Market research firm the Yankee Group announced that Intuit, Sage and Microsoft have reconfirmed their dominance in the small and midsized accounting and enterprise resource planning software markets.

The Boston-based firm said that during 2005, several significant events occurred in the accounting and ERP business application segments that changed some of the market dynamics, including Microsoft's entrance into the low-end accounting applications arena and significant product launches from Intuit and Sage. Integrated business application suites from NetSuite and SAP also gained increased presence and penetration.

"Interest in, and market demand for, on-demand software-as-a-service business applications will continue to increase, influenced by the much-improved return on investment, lack of information technology resources and growing need for mobility and ubiquitous connectivity," said the firm's senior analyst for small and midsized business strategies, in a statement. "Future success in this market will rely on unified product strategies and on-demand business models, channels and market segment focus."

The report says that the market opportunity for vendors in the accounting/ERP business applications segments is growing. Many SMBs still maintain and manage their financial data on Excel spreadsheets, which provides vendors with opportunities to seize greater market share. Additionally, pressures to comply with the Sarbanes-Oxley Act and other regulatory requirements, along with the increasing need to electronically exchange information with larger customers and partners, add to the demands to improve operational efficiency.

Within the market, the Yankee Group said that Intuit's QuickBooks and QuickBooks Online products still dominate companies with between two and 99 employees, followed by Sage Software. Microsoft leads the 100-to-999 employee midsized company market, followed by Oracle and Sage.

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