SAGE BUYS ACCPAC CHEAP .
After a year of questions about who would buy Accpac, Sage answered by anteing up $106 million for its Pleasanton, Calif.-based rival, owned by Computer Associates. Sage gets a stranglehold on Canada because of the dominance of the Accpac and Simply Accounting lines and Softline's BusinessVision there. The deal adds Accpac's $88.7 million for the year ended March 31 to Softline's roughly $80 million and Timberline's $62 million, all signed during the year. Ron Verni, CEO of Sage's subsidiary Best Software, says Sage will top $1 billion in revenue and that total should push Best over $600 million. By comparison, rival Microsoft Business Solutions expects to top $700 million this year. (But then there's that gazillion dollars the parent company has.) It also gives Best enough different products to stock a Wal-Mart. Sage is paying 1.2 times Accpac's sales. It paid about 1.3 times revenue for Softline and almost 1.7 times for Timberline. As Verni says, it's a good time to be a buyer. CA reported it got $88 million for its 90 percent ownership of Accpac and will record an $88 million pre-tax gain. I'm assuming about everything Accpac got with the purchase of SBT was written off, therefore. CA bought Accpac so long ago, its book value must have been pretty low.

ACCPAC, SOME OTHER NUMBERS .
When President David Hood said Accpac was having double-digit growth, he wasn't kidding. Accpac's fiscal 2003 sales were 10.3 percent higher than the $78.4 million 2002. It earned $5.4 million before taxes in 2003, a nice improvement from a nearly $10 million loss last year. There was a 2.6 percent increase in software fees, coupled with a 43.1 percent gain in maintenance revenue for fiscal 2003 to reach 10.3 percent in overall growth. For the half ended September 30, software licenses totaled $23.8 million, up 25.5 percent, with maintenance hitting $25.2 million, up 28.2 percent, to boost the top line to $49 million, up 23.1 percent. Accpac lost $312,000 for the half, much better than its $879,000 pre-tax loss a year ago. Accpac was expecting $28 million in revenue and $27 million in pre-tax income for the December quarter, meaning that it will easily top $100 million in revenue this year. Hood had 160,000 in options as reported under the amended S-1. The real winner was former president Rick Wysocki with 105,000 shares. Not bad for a guy who CA fired in 1998. Accpac had just under $14 million in cash at the end of calendar 2002 and $4 million at deal time. I'm assuming at least part of the other $10 million went to pay off the remainder of the $26.7 million that CA loaned Accpac to buy SBT in 2000.

INTUIT CLEANING HOUSE .
Intuit has shaken things up substantially in its mid-level executive ranks. The latest to leave is Tom Alanson, head of the consumer tax group, deciding it was "an appropriate time to pursue other interests," in the official words of the press release. One online newsletter speculated that Alanson, reportedly an avid surfer, really is pursuing other interests. He joined four years ago as vice president of tax strategy, and at first also oversaw the professional tax ops. Reaching his conclusion that it was time to leave with much greater speed was chief marketing officer, Tom Weigman, senior vice president and chief marketing officer, who barely got his photo in the executive gallery on the Web, having been hired in September. That follows on the heels of the announced departure of Dan Manack, senior vice president accountant business, who is being replaced by Brad Smith as head of the newly named Accountant Central. I still love that name. Accountant Central—these things are just the small gifts that make each day of writing this newsletter worthwhile. (Last month, I flipped Smith's title with that of Karl Grass, who really truly is the guy heading professional tax operations. Intuit denies the claim in the last newsletter that its Lacerte operations are seeing some user defections. Renewals have never been better, the company says.)

HONEY, WE'VE SOLD THE COMPANY .
Different members of the Best family learned about the Accpac deal in different ways. For Brian Austin, director of public relations for Softline North America, it was when his fiancée, Susan Sheridan, senior vice president of marketing for Accpac, woke him at 3 a.m. to give him the news. Sheridan was working late to get the information onto the Accpac Web site. Well, now any secrets will all be within the Best family.

CRM, GOOD OR EH ?
How hot CRM is right now depends on who you talk to, and that seems largely to divide along party lines. Many Best and Accpac resellers are clearly enthused. Solutions Strategist, a Cranford, N.J.-based Best reseller, has formed a CRM division. Another long-time reseller said he was shocked to realize that CRM was his top line and accounting his weakest, a sentiment that more than one Best reseller shared. And Accpac's eCRM is one of the most talked-about products, even from its competitors (the other hot product buzz is for MBS' Axapta). On the Microsoft CRM front, the reaction is largely, "It's okay. It's an early version product. You can write around it." However, the Microsoft product can pay off. In2G8, a Seattle-based reseller formed in 2002, has landed the account of the Special Pharmaceutical Distribution Division of Cardinal Health. The deal for Microsoft CRM is valued at $400,000 from December 2003 until June for license, server, and implementation revenue.

