Microsoft Tries Again

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Several years ago, a Microsoft marketing team visited the offices of Accounting Today, where I was then working. Microsoft was in town to launch a new low-cost accounting package, called Profit, and I was ready to see the fabled Microsoft marketing machine in action.

What I got, instead, were people who had no clue about the product's position in the market. They spent much of our session on a Friday asking me questions about a product that was scheduled to hit the shelves on Monday. They asked questions that should have been answered months earlier. Small wonder Profit failed.

So here we are again as Microsoft makes another run at the low-cost accounting market with Microsoft Office Small Business Accounting, which will launch late next year. Perhaps the year-long beta is a sign that Microsoft is more serious this time.

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Why has Microsoft had such dismal luck at the low end? I think lack of understanding of accounting is a big part of it. Not having the right people in place-people who understand how accounting works in small businesses and how professional accountants fit into this picture-is another.

Microsoft Tries Again

What's in store for 2005? Accounting Technology turned to some leaders in the profession to get their views about where technology will take us over the next 12 months.

This issue also incorporates the annual list of Top Ten Technologies from the American Institute of CPAs, the result of its polling of technology-minded members.

And what's in store for the move to outsource the preparation of tax returns? Associate Editor Riccardo Davis studies the issue in "Outsourcing Sparks Returns"

Whether or not outsourcing turns out to be a hit, payroll processing already is, as more vendors jump into the market. In "Building a Profitable Payroll Business," Associate Editor Carly Lombardo examines the opportunities for accounting firms.

Speaking of opportunities, there are plenty in financial planning if you have the right tools. Reviewer Dave McClure investigates some of the best in "Financial Planning Segments."

Riccardo Davis is new to Accounting Technology. We invite you to welcome him to the publication. He is a veteran newsperson with solid experience at major newspapers who will be an asset to this publication and this market.

Enlightenment starts with the realization that most small businesses don't understand accounting, nor do they want to. It's a necessary evil and they'd be quite happy to never learn. This is where Intuit got it a long time ago and it's a big factor in the success of QuickBooks. I think Microsoft itself previously viewed low-cost accounting software as bad medicine-something it had to take for its own good, not something it liked. Microsoft also tended to view success as something of a divine right, not something it had to earn.

Still, a lot of people think this will be Microsoft versus WordPerfect and 1-2-3 all over again. I don't think so. I think Intuit and Best are a lot smarter than WordPerfect was. And at the retail level, Intuit is as skilled as Microsoft. Microsoft may have more money to throw at the market-but this is still a sideline for Microsoft. It's core business for Intuit.

However, many observers feel that by linking the accounting package to Office-with the possibility it will essentially be given away-Microsoft will make a big dent this time. It also looks like Microsoft will put more resources in this effort, and more importantly, may add people who understand the accounting market, too. That's key to making this succeed. Microsoft may understand retail, but retail accounting products require the support of accounting professionals who help small businesses use the product. That must happen if this effort is to succeed.

Why is Microsoft back? It has to be here. Best and Intuit have talked about their low-end products choking off Microsoft's air supply. Without a low-end product, Microsoft hasn't developed a user base that can migrate upstream. In a saturated market, that's an untenable position.

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