Microsoft builds retail and adviser channels for Office Accounting

Notes from across the pond...

Starting late last March, UK business software shoppers were able to go into retail stores and buy copies of Microsoft Office Accounting, the new business package launched into the UK last November, according to a report on our sister site, AccountingWEB.co.uk.

The retail route is one of several channels Microsoft is building up to gain a foothold in the UK for Office Accounting, which has been available in the U.S. for three years.

Free and trail downloads are available from the company's UK Web site, where full versions of the junior version for SMEs are for sale for £149.99 alongside the £249.99 Office Accounting Pro edition for power users and accountancy firms, which comes with a free 12-month subscription to the companion payroll service.

As with almost every other business software developer in the UK, Microsoft sees accountants as a vital stepping stone towards a wider market base and over the past few months it has recruited 2,300 accountants into its Microsoft Professional Accountants' Network (MPAN) with the lure of £500 worth of software and free training.

Gareth Arnold, head of Microsoft Office Accounting in the UK, told the audience at last week's Digita conference: "We recognize that we've come late to the market. To become a serious and credible player in this industry, we need to have a big user base. Which is why we're engaging with you today."

The Digita connection is significant. Arnold has an 11-year relationship with the Exmouth-based tax and practice software developer and has relied on its experience and contacts to market Office Accounting to practitioners. Two years ago at a similar conference, Digita users were invited to try early beta test versions of the program and the company will help Microsoft run a series of Office Accounting road shows and training days in the coming months.

Speaking afterwards at the Digita event, Arnold expanded on the company's stepped launch strategy: "We purposely wanted to drip feed the product into the market because we wanted to give it to accountants before the masses could go into the shops and buy the product. We didn't want users going to their accountants and finding they had not heard of it."

"An accountant may not download a program just because it's free. But if clients have a Microsoft product and it integrates for free, what are you going to do when they come to you?" Arnold said.

"That's where MPAN comes in - we don't want accountants to be left behind, so we'll give them the product for free software, and the skills and training they need to get up and running. Now if a plumber goes to their accounting, we hope they will know it and be able to have some conversations with the user about it."

Sage and QuickBooks are the dominant suppliers in the small business accounting software market. Rather than presenting Office Accounting as a "Sage-killer", Arnold said Microsoft was more interested in selling to the million businesses that either do not run computerized accounts, or use Excel. In this sector, Microsoft also faces competition from the new wave of Web-hosted applications such as Kashflow, WinWeb and Twinfield. But in Microsoft's view, the UK small business market still isn't ready for the software as a service concept - yet.

"There is a perception among individuals and small businesses that the web is not secure enough for their personal financial information," he said. "There's no point in offering tools and services that users don't want or trust today… People need to put their feet in the water and test it first."

Microsoft's new payroll service was a good example of something that will familiarize users with the benefits of software on demand, he said. "The individual details and pay rates are all held securely on the client machine, but all the calculations are done on the Web, where the central server can be kept up to date with any rule changes."

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