AccountMate Lowers Price for Small Biz

Despite its many advantages as a platform, the AS/400 has always been a hard sell to small business because of its steep application cost. Novato, Calif.-based AccountMate Software Corp., which bucked the green-screen trend by porting its GUI-based Visual AccountMate accounting suite to the AS/400 nearly two years ago, is now looking to break the stereotype of AS/400 applications as being overpriced.

The company is offering a special small-business version of Visual AccountMate/400, called Visual AccountMate DBL Small Business. The new product is priced to sell at just $995 per module [plus $2,495 for the System Manager], the same price as AccountMate’s PC LAN-based product. That price is about one-third the previous cost of VAM/400, for what is essentially the same product. This small business version will support up to 1 GB of data and 11 users.

“For the first time, small business can take advantage of an AS/400 product priced competitively to any PC LAN product on the market,” says Tom Cosgrove, director of marketing at AccountMate. “Technology-wise, there’s a distinct advantage to being on an AS/400 instead of a PC LAN. Now we’re allowing small business to take advantage of the high-level technology of the AS/400 at an affordable price.”

“When a small-business customer sees a $20,000 or $30,000 solution on a PC LAN compared to a $50,000 solution on an AS/400, the AS/400 becomes a tough sell,” says Bob Steps, VP of corporate development at AccountMate. “We can now offer small business customers an AS/400 or Microsoft SQL Server solution at the same price we offer the LAN solution at. They get a better database and a more secure, reliable system.”

If a business goes beyond 1 GB of data or 11 users, it moves up to Visual AccountMate DBL Mid-Sized for up to 2 GB of data and 26 users and costs $1,995 per module, $4,995 for the System Manager. The third, unlimited level is priced at $3,995 per module, $9,995 for the System Manager, the original price of Visual AccountMate/400.

“It’s fully scaleable,” says Cosgrove. “If you need to move up, the interface does not change, all the modules are identical. You can start out low and grow.”

So how is AccountMate suddenly able to offer essentially the same product as before at a much lower price? The promise of increased volume, says Cosgrove, especially in a market where price is often the only determinant in a customer’s buying decision, regardless of the technology involved.

“We’re willing to sacrifice margin up front in order to stimulate sales in small business for a higher level of technology,” says Cosgrove. “A PC LAN is fine, it does a good job, but if you want to be more productive and efficient, you have to have a more robust system. We know we could sell it at a higher price, but small business is focused on price, not on technology.

“We want to take away as many obstacles [to VAM/DBL] for small business and our business partners, so we’ve cut that out as a reason for small businesses not to move to something that’s technologically superior. And we want to make sure our business partners have all the tools they need so that small businesses don’t have any reasons not to buy [VAM/DBL].”

The new pricing scheme for Visual AccountMate has gone over well with John Purtil, president of Purtil and Co., a Cheshire, Conn.-based VAM reseller.

“If price isn’t an issue, then the reliability of the AS/400 becomes a powerful argument,” says Purtil. “Smaller companies know that downtime is a big cost factor. It’s easy to get them excited about a more reliable hardware payoff. Plus they want a one-time investment in training. Once they learn to use the system, they don’t want to retrain anyone. If the company grows, they don’t want to have to learn new procedures because they have to move up to a new system.”

Purtil says Visual AccountMate will grow with the customer so they won’t have to throw it out and move up to a more robust system.

IBM is helping support AccountMate’s new small business effort with marketing development funds in the “six figures,” according to Cosgrove.

“We’re going after the System/36 users and offering them a chance to come up to the AS/400 and take advantage of VAM/400 DBL at a very good price. And we’re targeting Model 150 and 170 shops and really any small business that needs to solve small business problems.”