Things are picking up for the accounting software resellers--at least for those that are still in business.

Ever since Y2K sucked all the demand into 1998 and 1999, followed by a weak economy and the dot-com bust, new installations have been less than plentiful for many VARs, who have stayed afloat by serving their installed bases or moving into less-penetrated areas such as the market for Customer Relationship Management software.

But as the Accountants Media Group researched its selection of Pacesetters late in 2004, it became clear that many VARs expected an upturn this year. As the numbers come in for firms that are submitting revenue for Accounting Technology's Top 100 firms, a ranking selected solely on the basis of revenue, it seems the year has started with a boom.

One factor that is helping is Sarbanes-Oxley, which is driving business to the CPA consulting groups. However, this more a matter of selling brainpower than software. For the more pure-software play, it looks like companies that have been nursing along aging accounting systems are starting to buy--and buy bigger systems--as they gain confidence in the economy.

This is, of course, for those reselling operations that are still around. It is quite clear that a lot have been acquired, merged, or gone away quietly as the demands for more sophisticated selling of services replaced the easy days of pushing software boxes.

There is also an increasing emphasis on profitability. It looks like the old business formula holds. Those companies that trimmed expenses during the hard times will see money falling to the bottom line at an increased rate.

Last year was one of nervousness. Even when sales picked up, many resellers had no confidence that business would stay up. This year, the smiles are broader, less forced. Things may actually stay good.

 

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