War breaks out on software turf

Competition is mounting for the business of large accounting practices as
providers switch their attention away from the smaller firms.

Iris and Digita ­ well known for providing software to smaller practices ­
are attempting to push up into the medium and large-sized accounting firms
market, traditionally the remit of Sage and MYOB’s accounting division.

Martin Leuw, chief executive of Iris, said there were ‘incredible growth
opportunities’ for his company among the larger practices, as accountants were
now looking for full suites of products, rather than purchasing from a host of
different vendors.

Firms are looking for a ‘complete overview’ of clients, and recent M&A
activity among accounting firms had opened up opportunities to provide an
integrated product set that includes accounts production, tax and practice
management software, said Leuw.

He confirmed that Iris was in dialogue with a number of larger
practices, but was not providing a firm timescale on finalised contracts.
Digita MD Jerry Rihll said that his company’s relationship with
LexisNexis, which is helping to market the company’s software across the UK,
allows Digita to ‘reach above the noise’ other software companies are making.

‘One of our challenges is making people understand how we have grown.
Incumbent accounting software suppliers have created a rose garden where
customers have put up with mediocre software and investment. We’ll show that
over the summer we’ll take business away from MYOB.’

The company has ‘just signed’ a £100,000, three-year deal with one accounting
firm, with another ‘major player’ set to be announced imminently, Rihll said.

Simon Crompton, the general manager of MYOB’s accountancy division, said the
moves within the marketplace added ‘great competition’, and predicted
accountants would be the ‘real winners’, as the vendors look to gain new
customers.

But he revealed to Accountancy Age that MYOB was planning on
entering Iris and Digita’s patch ­ that of the smaller accounting practices ­ in
2006.

ICAEW IT faculty technical manager Paul Booth warned that, although
competition was healthy, any further software company consolidation could lead
to fallout for practices.Go to AccountancyAge.com for breaking technology and
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