30.1.07

Accounting on the free'n'easy

by BRAD HOWARTH
Date: 30/01/2007
Source: AGE
Publication: The Age Section: Computers Page: 9


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Software developer NETapplica has found a novel way of recruiting new users for its accounting application - giving it away free.

NETapplica has developed NETaccounts, an accounting package that is hosted on the internet and used by clients through a web browser.


Chief executive Marc Lehmann says NETaccounts has the functions to compete with market leaders such as MYOB but the free giveaway is designed to attract micro-businesses and start-ups.

Users can make up to 10 free transactions each month. Higher usage attracts a monthly subscription fee starting at $15, or users can chose to upgrade to an e-commerce version with a connection to an electronic payment gateway and automated invoicing.

"If they are doing more than 10 invoices a month they probably don't mind paying for it as well," Mr Lehmann says.

NETapplica is one of several Australian software developers that are using the on-demand computing model (also called software-as-a-service) to sell and manage its applications. Having the software available on the web eliminates the need for traditional packaged software distribution and allows the developer to centralise its support.

The model has been popularised by American developers such as Salesforce.com and NetSuite. According to analyst company Gartner, by 2011 25 per cent of new business software will be delivered as a service on demand.

Mr Lehmann says the on-demand model is a key factor in NETapplica being able to keep its costs low, with the company currently operating with a team of five.
"We can do things a lot more quickly and effectively to build a product like ours with a small team."

It is a strategy that has also been successfully pursued by Sydney-based developer MassMedia Studios for its product Traction, which helps companies manage their online communication with consumers.

MassMedia's sales and marketing manager Leon Young says the minimal resources required to support on-demand software has improved Traction's popularity, particularly in Britain, where its clients include the fast-moving consumer goods companies Unilever and Cadbury-Schweppes. The hosted model has also been pursued by Queensland-based developer osCommRes for its open-source reservations software.

Many of the on-demand applications available today are linked to a Salesforce.com initiative called the AppExchange. This is an online marketplace of on-demand applications that tie into Salesforce.com's core customer relationship management application.

The Sydney-based marketing services company Sqware Peg has released an SMS messaging service based on the AppExchange model, and is developing a second application for event management. NETapplica is also working to integrate NETaccounts into the AppExchange.

Mr Lehmann says he began developing the idea for NETaccounts in 1998, when he used the share portfolio management tools of the Yahoo Finance service.
"I remember thinking this would have been superb if I could have used it to manage my own finances. So I thought this was the way things were going to go for everything."

Being web-based means Mr Lehmann can further reduce the cost of the software for users by letting them chose to receive advertisements through the NETaccounts web interface - as do applications such as Yahoo!Mail.

"You've got to leave this stuff up to the consumer. There is a set of consumers who would like the advertising and are happy to pay less to see the advertising, so if we can facilitate that, we will."

The first version of NETaccounts was released in April 2000 as a basic accounting product, with the early years spent focused on making it suitable for accountants and larger clients. In May the company will launch a premier-level version of its product, including multi-currency capabilities.

"Typically the markets develop for the big end of town first, knowing that the general consumer was going to come in later in the cycle. We took the approach that as the others would be competing at the upper level, so we would go for the bottom end."

Today NETaccounts has 700 active customers, and Mr Lehmann says that figure is growing by about 70 per cent annually. The free giveaway represents the company's first foray into mass marketing.


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