MICROSOFT POLLING CHANNEL .
A couple of people say Microsoft is making a real effort to listen to its channel. It brought together 35 top resellers worldwide, including seven from the United States, in a conference in Barcelona, Spain, in November. "They are trying to learn," says one attendee. "Things have improved a lot." Still, at year's end a Navision reseller termed the channel "a train wreck." The cars will likely get back on track if Microsoft keeps talking to people. You know, people in the Solomon and Navision camp seem really happy with their software. It's the company they have been having problems with.

NETSUITE RETOOLS .
With a new name, NetSuite (the former NetLedger) has a new approach to reselling and some new bodies. In the latter category, it brought on Michael R. Williams as senior vice president of worldwide sales. Williams came from Exodus Communications (now part of Cable & Wireless). NetSuite also hired James Ramsey away from the mother-ship (Oracle) as vp of small and medium business sales. The company is also opening itself up to developers. No SDK is in the offing, but president Zach Nelson says the use of Web Services will enable developers to tie vertical applications into the system. NetSuite says it now has 300 resellers, which did 25 percent of its sales in 2003.

EXACT STARTS USER FEST .
Exact Software is joining the movement to holding user conferences, scheduling its first ever from October 3 to 4 in Chicago. That puts it in the same game as MBS with Convergence and Best Software with, well whatever the one-time show it held was called. Best postponed last year's show because of its reorganization, it said. So with the acquisition of Timberline, Softline, and Accpac it won't still be reorganizing? Exact labeled its confab Engage and will bring together customers for its e-Synergy, Macola, JobBoss, Max, and Alliance product lines.

ACCOUNTMATE NEW INTERFACE .
A new interface will be unveiled to AccountMate, the source-code product that has ended up in the Best Software arsenal thanks to the purchase of AccountMate's parent Softline by Best's owners, the Sage Group. The new coat of software paint, a complete interface rewrite, is expected to be unveiled at the AccountMate reseller conference in February. The conference will also give AccountMate resellers the first view of their new partner. Among those scheduled to attend is Taylor Macdonald, Best's channel guru.

FROM THE INBOX .
From a reseller at a large accounting firm that sells software from both major players: "Best is offering to have Dave Butler or Ron Verni call any prospects we have before year end to help close deals. I'm still waiting for Doug [Burgum] and Orlando [Ayala] to make the same offer from Microsoft."

XBSS BUYS CIS .
A new company has taken over an old player as Xpert Business Solutions and Services has acquired Centerprise Information Systems, the Akron, Ohio-based organization headed by Doug Weintraub. CIS was attempting to build a VAR organization, and purchased Weintraub's operation, the former Brunswick Integrated Computer Solutions, which then bought MicroAccounting Solutions of Dallas. MicroAccounting was sold back to its former owner Bill Harris last year. Weintraub's outfit closed 2003 with $4.2 million in revenue. Centerprise still owns the Centerprise Technology Advisors, whose reselling offices include the reselling operations of the former Follmer Rudzewicz CPA firm, whose non-attest operations are part of Centerprise.

DO NOT CALL POLICY .
I've simply been overwhelmed with information lately. So in light of the Do Not Call list and the anti-spam efforts, I have drafted my own "Do Not Talk To" policy as follows: You must have a signed statement from me giving you permission to talk to me. To get permission, you must send me a message asking for same, either by email or by postal service. However, you must get my permission to send me a message via either delivery system. If you do not get my permission to send me a message, you cannot send me a message, and therefore you cannot talk to me. If you need to contact me by telephone, you must have permission in writing to call me. In the event you reach me, I need to contact my superiors for permission to talk with you and I will need their permission in writing to send you any written or email messages. I look forward to hearing from you.

THOUGHT OF THE MONTH .
We are all Version 1.0 people.

RANDOM THOUGHTS .
Figured out the problem with Parmalat's financials—they weren't refrigerated after being opened. ... Hi, I'm Frodo. You may remember me from Lord of the Rings. If you still feel exhausted after successfully completing that epic quest, you may be suffering from clinical depression. Not everyone can go to the Undying Lands, so ask your doctor about Prozac. It will bring out the elf in you ... Late in 2003, Texas A&M reported cloning a deer. In a related development, a scientist who successfully cloned Canada geese was beaten to death by enraged New Jerseyans. ... Be sure to sign up for our new Accountants Media Group promotion, "Win a wedding with Britney Spears!" Get an all-expense paid weekend in Vegas with the pop queen and a no-frills annulment.

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Consulting Insights January 9, 2004 (next issue mails January 23, 2004)
By Bob Scott, Editor
bob.scott@amgpubs.com

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