Many older computer industry veterans (meaning people over the age of 40) probably remember the Osborne computer. The brainchild of Adam Osborne, what was then considered a portable computer (24 pounds) was a spectacular hit and then tanked with equal fanfare when the company pre-announced its next generation product while the first one was still on the market.
Microsoft Business Solutions has a next generation product in the labs, one designed to provide different flavors of its accounting software, currently called Great Plains, Solomon, Axapta, and Navision, to run on a common engine. Given the public timetable for the product, many resellers are betting NextGen doesn’t become a real market factor until 2007.
But it could become a market issue now, if it hasn’t already. It’s not the next Osborne. Microsoft is not making the same mistake and the software life cycle is much longer than hardware’s. However, selling against NextGen could help competing resellers now, and hurt the chances of Microsoft’s own channel. That’s the danger of the art of pre-announcing. You must give your customers and channel an idea about your direction. But it has risks, as the Osborne experience showed.
Current MBS customers will continue to upgrade their products until NextGen in order to hang on to the maintenance agreements. But if your company is a non-Microsoft user, wouldn’t NextGen give you pause? The average life span of accounting software installations is about seven years. I believe smart competitors could argue something like the following (and I subscribe to the theory that you don’t run down the competition.)
"Of course, NextGen will be a quality product. Microsoft will use its resources to make sure of that. It will certainly deliver improved performance over the current generation of products, such as Great Plains and Solomon," says the sales consultant. "But do you really want to buy a system now and then have to switch to a version 1.0 product in a couple of years and invest all that time and effort in retraining your staff and converting files?"
One of my friends chides me that there aren’t that many new customers to fight over. However, I think the battle is for the DOS base that hasn’t upgraded, specifically MBS’ own 18,239 Great Plains Accounting customers, 17,012 RealWorld users, and 7,951 Solomon III sites (September figures), all of whom have been happily ignoring the company’s modern product line. Since they’ve waited this long, they can probably wait on NextGen. Throw in customers with higher-end systems moving down, and lower-end systems moving up, and the accounting software market isn’t completely dead in the middle.
Some of these DOS users might actually be ready to buy. And if you are the competition, why not use good old FUD (fear, uncertainty, doubt) against a product line that can’t fight back until it’s on the market? It’s a time-tested technique.
