Fighting the Brand Wars

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Mention the Public Broadcasting program This Old House, and many people will respond “Bob Vila.” It’s a remarkable testimony to the power of brand, because Vila has not been with the show since 1989 and his successor, Steve Thomas, has been holding forth since and, in my opinion, has done a much better job.

What is a brand? In layman’s term, it’s any name, logo, phrase, or slogan that sticks with the public and evokes a particular product or service. By that definition, Vila (who is doing another home improvement show) is a brand.

The power of brand will soon be tested in the accounting software industry,  where the brand wars are about to begin in earnest.

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The development represents a fairly predictable stage in the evolution of the market. Markets begin with a new technology or product and a plethora of small companies form, marketing competing products that often have competing standards. The fragmentation ends as standards develop, weak companies fold or merge, and a very few strong players emerge. Witness soft drinks and automobile companies.

We have reached that point in accounting software in which Best Software, Microsoft Business Solutions (built around the former Great Plains), Accpac, and Intuit are the strong players. At the Stampede reseller conference, Microsoft announced a branding campaign that will kick off in the current quarter. Late in September, Best Software and its parent Sage detailed brand plans during a strategic conference in Boston.

We’re going to see more noise in this market. That’s because in the early stages of a market, small companies promote product and build infrastructure. They don’t have broad strategies or broad product lines. In the brand building stage, companies embark on the much more expensive proposition of building brand and corporate image, which means the volume level will rise significantly soon.

Theory aside, the real question is whether Microsoft has such brand recognition that, in the words of the Borg on Star Trek, “Resistance is futile.” Microsoft would like to have the world believe that its triumph is inevitable. If you remember the 1980s when nobody got fired for buying IBM, we are sort of at the stage where nobody gets fired for buying Microsoft. But, the competition isn’t a bunch of chumps, and Microsoft doesn’t do everything right.

Some of my MBS friends opine that Best has a problem because its parent in the rest of the world is known as Sage while it is known in the United States as Best Software because of its loss of a trademark suit. I don’t buy that as a sign of Microsoft’s inevitable triumph. Microsoft could still dominate, but automakers manage brands that are as well or better known than the corporation name (e.g. General Motors). Besides, Microsoft isn’t worry free. The movement by several countries to support Linux, because they fear being too dependent on Microsoft, will give the folks in Redmond something to concentrate on.

But brand depends also on product lines. And the suites fielded by all these players are still developing. Brand-name recognition will play an important role in the competition. However, the brands have to rest on a solid base, and hopefully that base will include products that carry more weight than just the fact that the software is from Microsoft—or from any other competitor.

Robert Scott — Editor

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Speaking of putting together things, financial planning software vendors are putting together suites that combine applications needed by advisors and clients. Associate Editor Carly Lombardo talks to leading suppliers about their efforts.

Senior Editor Richard McCausland examines another building effort, the work by mid-market accounting software companies to erect project accounting applications. The leaders are bringing new initiatives to the market as they expand their products lines. McCausland also outlines how the convenience and low pricing of Internet-based CPE is luring droves of users to the online world.

Finally, reviewer Barry Knaster reviews fixed asset software to see how the leading packages track those tangible goods needed to run business.


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