the small-to-medium enterprises (SME) market battle rages, Best Software seems
to be taking appropriate steps to establish itself as a more visible/audible
force to be reckoned with. It does not intend to remain a tacit mid-market powerhouse
any longer. Given its parent's notable revenue level coming close the, e.g.,
J.D. Edwards' revenue, and being higher than those of Geac,
Baan, Microsoft Business Solutions (MBS),
SSA GT and Lawson Software, making it an ultimate
juggernaut within the SME market per se, the time has come for Best Software's
mind share to become proportional to its size. Enter its long incumbent status
and proverbial focus on the SME marketplace, its impressive product portfolio
assembled through a number of sensibly acquired solutions that address the needs
of the market segment, its humongous compound customer base (nearly 1.7 million
users in the US and nearly 3 million users worldwide, compared to modest' 112,000
and 270,000 MBS' users respectively) and an extensive distribution channel of
6,600 value added resellers (VARs), over 5,000 retail outlets, in addition to
telesales, direct email & Web ordering, look for Best Software/Sage as one of
the biggest barriers (in addition to Intuit) the likes of Microsoft, Oracle
and SAP should face in their entry of the market segment.
already captured a lion's share of the market estimated to consist of several
millions of small enterprises, and continuing to capture new customers (i.e.,
with reportedly 47,000 new customers in the US and 120,000 customers worldwide
for the first half of 2002), the likes of MBS will likely have a work cut out
for them despite their recently unveiled sound strategy and product offering
Lays Enforced-Concrete Foundation For Its Business Solutions).
It is always amazing to see how opposites attract as well as to conversely see how similar some adversaries can be. While it is possible that Best and MBS might have looked over each others' shoulders while doing their recent strategy homework, the more likely scenario is that a broad impeccably integrated horizontal offering with selected vertical enhancements, nurturing resellers network, providing simplified financing and pricing, as well as catering for evolving scalability & migration needs of customers are necessary tenets of the success in the market segment that both contenders will have grasped.
customers continue to increasingly realize the importance of seamless integration
between front-office and back-office applications, and to consequently look
for one strategic vendor (i.e., one throat to choke') to fulfill and be solely
accountable for the vast majority of their business application needs, particularly
in the lower end of the segment. Also, many of them have long outgrown their
entry-level accounting solutions a la QuickBooks, DacEasy
or Peachtree, and are looking to its original provider for
functional expansion opportunities in contact management/sales force automation
(SFA), CRM, HR/Payroll, and so on. Often in that quest, they turn to a trusted
adviser (e.g., their accountant) for an advice.
the above-announced (see Part
One for Details) enhancements of Abra HR/Payroll suite, SalesLogix
CRM package and the well-liked ACT! contact manager application, as well as
the addition of vertical add-on solutions to the Best's existing ERP product
array should indeed render Best Software an enterprise application vendor with
a wide-range footprint covering, inter alia, CRM, HR/payroll, fixed asset management,
manufacturing & distribution, time & expense tracking, budgeting, project accounting,
fundraising & fund tracking, and general financials/accounting software packages.
Not to mention the well-attuned value proposition for its resellers within all
distinct vertical segment.
most vendors targeting mid-market customers should be intimidated by the fact
that a number of the large enterprise applications vendors are trying to sway
into their space (see SAP
Tries Another, Bifurcated Tack At A Small Guy and PeopleSoft
Internationalizes Its Mid-Market Forays), the above facts will have given
confidence to Best's CEO's claim that his company continues to "take the oxygen
out of the room" for growth in the mid-market for intruding vendors. Its formidable
slew of products comes as a result of multiple years of the parent Sage Group's
effort to rake up a pile of software products through a bevy of acquisitions,
although many with a common thread. Companies such as former specialty products
providers Best Software, Interact Commerce and Peachtree
Software, all had strong brand recognitions in their respective target
niches and a market presence in the SME market in which Sage had long specialized
is Part Three of a four-part article on Best Software.
One detailed recent announcements.
Two discussed the company's strategy.
Four will cover Challenges and make User Recommendations.
Sage's decision to finally group its plethora of enterprise-level applications in North America under the Best brand, although a virtue created out of necessity (due to the brand name conflict lawsuit's verdict), emanates from the company's feat to deliver highly integrated components, many of them with almost best-of-breed traits. Individually, both Interact and the old-new Best Software have long respectively been delivering attractive front-office/back-office solutions for small and mid-size organizations. Offering all of these products now under the Best Software master brand has a potential to provide customers with integrated CRM, accounting, and business management solutions they need to compete in today's ever-changing and evermore competitive environment.
more than two decades, the evolving and ever-growing software company has strived
to deliver easy-to-use, scalable and customizable applications through its portfolio
of renowned brands, including Abra, MAS 90, MAS 200, MAS 500, FAS, Micro
Information Products (MIP) NonProfit Series,
Peachtree, Timeslips, Platinum for Windows (PfW), ACT! and SalesLogix, among
many others. To communicate the nascent notion of the Best Software brand most
effectively to prospective customers, the company has recently begun an aggressive
awareness campaign, with the following three core messages hoped to strike a
chord with the target market:
Best Software has insights for the life of small and mid-sized business, given
its longevity (more than a quarter century) within the small and mid-sized
business (SMB) marketplace.
