January 16, 2006 6:00 PM PST

Microsoft hits subtract button on accounting package

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Microsoft is offering a big price cut on its small business accounting software in an effort to spur sales of the product.

The company said on Monday that it is offering a $100 instant discount as well as a year of free unlimited support to buyers of its Small Business Accounting 2006 software. With the discount and a mail-in rebate, the software package was offered for as low as $49 at CompUSA this past weekend.

Microsoft said that the pricing move was an effort to draw more attention to the product and not the result of weak sales.

"We're in this for the long haul," Microsoft Business unit President Jeff Raikes said in an interview. "We didn't expect to take a significant portion of the market overnight. We're taking the early momentum and building on it."

Introduced last September, Microsoft's Small Business Accounting 2006 is Microsoft challenge to several well-entrenched competitors, including Intuit's QuickBooks and Peachtree's set of accounting tools.

However, analysts say that Microsoft has yet to make much of a dent in the market. According to NPD, which tracks retail sales, Intuit's QuickBooks accounted for 93.7 percent of November retail sales, and Peachtree had 4.5 percent. Microsoft had just 1.3 percent of retail sales for the month.

"I think Intuit is probably breathing a sigh of relief," said NPD analyst Chris Swenson. However, he said he doesn't expect Microsoft to give up. "They tend to come out with a product, figure out where its weak and improve upon it.

Raikes said that sales have met expectations, but Microsoft did not give a specific sales figure. Microsoft expects the price cut and accompanying marketing to cost roughly $10 million, on top of the $100 million that the company has already spent developing and mareting the software.

"I think small businesses have historically shown that price offers get their attention," Raikes said.

Raikes said that Microsoft had expected most of its sales would come from small businesses that did not have accounting software, but instead has seen half of its sales are from existing QuickBooks customers.

Swenson said that Microsoft's software has not been particularly visible at retail stores, while QuickBooks typically occupies prime real estate.

"They put a lot into in-store marketing," he said.

But Microsoft may have to do more than cut prices and up its advertising budget, Swenson said. He noted that both Intuit and Peachtree offer versions of their products tailored at specific industries, such as construction or retail.

"To really increase their share going forward I really think they need to copy Peachtree and Intuit with a more vertical focus," he said.

The $100 instant savings is available through April 30 through retailers Best Buy, CompUSA, Office Depot, Staples and OfficeMax. Also, Dell is shipping the software, as well as a small business version of Office that includes the accounting software on some of its small business PCs, including Dimension and Optiplex desktops and Latitude notebooks.

