MYOB has been leapfrogged by Quicken in the two-horse market share race that has been taking place in the retail sales of small business accounting software market according to channel research company Inform.
Having held the upper hand since Inform started collecting data at the beginning of 2000, June's results suggest that MYOB may have not capitalised on the golden opportunity presented to local accounting software firms by GST as well as its competitor did.
Naturally, Quicken was keen to support this line of thinking while MYOB was a little sceptical as to what such a statistic meant.
According to Phil Burnham, senior research analyst with Inform, Quicken moved from a 39.40 per cent second-tier slice of the market in May to a market-leading position, with a 51.10 per cent share, in June. On the flip side, MYOB slipped from 57.30 per cent in June to 46.30 per cent one month later.
The June figures show Quicken and MYOB hold an astounding combined total of 97.4 per cent of the market for small business financial software.
Inform's Burnham attributed MYOB's slide from the top of the ladder to "some retailers finding their shelves empty" and "fulfilment and supply issues" in general. MYOB handles its own fulfilment, whereas Quicken engages a distributor.
Burnham said June was a spike month and that its figures could change again in July. "We have only been gathering financial software data since the beginning of the year," Burnham said. "Up until now, MYOB had always been in front in small business financials products. June was the first time they changed places.
"Quicken's sustaining of that [market-leading] position is pretty dependent on supply issues," he said.
Quicken CEO Greg Wilkinson described the result it garnered from the red carpet ride small business financial software companies received in June as being "very comforting".
He attributed Quicken's leapfrogging of MYOB to the smooth execution of a thorough plan to take advantage of an obvious huge opportunity.
He said most of the sales action were newcomers strolling into retail outlets and grabbing boxes off the shelf whereas earlier in the year, customers were going to accountants for advice and MYOB had good mindshare with accountants.
"Early adopters tended to be taking advice from their accountants," Wilkinson said. "In that space, [MYOB] had the jump on us. June was a walk-in retail rush of people who had to change but had left it to the last minute."
MYOB CEO Craig Winkler was less enthusiastic about the reliability of the results, despite the fact the same research showed it to be the front-runner until June. The research, he said, is not thorough and doesn't cover all retail outlets, including several where MYOB is prominent. Heads are not rolling and there will be no knee-jerk reaction, he added.
"I am not concerned [by Inform's figures]," Winkler said. "They are a set of figures and there are lots of variables that can affect somebody's specific set of figures. To start reacting to that kind of survey is not the right way to go."
While Winkler disputed the figures, he said that even if they were true, the June figures could only be classified as a spike and his research shows they are still sitting pretty. "Nothing should be read into a spike. You can't sustain one."
Quicken's Wilkinson said a key factor in the success of its June strategy was to time its massive marketing campaign to coincide with the Federal Government's "unchain your heart" campaign. He also claimed utilising the fulfilment skills of Express Data as being crucial to its not facing any fulfilment woes.
"We would have struggled to fulfil under such extraordinary demand," he said. "We figure we are not in he distribution game. That is something best left to the experts."
Naturally, Wilkinson was happy to believe the significance of the results from Inform's channel research. "There is nothing that feels better than a well thought out plan that comes together," he said.
Winkler disagreed that its self reliance on fulfilment would have affected channel sales and said the fact that it managed so well under enormous pressures was testament to its decision to bypass distributors and deal directly with resellers.
"Getting through that period showed we can do that fairly well," he said.
Meanwhile, Winkler was also enthusiastic about upcoming opportunities for resellers amongst small business customers. "This a great time for the reseller community," he said. "June saw a huge increase in the number of businesses becoming computerised for the first time. Resellers now have an expanded marketplace to work in."