Best-Case Scenario: ACCPAC Deal Could Create Channel Powerhouse in SMB Arena

By Rochelle Garner- CRN Magazine 

New York, NY, January 02, 2004 – When Best Software absorbs the products and operations of Accpac International, the combined company could become the product and channel powerhouse that finally gives Microsoft some real competition in the small- and midsize-business market.

The prospect could mean a happy new year for solution providers from both sides of the channel.

“We’ve been hoping this would happen,” said Alex Solomon, co-president of Net at Work, a New York-based solution provider that offers product lines from both Best and Accpac.

“Now Best can tell customers they can have hosted or not-hosted applications,” Solomon said. “Database? You pick it. And you can pick the [operating system]. This puts Best on an equal,if not better,footing than Microsoft.”

The combined company will boast more than 13,600 solution providers, including Accpac’s worldwide network of 7,000 business partners.

Both Irvine, Calif.-based Best and Pleasanton, Calif.-based Accpac offer business software aimed at SMB customers.

Best’s portfolio includes stand-alone applications, such as its SalesLogix CRM software, as well as its MAS 90, MAS 200 and MAS 500 back-office suites, which include capabilities for accounting, inventory management and wholesale distribution.

Accpac’s integrated, end-to-end product line includes applications for accounting, CRM, human resources, warehouse management, manufacturing and point of sale. Accpac’s products run on either the Linux or Windows operating systems, work with a variety of databases, such as Microsoft SQL Server and IBM DB2, and can be delivered as hosted services over the Internet.

“I can tell you from my perspective, [the acquisition] is intriguing primarily because of [Accpac’s] hosting option,” said Wesley Snow, president and CEO of Ascendix Technologies, a Best solution provider based in Dallas.

While Accpac and Best deliver applications with similar capabilities, such as CRM and accounting, the two companies claim to have “very little” overlap in their products or their channel. Perhaps more important for partners, the two product lines already appear to work well together, solution providers say.

Solomon, for example, said he took on Best’s products because its high-end MAS 500 system provided an easy transition for customers who had outgrown Accpac’s Advantage software for the back office.

But some solution providers question the assertion that the companies’ different products don’t cover the same territory.

“They claim there’s no overlap in the products, but there really is,” said Manny Buigas, vice president of sales and marketing at NextLevel Information Solutions, an Accpac reseller in Miami.

“It will be important for them to define early on how the two lines are distinguished so they can attract the high-end resellers,” Buigas said. “I think the smaller resellers will be on the outside, looking in with this sale. They’re worried that the lines are too large for them to support.”

Buigas touches on what could be perhaps the biggest concern among Best and Accpac partners: How will the smallest providers handle the expense of hiring and training new staff?

On the day of the announcement, for example, Buigas said he had already fielded two calls from small Accpac resellers broaching the subject of being hired by NextLevel.

“It’s an opportunity for us because our biggest challenge as business owners is finding the skills we need for growth,” Buigas said.

Added Solomon: “All of the smaller dealers are calling us,some are nervous, and some are excited. I think we will see consolidation in the dealer network now. You need size, you need a critical mass of people and knowledge for this number of products.”

Executives from Best and Accpac hope to calm any such fears within the channel. “It’s not like all 7,000 Accpac partners will pick up our products,” said Ron Verni, CEO of Best.

Added Accpac CEO David Hood: “Just as buying decisions are customer-driven, the decision to take on additional products has to be the partner’s decision. The net is they have an expanded list of products they can offer.”

Verni and Hood said they expect Accpac to operate as a separate business unit within Best. Hood’s role in the new company will be announced after the acquisition is complete.

The deal is subject to regulatory approval and is expected to close by the end of February.