Cloud accounting's pioneers: Where are they now?

A look back to the companies who were documented by Nigel Harris in his 2000 article An introduction to accounting's application service providers highlights names that have grown into major players and some that have drifted away over Cloud computing's forgotten horizon.

To remind readers of the online accounting industry's roots, this article presents brief summaries of what happened to the early pioneers.

Easycounting
Originally launched in October 2000, Easycounting was hailed as the first truly web-based accounting system in the UK. It's still around, but having passed through several ownership transitions, but is now operated as a backroom client service system by accountancy consolidator Vantis. Vantis partner Richard Messik has accompanied the system along the way and ironically ended up advising the Danish developer e-conomic on how to break into the UK market. Where Easycounting remains true to the original idea of an idiot-proof system for clients to enter data to the firm's accounts production system, e-conomic is a more sophisticated option that includes the nominal ledgers, trial balances and report-producing software accountants demand, he said. With little enthusiasm to push the product any further, Easycounting marketing director, Neil Chadwick, went out on his own and helped to develop another second generation online system, Liberty Accounts.

KashFlow
In spite of boasting a former Tory cabinet minister as its chairman, Essex-based KashFlow presents itself as the punk rock challenger to finance software's prog dinosaurs. Founder Duane Jackson started the company with backing from The Prince's Trust and before long Lord Young came on board. As well as keeping customers happy by responding rapidly to their wishlist requests, Jackson has energetically embraced social networks to promote the service online, most notably on UK Business Forums. Designed for small business users, KashFlow is offered free for the first 60 days and then costs £149 for the first year and £99 for each subsequent year.

Marginz
One of several companies to come into the market in the aftermath of the dotcom boom, Marginz was initially designed as a simple online bookkeeping system for small businesses. As more new systems have appeared, Marginz has evolved to style itself as "the only UK and European realtime online accounting system for the accountancy service sector". However, many of its marketing claims have been challenged by rivals and analysts and the people behind Marginz can be hard to pin down.

Founded in 1998, NetSuite was backed set up with backing by Oracle CEO Larry Ellison. Having started out as NetLedger, the company moved on to create an online suite that could handle all of the key finance functions as well as an organisation's sales, marketing, CRM and HR functions. (Ellison, meanwhile, hedged his bets by putting cash into Salesforce.com, which took a more specialist approach to CRM in the Cloud. NetSuite was also an early proponent of the role-based user dashboard approach that has since been been adopted by both on premise and on demand business software houses. Now listed on Naasdaq, NetSuite has struggled to achieve profitablility and a consistent share price, but trumped Salesforce.com by winning 2008 Software Satisfaction Awards in two of the CRM categories.

Online<>50
By getting Sage's permission to licence and deliver Line 50 via the net in 2003, managed services house IT Inside Out's Online<>50 service brought credibility to the idea of online accounting software. In spite of an occasionally prickly relationship with Sage, which always finds it hard to see other organisations making money that it could be earning, Online<>50 is still around, serving a network of 100 or so accountancy firms who resell the service to their clients.

Sage
It may not be the first place you would look for the cutting edge of Cloud computing, but Sage was an early mover with a web-based version of its US accounting application Peachtree that was introduced for $9.99 a month in April 2000. ePeachtree remains a player in north American, but following Online<>50's success, it took Sage until 2007 to introduce a web-based edition of its UK flagship Sage 50, known catchily as Sage 50 Accounts Professional Online 2007. The service is available to Sage Accountants Club members (annual subscription £350) with prices starting from £900 a year for a three-user 12-month contract. Twinfield's David Terrar unkindly dismissed it as "Same old Software, as a Service". The Newcastle-based giant may seek revenge during 2009 when it launches Sage Live Cash, a completely new online offering designed for small businesses and start-ups.

Twinfield
Twinfield was created by Coda employees who left the company (then part of Netherlands-based Baan) in October 2000 to create an online accounting solution based around Coda Financials. Due to a variety of technical and cultural differences, the Dutch took to the hosted software model much more quickly than the British and Twinfield rapidly rose to become the online accounting market leader. The company opened a UK office in 2005 and now claims to have 22,000 users in 22 countries. According to Gartner, the company is now planning to move up from its SME roots to grow its share in the mid-market.

WinWeb
Another member of the class of 2005, WinWeb did a lot to break the concept of software as a service in the UK, thanks in part to the energetic blogging of WinWeb founder Stefan Topfer. Like many of the early internet accounting pioneers, Winweb sees accountants as a key route to small businesses and offers firms an AccountsOffice system that gives them secure access to their clients accounts. It also offers a range of marketing and support benefits available to bronze, silver and gold partner firms. While its profile has not kept pace with some of the newer entrants, that may change with news of a recent marketing deal with Office Depot, which will market WinWeb's OnlineOffice system to UK customers via Viking Direct.

They also served...
Gartner recently pronounced that the internet accounting market was maturing and as part of that process a lot of early experiments fell by the wayside. Let us know if you have any news of what happened to these and any other pioneers who are no more:
eLedger.com
TheAccountsOffice.co.uk