Upgrade to flagship software flops, introduces “hidden” price hike.
Fund manager Bain Capital is fending off a revolt from thousands of MYOB users across Australia after it released an updated version of its popular accounting tool that is ridden with bugs.
The venture capitalists bought the software for $1.2 billion just two months ago from Archer Capital and HarbourVest Partners LLC at around 11.3 times earnings before interest, tax, depreciation and amortisation, nearly three times the price Archer and HarbourVest paid in 2008.
AccountRight, the most popular accounting software in Australia according to MYOB, was updated to a 2011 version in late November and immediately came under heavy criticism from accountants and users on the company’s online community forums.
Irate users claimed the software was extremely slow, swamped memory resources and was unable to import cleanly customer data and customised cheques and invoices.
“I just cannot believe that MYOB has released this update! It feels like an early beta version. I have been using MYOB for 12 years+ and never had a serious problem with an update until now,” wrote user David C. “It is slow, so slow; every time you click on something, there is a long delay with most actions taking 4-10 seconds to load, yes I sit there counting the seconds!!!! It is completely unusable. Plenty of bugs as well.”
Performance issues had affected 10 percent of users and were largely due to teething problems as MYOB shifted its software to a new technology platform, Microsoft .NET and SQL database, said Julian Smith, general manager for corporate affairs, MYOB Australia and New Zealand.
The transition was part of a plan to expand the company’s cloud software products, due to be launched next year, he said.
“This particular product is the first in a range of R&D commercialisation around our next-generation cloud products,” Smith said. Smith claimed that several thousand clients had upgraded in the last couple of weeks and “the vast majority are having a great experience”.
“A small number have raised issues via a number of our support channels. To be honest that’s not unexpected when we make a substantive technology change that we will see some clients having issues.”
The 2011 version included for the first time a SQL database which ran configuration and optimisation processes during installation, Smith said. “The product database will optimise itself based on local operating conditions. What we’ve learnt is managing client expectations that it’s going to take a few reboots of the system to optimise the database. It gets better as you reboot your system a couple of times.”
MYOB had planned to release a service pack next week which would address a range of minor issues which had affected 15 percent of customers, Smith said.
Users paying for additional service MYOB Cover that included automatic software updates and phone support claimed that MYOB’s support staff were unable to help.
“I buy cover and support from MYOB so that they can provide me with a working product and not one that is full of bugs,” wrote Don Grgic of Furniture Direct in the MYOB community forum. “It just does not work smoothly and its as slow as a dog. I use a lot of different products in my day to day operations and the flakiest I have, now is nowhere as bad as this new 2011.1 version.
“Management at MYOB… what were you thinking in pushing this out of the door… or were you influenced by sales and the new fad of just ship it and fix it later?”
Software vendors which integrate with AccountRight have recommended their customers avoid upgrading to the 2011 version because the supplied software drivers which it used to communicate with MYOB’s software were faulty.
“We recommend that you do not upgrade to MYOB AccountRight 2011 at this time. We will post a notification to this site when it is ok to do so,” wrote job management software vendor SimPRO wrote in its company blo on December 2.
“The ODBC* files released by MYOB for us to work with contain numerous bugs and at this stage we are unable to nominate a time when we can release a simPRO Accounting Link update that will work with MYOB AccountRight 2011.”
Hidden price hike
The update included a change to the licensing terms for the software, effectively hiking up the price for companies with multiple entities or divisions.
A three-sentence entry on the fourth page of an information update for MYOB partners noted that AccountRight 2011 Standard and AccountRight 2011 Plus included one data file for new purchases instead of the usual five.
MYOB’s Smith confirmed that the 2011 software only came with one data file but added that existing MYOB customers with multiple data files could still upgrade under one licence.
“The number of data files only impacts new clients,” Smith said. “The vast majority of our clients only use one data file.”
Customers could contact MYOB and buy additional licences for $40 for AccountRight Standard and AccountRight Plus which included payroll.
Trevor Schoenmaekers, a partner at Victorian accounting firm Hansens, said the change in licensing was “a massive issue”. A former member of MYOB’s client advisory panel, Schoenmaekers said companies used MYOB’s five data files to set up company files for separate divisions or entities such as a trust under a single licence and monthly maintenance fee.
“Xero will be all over this,” Schoenmaekers, who had moved many of his customers from MYOB to Xero, said. “That’s one big thing we have with clients. They say they don’t want to have three subscriptions (with Xero) because they have three entities.”
Xero announced it had reached 50,000 micro and small business customers in September and was readying plans to take on the US market. Saasu, which focused on larger SME companies, claimed that 10 percent of Australian accountants were using its software and that it had passed the 20,000-customer mark.
“We are getting a lot of feedback that (MYOB) are stumbling with the latest version of AccountRight,” said Chris Ridd, Australian Xero’s managing director. “Next year when we release payroll Xero is going to be on par and a product that can really take them on. We’re now a sizeable operation and we think we’re ready to go to a whole new level in the market in 2012.”