In the 1980s and early 1990s, there was a category of business called computer specialty stores. There were thousands of them selling personal computers and products. Few of them exist in the same form today. The mass retailers such as CompUSA compete more effectively as hardware becomes a commodity. Many dealers ended up as value-added resellers, selling systems and software from non-retail locations.
Like what you see? Click here to sign up for Accounting Today's daily newsletter to get the latest news and behind the scenes commentary you won't find anywhere else.
The same thing could happen again in the software reselling market. The dynamics that we have seen for the last 20 or so years could radically change and the VAR of today could disappear or become something fundamentally different.
We are seeing the emergence of a new breed of player at the top of the market in players like Tectura, Watermark, and Avanade.
Redwood City, Calif.-based Tectura is becoming part systems integrator, part development house. Watermark, based in the Netherlands, is spinning out its software development, but it, too, is part reseller and part systems integrator.
Avanade, a high-end consulting firm, just moved into the reselling market with the purchase of Entegrate, a top Axapta VAR. IDS Scheer, a German-owned systems integrator that has been in the United States for ten years, is building up its Microsoft reselling at its Atlanta base.
The one thing these companies have in common is size, size beyond anything that we've seen in this country. Tectura intends to hit a $300 million run rate by the end of the year. Avanade employs 3,000 and it's hard to believe that it won't try to expand that MBS practice.
While Watermark is outsourcing development to another company, which will distribute products throughout the Microsoft channel, Tectura is continuing to develop its vertical products internally. In both cases, these companies are no longer merely resellers, in the normal sense of that word.
Watermark's new affiliate, 2Inspire, will be working to distribute its products through other resellers, while Tectura has talked about plans for its own channel, but has not yet announced details.
The Mobile Office|
Technology makes it possible to do work from anywhere. So how are accounting firms using new technology to be more productive? Associate Editor Carly Lombardo looks at the impact of mobile technology on how accounting professionals are using hardware, software, and communication devices to make work easier in "The Mobile Office."
Associate Editor Riccardo A. Davis examines products that let accountants do what-if manipulation of their clients' data in "What If's Become I See's."
In, "Got the 404 on That?" Accounting Technology investigates how Sarbanes-Oxley and IT audits are turning out to be opportunities, not pains, for many accounting and consulting firms.
The "Fixed Assets Round Up" by Lombardo follows the trends in software that are making it easier to follow the intricate calculations required by fixed asset and depreciation software.
Meanwhile, this month's software review, "Replaying Time," covers the leading products that help firms turn their hours into invoices.
Both of those companies are focusing much of their development efforts on Navision. Avanade, by contrast, was founded by Accenture and Microsoft to spur interest in Axapta.
These heavyweights are not necessarily emerging as competitive threats to smaller competitors, although Tectura CEO Terry Petrzelka talks about having a global presence and a local touch. But they do seem to be turning into another layer in the distribution channel.
What's a small VAR to do? According to Orlando Ayala, who heads Microsoft's channel program, they must specialize, becoming truly vertical. That's a message that's been around for a while, but the focus the market is going to require for success will be even more narrow and it's going to be tough.
But as always in business, when wasn't it tough?