterday, aimed primarily at medium-sized businesses. Considering how mature the accounting software industry is, and the tough economic climes, there was a surprising ‘buzz’ about the show. Suppliers said that things were pretty tough going but worth it: “We’re having to work bloody hard,” one CEO told me “but we’re getting results.” Several told of their growing businesses, including Iris, COA, who are apparently quite pleased with the last 6 months, and Access, who have recently finished their year end showing 28% growth.

This seems almost paradoxical – they can’t all be growing in a flat market? Our friend Dennis Keeling, who for many years has consulted on choosing and using accounting software products, provided the key: he told us his database had 2000 products on it a couple of years ago, but is down to under 600 now – and many of those are in ‘maintenance mode’. Thus, companies with a strong offering can pick up business from those deceased companies and products, as organisations migrate to competitive products that have a future.

So, what makes a ‘competitive’ product? Things buyers are looking for, over and above standard accounting facilities, include mobile/remote access; better analytics; self-service facilities for managers and others across the organisation (e.g. for expenses entry/authorisation); and – of course – Cloud-based solutions.

The conference sessions on software-as-a-service were, literally, standing room only. The established players are responding – for instance Coda now offers Coda2Go built on Salesforce’s Force.com platform. Yet the big names have a considerable ‘on premises’ legacy which continues to build, epitomised by Sage’s UK roll-out of its international ERP X3 product (aimed at the upper-mid market) at the show. Against them there are an increasing number of hosted solutions available, mostly aimed at the small business. This gives the established players breathing space to respond with offerings suitable for the more complex needs of the mid-market. But respond they must, or the newcomers – companies like Netsuite, Kashflow and Xero – will be there to eat their lunch.

TechMarketView subscription service clients will able to read our in-depth report on the changing shape and structure of the UK software industry very soon.