Microsoft counting on bookkeeping software push

Microsoft is revamping its bookkeeping software for small businesses with expanded features and a lower price in an effort to better compete with entrenched rivals.

Microsoft said it has shipped Small Business Manager 7.0, which adds sales, payroll, purchasing and inventory tracking capabilities to the set of accounting applications it released about a year ago.

The software giant has also knocked off about $500 from the product's US price per user. When Microsoft released Small Business Manager last year, it set a price of $1,500 per user. Small Business Manager 7.0 costs $995 per user. The payroll application costs an additional $500. Microsoft lowered the price earlier this year.

Small Business Manager was developed out of Microsoft Business Solutions, a unit the company formed from the acquisitions of Great Plains and Navision, which make applications for midsized businesses. Small Business Manager's target audience is at the lower end of the market - US companies with fewer than 25 employees and less than $5m in revenue.

In that market, Microsoft faces competition from two major rivals - Intuit, maker of the popular QuickBooks applications, at the low end of the market, and Best Software's Peachtree accounting package at the higher end.

With lower prices and added features, Microsoft may be looking for a firmer foothold in the market. QuickBooks costs $100 to $380, and Peachtree starts at $99.

But competitors say the software behemoth hasn't been much of a threat.

Ron Verni, CEO of Best, said: "Intuit and Peachtree control 95 per cent of all new units sold. That's all the oxygen in the room."

Alorie Gilbert writes for News.com