A Long Way to No. 3

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"What company is the No. 3 accounting software vendor?" one reseller mused as word of the pending purchase of Accpac International began to sink in.

Sage Group, the parent of Best Software, was the company that began the consolidation of the accounting software market in early 2000 with the purchase of what was then Best Software, the company that marketed the FAS and Abra line, and moved into mid-market accounting software with the acquisition of State of the Art, the company that originated the MAS 90 line.

Along the way, RealWorld, Damgaard, Solomon, Great Plains, and Navision vanished, some in a single step, some in two, into what became Microsoft Business Solutions (which one Navision reseller claims is still referred to as Great Plains by its Fargo, N.D.-based management). Best absorbed what had been AccountMate, SBT, Accpac, BusinessVision, Platinum for Windows, Timberline, and MIP. Just by itself, MBS expects about $700 million in revenue and the bulked-up Sage will hit $1 billion.

Yanking the Supply Chain

Partner Insights

Things go well in business when there is communication from one end of the supply chain to the other.
In "Supply Chain Management, a Big Hit," Senior Editor Richard McCausland tells how vendors increasingly offer the ability to tie what goes into the system with what comes out.
Meanwhile, McCausland engages in bird watching, watching the progress of the Linux Penguin in "Linux: Out in the Open." Just what are the advantages of this non-Microsoft operating system?
And if you watch things, watching the changes in sales and use taxes is virtually impossible without modern technology. How did they do this before computers? Associate Editor Carly Lombardo reviews the state of the software art in "Lifting the Compliance Burdens." Also, in this issue, we investigate the impact of the nearly completed vendor consolidation on accounting software resellers in "The State of the VAR Market." It's not just vendors who are getting together.
Finally, the signs of an improved economy are everywhere. To deal with the results-clients with more money in their pockets-financial planners need software such as the applications reviewed by Dave McClure in "Financial Planning Rebound?"

So who is No. 3? It's a great distance to Epicor Software, which just announced a deal to buy Scala, bringing Epicor to about $250 million. Next is Blackbaud at over $100 million, and somewhere further down is Open Systems.

But maybe, "Who is No. 3?" is the wrong question. The right question is probably, "What does it mean to be No. 1, 2, or 3?" Or more simply, "What is the market?"

Conversations with a number of veteran resellers over the last two months reveal that several found that Customer Relationship Management applications have become their best sellers, accounting software the weakest.

Is this an accounting software market with CRM added on, a dual accounting and CRM market, or even a market in which CRM and accounting blend inseparably? To describe the market as the third of these choices means that SAP with its all-in-one BusinessOne package may describe the market of the future. Is it a series of markets that will fracture along niche lines?

Or is it all of these?

I favor the final answer because I believe it to be true and that it offers hope that no one vendor, no one way of doing business will predominate. To pick any of these choices is to pick a model, and to pick a model requires a business plan--whether written down or in a businessperson's head. The models are changing. But the needs to pick a model and design a plan remain. Picking a model requires investing in a plan and executing it. Defining a market requires these things; it requires business people to declare themselves and make a stand.

It changes our definition of who the players are. It affects everything from the lines a business carries to the people it hires. It requires bigger resellers, there's no doubt about that--but it doesn't necessarily require that all resellers blindly adhere to one path, one vendor, one business goal.

It requires them to be true to themselves.

Robert Scott--Editor

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