Interview: Doug Meyer, President SMB, Sage Software on Microsoft Small Business Accounting

As Microsoft gets ready to raise the curtain on its 7 September release of Microsoft Small Business Accounting product, it’s competition is not standing idily by. Intuit, in departing from what it usually does, released early news about its upcoming QuickBooks 2006 to be released in the fall.
Sage, maker of Peachtree has a large and loyal base of accounting customers and sheds more doubt on Microsoft’s success in the SMB accounting space. Sage writes:
Peachtree Accounting by Sage Software has helped small business owners balance their books since 1976. Microsoft on the contrary was developing the extinct DOS out of Bill’s garage in 1976.
Sage Software only focuses on small business applications and helping SMBs. Microsoft does not have a singular selling focus (XBox, MSN, etc.). Should we go on?
Peachtree Accounting version 10.0 vs. Microsoft’s SMB accounting version 1.0. Where you place the dot REALLY is important. Microsoft’s 1.0 version will most likely have the same glitches as other first version products.

I interviewed Doug Meyer, president of the small business division for Sage Software about this further:
Do you think that Microsoft has had enough time this time around to learn and possibly succeed this time?
Well, it’s an interesting prospect. I know they have done extensive research on how best to address the accounting needs of small businesses, when at the end of the day, they should have just asked us. We’ve been doing this- and only this- for years. So, I don’t believe MSFT will succeed this time. Everyone in the industry knows the score. They’ve tried before and failed; we’ll see if this time they handle it differently.
Why has MSFT failed in the accounting space while others (Sage, Intuit) have succeeded?
It’s really quite simple. At Sage Software we understand what is important: helping our small business customers do their jobs more efficiently– using the web, paying bills, doing payroll, sending packages. We’ve been doing this for 30 years. In addition, when it comes to financial data– trust is a critical factor. We’ve earned the trust of over 4.5 million customers over the years and small business accounting and business management is the life of Sage Software. It will be interesting to see if small businesses trust their financial data to the same company that has regular security breaches in their operating systems. Accounting is different. The small business market is different and more complex. The bottom line is that Microsoft is scattered– they do a number of things well– but they lack focus.
At Sage, we also recognize that the accounting software market is about much more than just shipping a great product. It is why we provide award winning customer support that enables us to get even more out of their software resulting in greater efficiencies and insight into running their business. It does not appear that Microsoft understands this aspect of the market.
Even though MSFT is doing many different things, clearly two things (Office Applications and Operating Systems) are going well?
Sure, a number of the things they do are going well, but again, they are scattered. Accounting to them is just another program.
Sage has a loyal base of customers, as do Intuit and other smaller players. It’s easier to keep the customers you have, but what about growth? How can growth be achieved?
As I mentioned above, accounting is just another program to Microsoft. To us, it’s a promise to our customers, not just the next sale. For new customers, we feel that our strong heritage in this market, coupled with our commitment to our customers’ success sets us apart, and helps give them confidence that they’re selecting an award-winning accounting package with a long history of supporting small businesses. Our relationship with our customers goes far beyond their initial purchase. For instance, at Staples, we are offering what we call our ‘start up success guarantee.’ In this program, new Peachtree customers have unlimited free access to our customer support for the first six months, plus a free one-hour session with a product consultant, to help them maximize their investment in Peachtree and get up and running quickly, smoothly and effectively. We want to be our customers’ vendor of choice for the life of their business- so it’s not just a sale to us, it’s a long term relationship.
This growth, would it come from new users (new businesses in some case) who are not using any accounting program or would it come at the expense of the competition? Those who switch from one product to another?
The reality is that this market is fairly well saturated. However, 600,000 new small businesses start up each year, so while the market is well-saturated, there is a constant churn, with new businesses being added to the mix. So, I would say that it’s some of both: new start-ups, as well as more established businesses who have outgrown their current systems and may be switching accounting packages or even some who are automating for the first time. Many of those customers will continue to choose Peachtree due to our superior product capabilities.