>>>What do you mean about the entire market going on life support? Accounting packages like A/P, A/R, and G/L? I am not disputing what you say, because that isn't a product category I follow, but it seems like a timeless business need. Why have canned financial packages taken a dive?
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>Great question, MIke.
>There are several reasons, but the most important one is that the "accounting problem" has basically been solved and companies are generally happy with or will put up with the systems that they have because there is little or no marginal benefit to upgrading to higher priced systems.
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>After all, how sexy can I make printing a check or posting a journal entry be?
>When is the last time you heard someone say "Wow, look at how that balance sheet ties out!!!!! ?"
>Believe it or not, people used to say things like that.. just as my father used to marvel at how the engine started when he pressed the starter on his car.
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>The second is QB, which is the Walmart of that market. It does what it does very well at low prices and that's great for the customer, but it has wiped out the low end of this market, which we once used as a seeding ground for larger systems.
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>Finally, the recession and M&A have drastically shrunk the middle market. The business community has becomes increasingly divided into very large companies which use Oracle, SAP, etc and tiny companies which use QB.
>The accounting system industry has mirrored that pattern and the number of vendors selling to the middle market has shrunk drastically.
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>In 1999 there were more than 100 Mid Market Accounting System VAR's like us selling to the NYC area. Now there are fewer than 10.
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>There has been a corresponding shrinkage at the top end as well.
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>For the VAR, the money to be made in this market is in developing customer-specific applications that interface with the accounting system.
>That's what we do and it's a pretty good field, but that produces zero revenue for the accounting system vendor and if anything makes it less probable that the customer will ever change the accounting system.
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>So when MS bought Great Plains and Navision at the peak of the market, they were doing what Google was doing.. reading yesterday's newspaper.

Great answer. And kudos for being part of the 10% of your competitors who have survived.

I smiled at your lines about the "excitement" of accounting. There was a great throwaway scene in the movie "Moonstruck," starring Cher and Nicolas Cage. (Who knew Cher would go on to have the more responsible career?) It wasn't even a scene, more of a sight gag. The father of one of them, Cher's I think, was sitting in the back yard reading the Journal Of Accountancy, laughing and slapping his thigh.

http://www.journalofaccountancy.com/