Street Talk: Reader Views


Microsoft once again plans to attempt to enter the low-end accounting software market with Microsoft Office Small Business Accounting. What factors do you think make its chances for success different than in the past? If they tie it tightly with Windows and Office and keep it easy to use, it has a serious shot. If they bundle it with Small Business Editions of the software-like they intend to-it has an even higher chance of succeeding. However, most CPAs have become comfortable with QuickBooks. This means they will recommend it to their clients, rather than have to get Microsoft's software-and worse yet-learn how to use it. This is a much bigger barrier than MS is aware of. The other big gap is training. There is a plethora of options for QB training that is cheap and effective. MS can counter this, but I have heard of no plans to do so. My money is on MS figuring out how to succeed here. They need a lead-in for their mass market and a clear way to stay inside the MS family. I sense that this time they are far more committed than they were when they took their first faltering steps into this market.

Jeff Hapeman
Clifton Gunderson
Madison, Wis.

Microsoft seems to want to position itself as a more-structured and controlled product than Intuit's QuickBooks. It feels that accountants would then be more likely to recommend Microsoft than Intuit. However, QuickBooks' 3 million or so customers enjoy the ease-of-use and flexibility afforded by a loosely-controlled accounting package. So, Microsoft's positioning is off from where the current user and decision-maker want to be. To effectively compete, Microsoft needs to come out with a fast, flexible, and low-priced accounting software package with easy tie-ins to purchase orders and CRM, areas where QuickBooks is lacking.

Partner Insights

Andrew Goloboy, CPA
Goloboy Gallant & Associates
Needham Heights, Mass.

Microsoft's chances for success are better than in the past because nobody knew the original Microsoft Profit application when it was introduced. Today, Microsoft has an army of Certified Consultants who know the Great Plains application. Having said that, I believe that the biggest problem facing Microsoft will be one of consulting rates. The small accounting application user is used to paying $65 to $95 per hour for consulting. The average Great Plains Consultant charges $150 to $200+ per hour. I believe Microsoft will need to find a way to entice, and certify an army of new consultants, who are willing to accept a much lower hourly rate.

Steve Lublin, CPA
CFO Consulting
Orlando, Fla.

Microsoft's first venture into low-end accounting (with Microsoft Profit more than 10 years ago) ran into several problems as follows: 1. Lack of a payroll module. 2. Unanticipated complexity of support calls which included more questions about accounting than the product. 3. Lack of a decent product launch and marketing strategy. Microsoft won't make these same mistakes this go around. The new product will offer payroll, including tight integration with ADP payroll. More importantly, look for Microsoft to include this new product in the Microsoft Office Suite, which will put the product in the hands of millions of small businesses instantly.

J. Carlton Collins, CPA
Accounting Software Advisor
Atlanta, Ga.

The primary difference between the upcoming release of SBA and previous attempts in this market space is the combination of other Office tools into a single licensing package. If Office products can integrate with SBA easily, companies like Intuit may find it tougher to compete from a feature perspective given their architectural choices. Nevertheless, a largely loyal Intuit customer base is going to make it difficult for Microsoft to take market share. Microsoft is likely to create additional small business incentives to purchase package licenses. Assuming a small business can save a couple of thousand dollars every other year in license costs, the story will be compelling provided the software works effectively.

Further, once inside the Microsoft licensing engine it is harder to break away, as history has demonstrated.

Jerry Johnson
Lighthouse Group
Pasadena, Calif.

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