When Accounting Software Firms Merge

The Wall Street Journal had an interesting article about how expected synergies are not always achieved when accounting software firms merge. The authors use Oracle and Peoplesoft as an example of a situation where promised benefits have yet to emerge.

I'm surprised the authors ignored Microsoft. Maybe it's because Microsoft is actually slowly gaining the synergies of its accounting software portfolio. In successive versions of Microsoft Dynamics NAV (Navision) and GP (Great Plains), the two packages I know well, Microsoft has moved the user interface closer and closer. Behind the scenes, they are acutely aware of the strengths and weaknesses of their packages and work with the partner channel to achieve the best fit between software and client. This isn't official, but my own view is that when Microsoft eventually releases one new package to replace all the former ones, it will LOOK like the user interface that people will have come to expect from Microsoft. But the programming will be 100% new. Personally, I don't believe that you can actually merge the programming code of two different packages. You have to build a new product from the ground up that takes advantage of the logic and features of its predecessors and the experience of the development teams.

Microsoft is rarely the first to market with software, but when they arrive, look out!