Another round has been fired in the war at the low end of the mid-market.
That war has been underway for some time with Intuit's QuickBooks Enterprise Solutions challenging traditional mid-market products. But Microsoft's introduction this month of its Dynamics Business Essentials Edition brings the action to the place business wars are traditionally fought--pricing.
There has been a gap in the market for some time. In the early 1990s, companies like Great Plains and Solomon left some customers behind when they introduced Dynamics and Solomon IV, Windows-based products that were more robust products than their DOS predecessors.
Microsoft tried, and failed, to fill a gap between low-end applications, such as QuickBooks, and mid-market products such as Dynamics, with Small Business Manager, which became Small Business Financials. But purchasers who could afford SBM/SBF didn't want to pay for the services that bring VARs most of their profit.
Then, Intuit's QBES brought mid-market capabilities to QuickBooks users who didn't want to learn a new program, or pay more for products and services. This year, Sage Software entered that same market with its Peachtree Quantum.
At $2,250 for core modules for a single user, Business Essentials officially is not a response to QBES and Quantum, but it has that effect: QBES starts at $3,000 for five users. They are at least closer to being in the same ball park.
How do these products fit into the reseller world?
To sell a lower-cost product that has fewer services associated with it, a vendor needs resellers that have a different cost structure than the traditional Sage and Microsoft VARs. Sage resellers that handle BusinessWorks have done this for years. That's the kind of channel I thought Microsoft should have created for SBM/SBF.
Intuit's new reseller program for QBES is likely to draw resellers that aren't going to handle more expensive applications with full-scale services.
This battle should give CPAs firms a chance to get back into the technology consulting and reselling market. QuickBooks consulting is often more about accounting than technology. It should also make software more affordable for the low end of the mid-market and it probably will produce discounting that will ripple upstream.
Why do I think so? This has always been the way technology products operate. Products get more powerful and less expensive, and they put the pinch on products with higher price tags..
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