by Seth Fineberg

For Best Software, it is becoming clearer that the nonprofit sector is ripe for the picking - and its nonprofit accounting software unit, Micro Information Products, could be pushed to the forefront of that strategy.

Until recently, MIP was only one of many business units of the ever-growing Best Software. Now that Best is consolidating into two key divisions, Austin, Texas-based MIP is primed to be a cornerstone in a vertical market considered one of the most vital to Best’s future.

“We are, without a doubt, in one of the top areas that Best is betting on for growth,” said Kent Hollrah, senior vice president and general manager of nonprofit and government solutions at Best. “There is so much money under management and most nonprofits aren’t run very well. We are here to help them to be run more profitably.”

Hollrah also noted that the nonprofit sector is “severely underserved” by accounting software makers and, right now, awareness is the biggest challenge.

MIP has been under the Best umbrella for two years, but Hollrah admits that it has been only recently that MIP and many of its channel partners have felt like part of the family.

The company’s recent Insights Conference in Orlando, Fla., gave him a clear indication of where MIP stands in the eyes of Best partners.

“We had a large number of partners in other channels that raised their hands to say, ‘We are interested in MIP or partnering with resellers that carry it,’” Hollrah said. “It really was overwhelming excitement, I thought.”

MIP got a competitive kick last year, when Best acquired nonprofit fundraising management software maker JSI Fundraising Systems. This allowed Best to go head to head more with one of its top competitors, Charleston, S.C.-based Blackbaud.

MIP’s key products have been the fund accounting systems NonProfit Series Pro, for nonprofits with budgets of about $1 million to $10 million, and Advantage NonProfit Series, for entities with budgets of more than $10 million. Two years ago, it launched an “Intro” product for very small nonprofits of under $1 million.

Last year, MIP tapped into Peachtree, another Best company, for marketing, and began recruiting resellers from Best’s middle-market group. It also began co-marketing new technologies with Best’s Specialty Products Group.

A year ago, from 10 percent to 15 percent of MIP’s new license sales were to Peachtree users. Hollrah said that, right now, MIP’s new license sales are closer to 20 percent, but they could do better at migration.

Best started a migration program this year with Peachtree that, though deemed successful, hasn’t had quite the degree of success that the company had with Peachtree to MAS 90.

The company plans to step up marketing efforts in the near future and coordinate more with Peachtree and Best’s migration center initiative. The center consists of trained sales people who can call Peachtree customers and evaluate who may be ready to migrate.

Cranford, N.J.-based Solution Strategists, a long-time MAS 90 and MAS 200 reseller, has only sold MIP for the past two years, and it has been challenged primarily due to economic conditions. Interest has, however, picked up lately, according to president Art Nathan, who was encouraged by the increased attention that Best is giving MIP.

“We’ve sold Best products for years and, though MIP doesn’t weigh in as much as we would like, the demand is there, as is the competition,” Nathan said. “Best is clearly helping [MIP] with engineering expertise, so we expect to see a higher-level product come out for MIP.”

As for MIP’s competition, Intuit surfaced on the nonprofit scene by acquiring long-established sector software developer American Fundware. That deal has given Blackbaud access to Intuit’s vast financial resources.

Last year, Blackbaud unveiled plans to make its fundraising tool, Raiser’s Edge, available for sale by its resellers, but to date it is “still working on the issue,” and the product continues to be sold direct, according to Steve Dettor, Blackbaud’s director of channel sales. Blackbaud recently instituted a 20 percent referral margin for its resellers as an incentive to push the product, he said.

Blackbaud’s Financial Edge product remains its big seller, and new reseller incentives have been added to aid its growth. Dettor said that their partners used to have to sell $120,000 worth of software to make 35 percent margins. They now only have to book $30,000 to get that.

“Our reseller program may be a bit newer than the MIP and Best product lines, but we have grown from 18 to 36 in the last nine months,” Dettor said. “The nonprofit space is robust, and with the 1.4 million or so nonprofits out there, a certain percentage have substantial-enough budgets to purchase our products.”

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