With one move, the nature of the game in the consolidation of the accounting software reseller market has changed.

The small had been getting bigger for the last few years with the pace picking up in the last 18 months. In June, two Accpac resellers, Applied Data Solutions of Malvern, Pa., and Dynamic Software Solutions International of Miami, merged to form a $9 million company called ADSS Global. That's big by the standards of the top Microsoft resellers and it's an even bigger deal when compared to the rest of the Sage channel. It was, however, just the beginning.

Since then, the big news is a merger that brought together the MIS Group, which has done most of its software business selling Sage's Timberline construction and real-estate line, and the Enterprise Resource Group, which concentrated on the MAS family of applications. All of a sudden, there is a $27-million-a year dealer that is handling only Sage products, at least on the financial and CRM software side. This organization, based in Dallas, has five offices, including Houston, Las Vegas, Denver, and Phoenix. The company will eventually come under the name MIS Group.

This changes things significantly.

There are three organizations with VAR activities that are larger: Tectura, Columbus IT Partner, and ePartners, with the first two getting much of their bulk through international acquisitions. After those, probably the only mid-market reseller larger than the newly minted VAR is the CPA organization, RSM McGladrey, which bulked up with the addition of the former American Express Tax and Business Services.

Right now, there aren't many players in the $20 million to $30 million range that handle mid-market accounting software--at least not pure VARs. There's Iteration2, a Microsoft reseller that is poaching the low-end of the Oracle market and CBiz Technologies. But most of the mergers have simply put companies in the $5 million $9 million range of annual revenue.

Don't expect that to last. It's hard not to expect a reseller arms race as competitors see the need to match the size of the new players. The plan outlined by Robert Muir, the head of the MIS Group, and ERG's CEO Greg Boyd, who now reports to Muir, calls for a one-stop technology shop. Companies that buy financial and CRM software can also get their hardware and networking services from the MIS Group, and only have one neck to choke, as they say. If you're a mid-market customer who needs these kinds of services--it's probably overkill for the lower part of the mid-market--this has a lot of appeal.

The interesting thing is that this deal involves a Timberline dealer. It was very noticeable when Sage announced its top reseller lists this year, half of them were Timberline dealers. That means the Timberline people have the resources to do it again.

And I can't see why it won't happen again.

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