Can Specialists Win the Software War?


Deltek is a name not widely known in the general accounting software market, but it made news late in 2007 when it went public, and then in January hired former Sage Software executive Taylor Macdonald to build its reseller channel. Macdonald, as VP of Worldwide Channels and Sales Alliances, has acted quickly, recruiting his close friend, Peyton Burch, former COO of the MIS Group, Sage’s largest reseller, as director of channel programs.

Deltek is different than Sage and its chief rival Microsoft in that it is highly specialized, with two distinct markets, selling software to project-based organizations in the government market and in the market for architects and engineers.

It is not the only specialized company that is growing.

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Another non-household name, Activant, acquired Intuit Distribution Management Solutions last year for about $101.3 million. The high-end distribution package, Eclipse, didn’t make much sense for the maker of QuickBooks. But it added another line to the vertical markets addressed by Activant, which include hardlines and lumber and auto.

Then there’s Infor, which has spent time gobbling up all kinds of companies, and has a broad line of specialties such as apparel and footwear, automotive, metal fabrication, life sciences and aerospace.

The list should probably also include CDC Software, which owns ERP vendor Ross Systems, but which has lately looked more interested in the CRM market, which it entered with its purchase of Pivotal early in 2004.

Part of this is a normal result of shakeout as the generalists get stronger—if you can’t beat them, go vertical.

Some time ago, Epicor, which had been a general player, decided to focus on retail, hotels and resorts, sports and entertainment and food service. Last year, Syspro said it would concentrate on four market segments: medical devices, food, electronic equipment and machinery.

There’s a catch to this normal evolution and that is that the general accounting vendors have been telling their resellers to go vertical. Businesses want software that uses the terms that are prevalent in their market segments, that speak their language.

That may be a different ball game since the channel-based vendors can’t just switch gears themselves—they must re-educate at least a portion of the reseller base to serve these more specialized endusers.

Who wins this battle? The generalists who are trying to become specialists? Or the specialists who already know the field?

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Editor Robert Scott also writes “Consulting Insights,” a free, twice-monthly electronic newsletter that addresses issues concerning the consulting and reselling market. It’s insight with an attitude. If you want to subscribe, put the following in your browser address line: You can also visit us at

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