The ACCC has outlined preliminary competition concerns that MYOB’s proposed acquisition of GreatSoft could substantially lessen competition in the accounting software market.
MYOB and GreatSoft both supply practice management software to medium-to-large accounting firms.
“We are concerned that if MYOB acquired GreatSoft, there would only be three major suppliers of practice management software to medium-to-large accounting firms,” ACCC Commissioner Stephen Ridgeway said.
“GreatSoft is a new entrant that has won several medium-to-large MYOB customers, and we are looking into its potential to grow stronger.”
“We received feedback that accountants now have a strong preference to move from traditional desktop-based software, like MYOB’s, to online ‘cloud’ software. While GreatSoft’s customer base is currently small, the ACCC is investigating its potential to become a strong competitor as it appears to be a viable choice for many medium-to-large firms wishing to migrate to the cloud,” Mr Ridgeway said.
Other competitors in the industry include Reckon APS, a desktop-based provider, and Xero Practice Manager, which despite being designed for smaller firms, has attracted a number of medium-to-large customers to its cloud-based product. While there are alternative products available, the ACCC was informed they have generally been adopted by limited numbers of medium-to-large accounting firms.
“Medium-to-large accounting firms require more sophisticated features from practice software than smaller firms, as a result of their more complex business structures and processes,” Mr Ridgeway said.
“It appears difficult for new competitors to enter this market. Software suppliers have to invest significant time and resources to develop functionality to meet the needs of larger accounting firms, and require a proven track record in order to convince accounting firms to switch software.”
“While GreatSoft itself faced some of these challenges, we consider that as it has operated in Australia for the past two years, it may now be well placed to overcome them.”
The ACCC invites submissions from interested parties in response to the Statement of Issues by 5 March 2021. The ACCC’s final decision is scheduled for 22 April 2021.
The Statement of Issues is available on the ACCC’s public register.
MYOB is a privately held company that provides software solutions to businesses and accounting practices in Australia and New Zealand. For accountants, it supplies desktop-based products which are MYOB AccountantsOffice (AO) for small firms, and MYOB AE for medium-to-large firms. These products include a practice management module, in addition to document management, tax, accounting and compliance modules.
GreatSoft is owned by GreatSoft Proprietary Limited, a South African company. It was established in Australia in 2018, although it did not officially launch until September 2019. GreatSoft only supplies a cloud-based practice management module, and integrates with a range of third party software suppliers for other accounting modules, including Xero for Xero Tax.
Practice management software is considered to be the ‘backbone’ of the broad range of software modules used by accountants, and holds client details, manages resource planning and workflow.
Medium-to-large firms refer to accounting firms with more than 26 employees but do not include the largest global and Australian firms who generally use enterprise resource planning products that require bespoke design and development.
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