16 comments

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Every package has problems
I used Peachtree for 12 years before switching to QuickBooks in 2003. Last year I tried to install a trial version of MS Small Business, but it would not install properly, turned out to be difficult to uninstall, and I gave up on it. QuickBooks has not been free of difficulties, at times corrupting the company file and ruining data during year-end activities.
I still miss one particular report that only Peachtree has ever offered, but it was a standard customer report. Intuit has had since 2003 to answer my request for the inclustion of this functionality, and it is still not available in the 2006 version. MS does not offer it, either.
How I miss Peachtree....
Posted by spammagnet (4 comments )
Reply Link Flag
Maybe it's not the package but the PLATFORM
Nothing uninstalls properly on Windows... especially Windows... Your best bet, for such a mission-critical applications as company's financial management package, is to check out the Macintosh platform and see if it doesn't serve your interests better.
Posted by npxzbebq (78 comments )
Link Flag
Every package has problems
I used Peachtree for 12 years before switching to QuickBooks in 2003. Last year I tried to install a trial version of MS Small Business, but it would not install properly, turned out to be difficult to uninstall, and I gave up on it. QuickBooks has not been free of difficulties, at times corrupting the company file and ruining data during year-end activities.
I still miss one particular report that only Peachtree has ever offered, but it was a standard customer report. Intuit has had since 2003 to answer my request for the inclustion of this functionality, and it is still not available in the 2006 version. MS does not offer it, either.
How I miss Peachtree....
Posted by spammagnet (4 comments )
Reply Link Flag
Maybe it's not the package but the PLATFORM
Nothing uninstalls properly on Windows... especially Windows... Your best bet, for such a mission-critical applications as company's financial management package, is to check out the Macintosh platform and see if it doesn't serve your interests better.
Posted by npxzbebq (78 comments )
Link Flag
Should hit DELETE button on Windows!
(Haha! Couldn't resist...)
Posted by npxzbebq (78 comments )
Reply Link Flag
give it a rest
Look, you like Macs. This is not a Windows vs. Mac story. This is an accounting problem story. If you say there's a better PROGRAM -- some magice super duper package -- only available on Macs that MIGHT be relevant. Might. But the knew jerk reaction of Mac fanatics AND Linux fanatics is really tiresome. The design of the programs -- whether Quickbooks, Peachtree or MS has NOTHING to do with the platform. Intuit makes a Quickbook version for Macs, after all. They aren't good on one platform and lousy on the other. The platform is not relevant in this case, OK? You and your ilk damage your cause by relentlessly pushing Macs no matter what the subject is. All is does is make you look socially inept.
Posted by ChazzMatt (169 comments )
Link Flag
Should hit DELETE button on Windows!
(Haha! Couldn't resist...)
Posted by npxzbebq (78 comments )
Reply Link Flag
give it a rest
Look, you like Macs. This is not a Windows vs. Mac story. This is an accounting problem story. If you say there's a better PROGRAM -- some magice super duper package -- only available on Macs that MIGHT be relevant. Might. But the knew jerk reaction of Mac fanatics AND Linux fanatics is really tiresome. The design of the programs -- whether Quickbooks, Peachtree or MS has NOTHING to do with the platform. Intuit makes a Quickbook version for Macs, after all. They aren't good on one platform and lousy on the other. The platform is not relevant in this case, OK? You and your ilk damage your cause by relentlessly pushing Macs no matter what the subject is. All is does is make you look socially inept.
Posted by ChazzMatt (169 comments )
Link Flag
Product is Part of the Problem
I was a beta tester for the MS product. My impression is that the folks in Redmond do not understand how a small business works. They want the user to do things their way, which was often non-intuitive, convoluted, and difficult to understand.

In my experience running small businesses and working with small business owners, we just want to get it done and not have to learn the Redmond way of doing things.

Intuit's Quickbooks has nothing ot worry about from this product.
Posted by RickyFr (10 comments )
Reply Link Flag
Product is Part of the Problem
I was a beta tester for the MS product. My impression is that the folks in Redmond do not understand how a small business works. They want the user to do things their way, which was often non-intuitive, convoluted, and difficult to understand.

In my experience running small businesses and working with small business owners, we just want to get it done and not have to learn the Redmond way of doing things.

Intuit's Quickbooks has nothing ot worry about from this product.
Posted by RickyFr (10 comments )
Reply Link Flag
Heh, heh
This is a joke post, right? I get it -- use a Mac for your business! Ha, ha!

Man, I needed that laugh today.
Posted by Neo Con (428 comments )
Reply Link Flag
Heh, heh
This is a joke post, right? I get it -- use a Mac for your business! Ha, ha!

Man, I needed that laugh today.
Posted by Neo Con (428 comments )
Reply Link Flag
Mac users
I agree with that. If Mac users hae a grouse against windows, they should stop cribbing. It is no way a better software but a limiting software. Can you believe that they still work on outdated software while Windows has newer features? Though I am a disgruntled MS user, can you check out why most still prefer windows?
It sounds like you guys have a prennial gripe against windows. And now that Mac has come onto an Intel based platform, come down to earth Guys. Why don't you read the performance reviews on an Intel for the Mac and the Windows? We no longer are in the stone age....
Posted by thedevilbegone (139 comments )
Reply Link Flag
Mac users
I agree with that. If Mac users hae a grouse against windows, they should stop cribbing. It is no way a better software but a limiting software. Can you believe that they still work on outdated software while Windows has newer features? Though I am a disgruntled MS user, can you check out why most still prefer windows?
It sounds like you guys have a prennial gripe against windows. And now that Mac has come onto an Intel based platform, come down to earth Guys. Why don't you read the performance reviews on an Intel for the Mac and the Windows? We no longer are in the stone age....
Posted by thedevilbegone (139 comments )
Reply Link Flag
 

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