Accounting software firm Peachtree Software Inc is buying Mica Accounting Software Inc to bridge a gap it perceives in the market by dramatically slashing the price of Mica’s software in a move which sees history repeating itself. Nearly ten years ago Peachtree, an Automated Data Processing Inc subsidiary, slashed the price of its flagship product to less than $200 from $5,000 overnight. It went from selling a few larger systems, to its current position of having more than 600,000 active users. The company’s main customers are small businesses with typically between five and 100 employees, and it says there is a huge gap in the market for companies that want more sophisticated accounting features and a system to handle fast, heads-down data entry with high transaction levels, but which cannot justify spending $10,000 on an accounts package. Mica’s software was designed for small to medium businesses and currently sells for between $6,000 and $8,000. Peachtree will re-package it as Peachtree 2000, retaining all the existing features, and sell it for less than $2,000. As well as attracting new small to medium customers, Peachtree says Peachtree 2000 will give existing users of its MS DOS-based flagship product an easy migration path. The Peachtree and Mica products are particularly compatible, it seems, because many of Peachtree’s customers that needed a more feature-rich and robust accounting package left Peachtree and went to Mica. Over time, Mica then responded to the demands of these customers by adding Peachtree features to its product. For many of these customers it will be like coming home, a Peachtree spokesperson said. Peachtree says it has all the necessary infrastructure in place to cope with increasing volumes in Mica sales, including its Peachtree support centers. It will continue to support existing Mica customers, but will offer them a simple, low cost upgrade path when they need it. Peachtree 2000 is a 16-bit Windows product running on Windows 95, NT and 3.x. Current Peachtree customers can upgrade for $1,000 for a single user version or $1,500 for four users. The software is currently available only in the US, but the company says it is actively working on expanding into Europe, and has not ruled out the possibility of acquisitions. Terms and conditions of the acquisition of Fort Arthur, Texas-based Mica were not disclosed.
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