Almost exactly 2 years to the day after Microsoft announced the launch of Microsoft Office Accounting to a packed press conference in London, Redmond has decided to end “distribution and sales” of the product. The early release of the Express version as a free download over the internet took the SME market by storm with a reported 1.9 million downloads and installs in the first year in the United States and 100,000 downloads in the UK. So why has Microsoft snuffed out such a promising product and where does Redmond’s decision leave end users? Gary Simon, FSN’s managing editor looks at what went wrong and how Mamut is coming to the rescue of users in the UK.
The launch of Microsoft Office Accounting was a bold move. At the time the low cost Software as Service model aimed at the SME sector was in its infancy and end users could expect to pay anything from £100 to £500 for traditional packaged software that had neither the creative flair nor the advanced functionality of Office Accounting. Nobody except Microsoft could have contemplated the release of a fully featured accounting and business software package for free and the integration with the Microsoft Office suite made the package a compelling proposition.
If users were prepared to put up with advertising banners in the express version and did not need multicurrency processing, full inventory, job costing and order processing then the Express Version of Office Accounting was manna from heaven.
However, many at the time questioned a strategy that relied on giving away a package that one insider estimated had cost tens of millions of dollars to develop and market. Others remained suspicious that once captive, they would made to pay for the product through expensive upgrades, additional services and hidden costs.
The main justification for providing the software free appears to have been the ability to open up a completely new segment of the market, i.e. sole traders and start up companies that would not have spent several hundred pounds on shrink-wrapped software but would be prepared to trade their paper records for a free accounting package to easily maintain their books and keep the taxman at bay.
Speaking to FSN readers earlier this year John Thuneby, Microsoft senior program manager said, “Our vision is to level the playing field by providing valuable and inexpensive tools for small businesses to enable them to run their business more efficiently and focus their time on what they are best at - their business. People like free software - it is a lot easier to get people to try out cool new software when it is free and most small businesses in the UK today are not using accounting software. We want them to use Microsoft products. When the small businesses grow using our software they will upgrade to Professional.”
The exact number of users that upgraded their free “Express” software to the fully fledged “Professional” version remains a closely guarded secret but the figures may have been lower than Microsoft was hoping for.
But with the benefit of hindsight Microsoft’s expectations may have been set too high – hence the decision to quit the market. So what now for a startled marketplace that had grown to like Microsoft Office Accounting?
Well the first thing to say is that the product is robust and pretty much complete. Very few enhancements were planned for the 2010 version of the product and those that were on the slate related mainly to extra reports. The second is that Microsoft has arranged for continuing customer support to be provided by Mamut, a long-standing industry partner of Microsoft's in the UK and Europe, on the same terms and conditions as Microsoft. So although Microsoft will not be releasing any new software, and Mamut does not own the software, existing users of Office Accounting will be able to get support on the same terms and conditions as Microsoft undertake to provide under their Product Lifecycle Support Policy.
In principle this means that “Mainstream” support is available until January 2014 and “Extended” support until January 2019, but realistically how many people are going to sit back for 5 years knowing that development has hit the buffers?
Understandably many users will be annoyed about Microsoft’s decision. They certainly have not covered themselves in glory over this and plenty of people have vented their anger on Microsoft’s own forum. However, as ex-Vice President Dick Cheney once said, “stuff happens” and sometimes an involuntary move can work out for the best.
So what can you do? The first thing to say is do not panic! The software works and it is being supported by a reputable and experienced supplier (Mamut has over 400,000 European users). The most pressing issues is that the payroll service for Office Accounting will be discontinued on December 15, 2009 – which does not leave much time if you are one of the 1,000 users estimated to be using the Payroll service. But Mamut told FSN they are working on a solution and expect to announce a way forward soon.
Apart from the guaranteed support, Mamut is offering a free licence upgrade to its nearest equivalent products. “Mamut Office Mini” in the case of Express users and “Mamut Office Professional” in the case of Microsoft Office Professional users. Users of the latter may be pleasantly surprised to see that Mamut Office Professional offers additional functionality around CRM (Customer Relationship Management), web shop functionality and HR (Human Resources). Express users also benefit from more comprehensive functionality in Mamut Mini such as cash flow forecasting and dashboards. Depending on whether you are an Office Accounting Express user or Professional user there are additional offers on support and vouchers towards further upgrades higher up the Mamut product chain.
For customers with a December year end (around 75 percent of all companies) then the next 3 months will be critical to deciding the way forward, but with support covered off by Mamut and financial incentives to move to even more functionality in the Mamut product range then the outlook is not as uncertain as it first appears.
Over the coming months FSN will be following developments closely – so watch this space.