Best Software CEO Eyeing Software Acquisitions

Best Software

"We are an acquisitive company and we will continue to acquire," he said in a press conference after the company launched its new Partner Advantage channel program, which puts its broad product portfolio under one channel umbrella. "The market conditions today are making it very favorable for acquisitions, especially in the vertical segments. So you can expect to see us going forward rounding out our portfolio."

Best, whose product line includes Peachtree accounting software and Act contact management software, is looking at potential acquisitions to sharpen its four-pronged vertical market attack in accounting, manufacturing, distribution and nonprofits, said Verni. "At any one time we are in discussions with a number of companies across multiple markets," said Verni. "You can expect to hear over the course of the next year a number of new acquisitions."

In September, Best acquired CPASoftware, a vendor of accounting practice solutions for CPAs, consultants, attorneys and other accounting professionals. Best is not only interested in getting CPASoftware customers to recommend the Best product line, but also wants to sell them products to help them better run their own business, said Verni.

Verni said that 40-plus percent of all technology decisions, depending on the market, are influenced by accountants. "As an influencer, we absolutely see that accountants are critical to our strategy," he said.

"What we really try to do is help the accountant become very familiar with our application, give them the tools, give them access to [the high-quality support they need so when they need a question answered they come into a special queue. We try to create a relationship so that they are comfortable when they go back to their client and recommend our products," Verni said.

Best, which has about 6,600 partners, is being "selective" in adding new ones, said Verni. "Many times it is easy to add large numbers," he said. "The relationship that we have with our channel partners and the way that we qualify them, help train them and certify them, not everyone is going to be able to participate. But we do envision growing our partner channel.

"High-quality partners do not want 10,000 other partners in their territory," Verni said. He said it takes a unique partner to understand a specific client's business needs and match up Best products with those needs.

"You need a high-quality partner who is well-trained, certified and sells enough of your product to be able to become familiar with it," he said. "If you are a system integrator or a Microsoft certified engineer, you are not going to have the business acumen to be able to match the product to the customer and then to be able to satisfy their entire experience."

While the technology spending slump has been taking its toll on partners, Verni said Best has been working hard to keep it partners "healthy" with boot camps and additional training.

As for Microsoft's recent move to aggressively enter the midmarket software segment, Verni pointed out that Best's 1.6 million user installed base dwarfs Microsoft's in the midmarket.

In the low-end accounting market, Peachtree and Intuit own "almost 99 percent of all the new units sold into the market," Verni said. "On the very low end, in order for them [Microsoft to gain traction they need to be able to count the customers in the hundreds of thousands, not in the ones of thousands."

In the midmarket, Verni noted that 95 percent of all companies already have an accounting solution. "So it is becoming very much a replacement market," he said. "And where they are growing they are either coming from the [Intuit QuickBooks space or the Peachtree space."

Best, which added 47,000 customers in the first half of this year, has focused on those Peachtree customers that are growing and need a midmarket solution, said Verni. In the first half of this year, 31 percent of Best's midmarket accounting solutions were upgrades from Peachtree software, up from only 8 percent two years ago, said Verni. "So where we believe growth will come from is taking our large Peachtree base and keeping it within our family," he said. "What is interesting is Intuit has also announced they are going to try to take their customers up to a different level."

If Best and Intuit each do their job migrating customers, they will take "the oxygen out of the room for new customer growth for most of the companies in the midmarket," said Verni.