Best Software provides integrated Front-Office and Back-Office Solutions
Best Software provides ease of product migration, as its product lines supposedly
work together, allowing customers to migrate easily to more sophisticated
Best Software solutions as their needs change.
to address the needs of its evolving customers in need of software upgrade/migration,
Best now offers a customer migration center, as well as a migration strategy
aimed at helping the higher-end companies within its small business base that
are ready to move to the mid-market and beyond what its lower-end Peachtree
or BusinessWorks Gold software can offer. The company has long
taken steps to adopt a migration strategy under the "Keeping it in the family"
mantra, as it has been offering its own life cycle path (i.e., Peachtree to
MAS90 and MAS 200 to the MAS 500 suite), and more recently the similar migration
path from the ACT! contact management application to SalesLogix, a more comprehensive
and customizable CRM suite.
In fact, Best is counting on its growth coming primarily from the migration of its smaller customers to its mid-market enterprise software, as ~68% of its revenue currently comes from the installed base activities (i.e., support contracts & maintenance, upgrades, payroll services, training, etc.). Moreover, in addition to the first half of fiscal year 2002 migration statistics mentioned earlier, more than 285,000 customers maintain their support contracts, providing a stable recurring revenue stream to the vendor in these days of reduced activity in the market.
Taking on Microsoft
Another trump for Best Software would be the fact that it could spar with MBS on many levels and even in the areas one would expect Microsoft to be superior. For one, as mentioned many times earlier and likewise its revered foe, Best offers multiple flavors of enterprise systems to accommodate varying needs across the range of company sizes and industries, albeit with much clearer delineation and less internal competition between the products. These start with low-cost desktop' solutions like Peachtree and ACT!, both sold primarily through retailers as well, like MS Office. While nobody will dispute Microsoft's brand equity, Best could find its consumer product equivalent in ACT! that has long become beloved by the salespeople who use it.
ACT! 6.0, like all the versions before it, is designed to replicate the way a sales rep thinks and acts, without coercing a particular awkward sales process or requiring much, if any, additional effort to record or attach data. To that end, the new Contact Lookup feature lets the user schedule periodic searches to mine detail data from his/her contact records without scrolling through all the contacts to locate it. One can also track accounts that need attention by scheduling regular searches, to be performed within certain date ranges, to, e.g., find customers who made no purchases within that time, and then set up an automatic e-mail merge to remind them of the offering. Moreover, one can also set reminders to pop up alarms with all pertinent information for an appointment before a meeting begins. The ability to schedule activities with regularly occurring events is also attractive however trivial it may sound, while the reminder will activate an alarm even if ACT! is not running. The list of neat features goes on to challenge any other equivalent product's capabilities.
up-range and extending the organizational reach, SalesLogix 6.0 seems to be
positioned well to fend off the upcoming newcomer Microsoft CRM
product by offering seemingly more mature and broader functionality, both on
the user side and the administrative side, with a built-in workbench running
on Microsoft's VB Scripting. The new release appears to further address one
of the biggest challenges for earlier-generation CRM applications, which has
been remote synchronization for the remote client side users, and departing
from data synchronization architecture based on cumbersome flat files in the
direction of relational databases. In addition to the web-enabled product, SalesLogix
offers tight integration with Microsoft Office products, which makes it easy
for small to mid-size businesses to better utilize pre-existing applications,
and make them less amenable to switchover to Microsoft CRM. Best would be a
case in point of MBS' competitors swiftly coming up with their CRM products'
Outlook and Office integration (which is anticipated Microsoft CRM strong selling
feature) while further establishing their expertise in some vertical industries.
Taking on the ERP Market
to enterprise systems, MAS 90 is targeted at medium-sized companies with 10
to 500 employees, and features more than 25 accounting, light manufacturing,
distribution, and e-commerce modules. MAS 200 is the client/server version of
MAS 90, and handles higher transaction volumes, and supports multiple databases,
including Microsoft SQL Server. Smaller companies with up to
50 employees are covered by BusinessWorks Gold, which, with 11 integrated modules
and strong reporting tools, was devised to bridge the gap between entry-level
products and MAS 90. As for stalwart specialty HR/payroll products, include
Abra Suite for smaller organizations or Abra Enterprise
for mid-market users, which together have a large user base of approximately
15,000 customers in different vertical markets. The system supports more than
4,000 tax jurisdictions and all standard government reports that can be filled
electronically, while industry-specific reports are also available.
the top of the range, MAS 500 (formerly marketed as Best Enterprise
Suite and before that Acuity Financials) from Best's
Mid-Market Division, is an integrated, SME-focused, international ERP package
with multi-currency capabilities, targeted at companies above $25 million in
annual revenue and with over 20 to 1,000 employees. It is web-enabled, with
browser access to the entire functionality, via Terminal Services, business
alerts, and workflow management. The package combines e-commerce, distribution,
manufacturing, project accounting and financial functions, and integrates with
SalesLogix CRM. It features strong financials and project accounting functionality,
and solid manufacturing (including a product configurator, engineering change
management (ECM), materials requirement planning (MRP), and advanced planning
& scheduling (APS)). Particularly strong is distribution functionality, with
robust inventory replenishment and supply chain visibility capabilities, which
has prompted MBS' recent acquisition of Trinity Myridas and
its partnership with Preactor to close this functional inferiority.
