Cashing in on the U.S. Small Business Accounting Market: Intuit and Microsoft Go Head to Head; Microsoft Angles for Share in Strategic Small Business Accounting Market; Market Growing at 5.2%

Business Wire, March 13, 2006

NEW YORK -- A new AMI-Partners report, Cashing in on the U.S. Small Business Accounting Market, takes an in-depth look at how Microsoft Small Business Accounting will affect the U.S. small business accounting market--long dominated by Intuit's QuickBooks product line. The report details current adoption, trends and brand preferences in the U.S. small business accounting market, and provides a comprehensive analysis of Intuit and Microsoft's small business accounting strategy, offerings, marketing and channel initiatives.

Although the U.S. small business accounting market is a relatively mature one, it offers vendors room for growth. A surprising number of existing small businesses have yet to deploy accounting software, and small businesses typically update or change their accounting software every one to three years. Consequently, AMI-Partners forecasts that U.S. small businesses' spending on accounting software will grow by more than 5% CAGR through 2009. Intuit has long been the undisputed leader in the small business accounting space with its QuickBooks product line, relegating rivals to second-tier status. However, this past fall, Microsoft re-entered the game with Small Business Accounting. With its significant resources, and SBA-Office integration, Microsoft intends to lure small business accounting buyers to SBA. Some of the key battlegrounds in which the two vendors will compete head-to-head include:

--First time accounting software users, most heavily concentrated in the 1 to 4-employee segment, in which more than one-quarter of firms still use basic checkbook accounting and manual processes

--The one third of small businesses that upgrade or change their accounting solution annually

--The 550,000 new small businesses created in the U.S. each year

Accounting--A Pivotal Software Choice for Small Businesses

"Accounting software is the first strategic business application that many small firms purchase, making it an important on-ramp for other business applications, which need to integrate with the accounting solution, and a first step towards higher end financial solutions," said Laurie McCabe, author of the report, and AMI-Partners' Vice President for SMB Insights & Solutions. "Intuit has long been the undisputed leader in the small business accounting space with its QuickBooks product line. But Microsoft, which has a solid base in the mid-market financials arena, wants to build volume in the small business accounting market."

About the Study

The study analyzes whether Microsoft will be able to lure small business accounting buyers away from QuickBooks and towards SBA, or if Intuit will ward off this latest threat from Redmond, as it has done successfully in the past. The report examines:

--Current adoption, plans, trends and brand preferences for accounting solutions in the U.S. small business market, based on AMI 2005-2006 U.S. Small Business survey data;

--Comprehensive synopses of Intuit's and Microsoft's small business accounting and related products and services, marketing strategies and channel programs;

--Analysis of each vendor's strengths and weaknesses in the small business accounting space; and

--Short and long-term perspectives about the impact of Microsoft's entrance into the market.

For more information about this study, AMI-Partners, or our global SMB research, please call AMI-Partners at 212-944-5100, e-mail ask_ami@ami-partners.com, or visit the AMI Web site at www.ami-partners.com.

About AMI-Partners

AMI-Partners specializes in IT, Internet, telecommunications and business services strategy, venture capital, and actionable market intelligence -- focusing on global small and medium business (SMB) enterprises. The AMI-Partners mission is to empower clients for success with the highest quality data, business planning and "go-to-market" solutions. AMI was founded in 1996 under the name of Access Media International (USA), Inc. by Andy Bose, formerly group vice president at IDC. Since its inception, the firm has built a world-class management team, each with ten to fifteen years' experience in IT, telecom, online communications or multimedia.

AMI-Partners has helped shape the go-to-market SMB strategies of more than 150 leading IT, Internet, telecommunications and business services companies over the last ten years. The firm is well known for its IT and Internet adoption-based segmentation of the SMB markets; its annual retainership services based on global SMB tracking surveys in more than 20 countries; and its proprietary database of SMBs and SMB channel partners in the Americas, Europe and Asia-Pacific. The firm invests significantly in collecting survey-based information from several thousand SMBs annually, and is considered the premier source for global SMB trends and analysis.