When the announcement came over the wires that Norwegian business software specialist Mamut was the buyer of the UK operations of MYOB, the name might have been unfamiliar to a few people in the channel.
Among those channel players which actively sell business management software
to SMEs, the number of those in the dark over the identity of Mamut would have been minimal because the UK team at the accounting software specialist had already spent a good couple of years spreading the message. Others in and beyond that part of the software industry, however, might have been tempted to file the Nordic vendor’s acquisition under the broad category of “quirky”.
But that would be a mistake, not only failing to give Mamut and its ambitions in the UK the respect they deserve, but also failing to understand the changing landscape of the small business software market.
A time of change
One of those in a good position to talk about changing times is Alan Moody, UK country manager at Mamut. Working for a company that focuses only on small businesses he is in a prime position to muse not just on the future direction and demands of customers, but also the characteristics that will be required of resellers that want to succeed.
Tackling the reseller issues first, Moody has been working hard to establish a reputation with the channel that puts the emphasis on value-add, because that is where both vendor and dealer can make the money and develop lasting customer relationships.
“We do not just work with the Joe Bloggs who pick up the phone and tell us they want to sell Mamut; we want to work with people who have credibility in the local business community,” he says.
Of course, that credibility is even more important in times like the present, with the credit crunch a major topic of conversation. But there has to be a point to a sales pitch aimed at persuading customers to adopt a different package of CRM, accounting and e-commerce tools.
“Who just wants to offer a similar product? There has to be added service, helping the business advance. It is not just about trying to get people to move from product A to product B,” Moody says.
“There is more of a focus [by customers] on asking if a product is needed and people will buy for business efficiency and to help rationalisation, rather than for growth. The rationale might have changed, but the benefits will be the same.”
Waning power of accountants
The other factor that is going to have a big impact on the channel is the decrease in power of the accountant. One of the traditional sets of influencers on the small business buyer, along with lawyers, were the accountants, but they are no longer the force they once were. “The influence of the accountant is sliding and that will continue. It has already been experienced in Norway,” he says.
That is partly because of the reduction in staffing levels, but also because the information that was once the domain of just a select few in a specialist department is now in wider circulation and, as a result of technology, more dynamically used.
Those rival companies that built their market share strategies on primarily converting the accountancy trade could find things harder in the future. “There is complete evolution of the accounting profession and it will change over the next three to four years,” Moody says.
Charting a course through those changes and growing market share is the challenge Moody faces. As things stand, the UK arm of Mamut is offering around a third of the revenues going into the Norwegian headquarters, but the expectation is that the significant opportunities the British market offers will change that situation.
“We should be looking at being number one in terms of revenues in the next two to three years,” Moody says.
Drivers for growth
One of the drivers for growth will not just be taking share from rivals but, via the channel, breaking through to the large numbers of small businesses that still find dealing with the financial side of their operation a struggle, having failed to take advantage of the technology available.
Moody is convinced that along with providing products that are designed to make processes such as accounting and customer relationship management simple and easy to manage, there is also work it can carry out to get its brand known among the small business market.
“We have to continue to better understand the small business community because it is our lifeline,” he says.
Moody adds that Mamut, which was viewed with a cynical eye by some resellers when it entered the UK market, is here for the long term and is not going to make the mistakes of some other foreign entrants that crashed and burned having set out to change the world.
“We have seen some people that have tried to do things too quickly and gone out of business and make mistakes, but we are taking the long-term view,” he says.