Best has recently bolstered the manufacturing capabilities of the solution as well. Among the recent enhancements is a visual, rule-based drag and drop' scheduling board that electronically simulates the magnetic white board (Gannt Chart) found in many production scheduling offices. Another is an alert system that tracks key activities and measurements, and notifies the responsible individuals via e-mail or pager when something needs their attention.
upcoming product release promises migration tools that facilitate moving data
from the legacy system in place, and in particular tools to move data from MAS
90 and MAS 200. Moreover, the product blends its financial and accounting modules
with Abra HR/Payroll, FAS Fixed Asset Management and analytics offerings from
Best's Specialty Products Division. Also, project accounting, a number of pre-built
integration hooks to popular third-party applications, extensive drill down'
and drill around' navigational capabilities, and authentic customization tools
(particularly the intuitive screen customization tool, used by ordinary' less
IT-oriented users, and with the ability to track/preserve changes for seamless
future product upgrades), represent another set of attractive features. Supported
platforms are Windows NT/2000/XP and Microsoft SQL
product is fairly new though, with less than 1,000 installations, but it has
been developed from the ground up for Microsoft SQL Server, and is also developed
in Visual Basic for Applications (VBA), making
the transition to Microsoft .NET straightforward. Likewise
many of its counterparts, Best Software is also envisioning Microsoft .NET technology
as a means of achieving "connected business events across companies", whereby
a number of embedded Web services are already available to that end. Therefore,
given their access to the same technologies, it is no wonder that many other
peers have delivered their products leveraging .NET and other Microsoft technologies
much sooner than MBS, which, ironically still has to grapple with their disparate
proprietary technologies and large user bases that are still using these (e.g.,
Great Plains' original Dexterity environment
and support for Pervasive database, Navision's
proprietary integrated development environment C/SIDE, which
includes a proprietary Navision Server database and a proprietary
4GL programming language; Navision strong analytical features using Sum
Indexed Flow Technology (SIFT); and the proprietary
MorphX graphical development suite for Axapta).
Vertical Industry Focus
Best Software has also long opened its software to third-party developers to spur broader industry-oriented capabilities, and it has also been integrating its desktop software and Web services (e.g., by offering e-mail invoicing and electronic bill payment). As for the industry focus, Best Software's aiming at four key vertical industries -- distribution, manufacturing, non-profit and accounting -- with each segment soon to have its own entry-level version of Peachtree, is logical. Peachtree for Manufacturing and Peachtree for Distribution, which are slated for release in 2003, will complement MAS 90 and MAS 200, and MAS 500 products, which have more advanced levels of manufacturing automation and distribution capabilities, and will be a transitional upgrade option for customers using Peachtree Complete Accounting. With over 150,000 manufacturing and over 145,000 distribution customers, over 55,000 and 51,000 of which are estimated targets for migration respectively, Best does have a notable SME manufacturing and distribution customer base, particularly at the lower end of the spectrum. Rounding out the Best Software's offering should allow the vendor to solidify its position in its target market. Whereas other vendors such as Epicor and Microsoft have been trying to move up-market, Best will likely maintain its focus on the lower-end of the mid-market.
Additionally, the company sells almost entirely through value added resellers (VARs) as per MBS' business model. The company has particularly found an army of certified public accountants (CPAs) to be very effective in marketing its bottom-of-the-range of accounting products. Formation of its new Accountants Division and introduction of the Best Software Accountants Network (BSAN) should further nurture relationship with over 40,000 accounting and bookkeeping firms. At the enterprise level, niche markets and vertical applications are developed by more than 100 of MAS licensed Master Developers. Best's VARs have a reputation for relatively low cost implementations often with equal service and software license costs (due to the implementation methodology and business templates) and with a go-live within 60 days period, although in part this reflects the smaller scope of implementations too. Best, on its hand, has been praised for good partner program, replete with seminars, training and boot camps, which focus on business management, sales & demonstration skills, lead generation, marketing, customer management, and implementation aspects.
The culture of fostering cross-selling Best solutions between its VARs will have likely been much better setup partly owing to clearer demarcation lines between products than it would be in the case of MBS' VARs, which are dealing with overlapping and competitive product lines of disparate origins, and are consequently looking suspiciously at each other. One has also to remember the parent Sage's widespread global coverage as to discern the company's true position within the global SME market. Also, for the rookie' Microsoft CRM product, MBS has very little users' feedback so far, whereas its VARs that will implement it, although being numerous, will not have many CRM experts and CRM implementation experience, which is quite the opposite in SalesLogix' case of over 500 seasoned resellers.
concludes Part Three of a four-part note on Best Software.
One detailed recent announcements.
Two covered the company Strategy.
Four will discuss the Challenges faced by Best Software and maker User Recommendations.