The extension of the tax filing season from April 15 to July 15 produced 15-percent drop in Intuit’s consumer tax revenue for the third quarter ended April 30. That countered growth in its small business operations such as QuickBooks to cut into the bottom line and produced an 8.3-percent drop in revenue. 

Intuit this week reported net income of $1.1 million in the most recently ended period, down 21.5 percent from $1.1 million. Revenue fell to slightly more than $3 billion, a decline of 8.3 percent from $3.27 billion in last year’s corresponding period. Consumer tax revenue fell to $1.83 billion, a decline of 15 percent from $2.15 billion. Tax software companies expect much of the last revenue will shift to the next quarter. Revenue for the Small Business and Self-Employed group rose to $982 million,  an increase of 10.7 percent from last year’s $887 million. However, that segment was not immune as the payroll business suffered after mid-March. During the first half of the quarter, payroll was up 30 percent but it was flat for the second half and while the number of workers paid through Intuit systems was up 20 percent in the first half, it was down 10 percent in the second.

The challenges brought by the COVID-19 virus and business shutdowns and remote operations has put a focus on payment terms. While there is no consistent report from financial software vendors, formal and informal changes to payments are being offered by many to help cash-strapped customers.

The most visible program is discussed on  Epicor Software's home page under the heading: "Competitive Through New Financing Solutions". Those are not spelled out other than to say deferred and extended payment options are available through Epicor’s financing partners and customers are urged to contact their account representatives. Acumatica has some formal programs such as "moving from annual payment to monthly to help manage cashflow, that some customers are picking up in response to the COVID outbreak,” CEO Jon Roskill said this week. There is also work with customers one-on-one with approaches such as extended terms and price breaks  to help keep  “the business running in the Cloud until they are ready to re-emerge,” he continued. There is also work with customers one-on-one with approaches such as extended terms and price breaks  to help keep “the business running in the Cloud until they are ready to re-emerge,” he continued. During an interview for the compilation of Bob Scott’s Top 100 VARs, David Faye, owner of Faye Business Systems Group, noted a SugarCRM client with 500 licenses asked if it could pay half its bill now and then half later. “Sugar is allowing the customer not to pay it all when it’s due,” says Faye, who said both SugarCRM and Sage had been flexible. Sage did not spell out specific terms during this month’s webcast for results for the first half ended March 31. But CEO Steve Hare noted it is “talking to customers where they have difficulties or where they've contacted us to say that they want to cancel. And we are offering support through short-term payment holidays and other means of supporting them.” Blackbaud somewhat ducked the question from an analyst this month during its webcast for earnings for the first quarter ended March 31. CFO Tony Boor phrased the approach as moving customers from one-year contracts to three-years with a discount built in. Boor pictured business as doing well. “Our retention rates have actually been better than we expected, pre and post. And so it's interesting, right now, renewal rates are doing very well, even compared to plan,” he said.

It may sound obvious that QuickBooks desktop revenue declined for the third quarter ended April 30. That was the result of what Intuit said was a sharp decline in unit sales through retail and direct channels since mid-March.

But until COVDID-19,  the desktop numbers have been up modestly every quarter since the first quarter of FY 2019, which was below the prior year, and desktop FY 2019 totals increased by 2.2 percent over FY 2018. These improvements have been attributed to QuickBooks Enterprise Solutions and that was still up in “mid-single digits” for the most recently ended period, CFO Michelle Clatterbuck said during this week’s earnings webcast. But this time, QBES sales could not overcome the decline in other desktop products. The result was $173 million in desktop sales  was down 4.6 percent from $181 million a year earlier. Not surprisingly, online QB sales continued to rise sharply to $353 million, an increase of 35.8 percent from $260 million in last year’s corresponding period. Intuit no longer reports unit sales or number of subscribers so its figures can no longer be compared to rival Xero, whose $437 million in revenue for the year ended March 31 was up 30 percent from fiscal 2019.  Moreover, Intuit’s increase of $93 million in online subscription revenue for one quarter compared with Xero’s roughly $101 million rise in revenue for its fiscal year.

Sage has postponed price increases for Sage 100 and 300 until September 30, the end of its fiscal year. The changes had originally been scheduled for March 1.

However, because of the coronavirus, the software company first extended them to July 1. It’s not the only delayed pricing action in the business. Microsoft had planned 10-percent cuts on margins for Dynamics GP and SL for May 1. Meanwhile, on the conference watch, the Sage Summit web site still shows the postponed event is planned for December 9 through 11 in Atlanta and partner day on December 8. Oracle NetSuite continues to show the postponed SuiteWorld conference for August 10 through 13 but I highly doubt this will go ahead or if it does, attendance will be a bit sparse.

Ah summer. Who isn’t looking forward to the sounds of empty baseball stadiums, empty car racetrack stands, empty summer camps and empty summer schools?  It’s going to be a good year for people who like peace and quiet.

Today,  Friday May 22, is National Solitaire Game as celebrated by Microsoft. It seems fitting. It's also Solitaire Month, Solitaire Summer and possibly Solitaire Year.  ...Until the shutdowns ease, Las Vegas has been considering changing its slogan to "What happens in Vegas isn't all that interestingl."… I am sure there is a hidden demand the current environment new cleaning product for removing cobwebs off home exercise equipment for people stranded in their abodes. … Kim Kardashian’s company is making fabric face masks but it’s her fabric butt masks that are generating interest.. Certainly, she is one celebrity for whom better exposure might be less exposure. … Tesla inventor Elon Musk has threatened to pull his factory out of California unless it is allowed to reopen. Musk has been making Apple founder Steve Jobs seem like a warm, fuzzy guy. California responded by threatening to send Musk into space to drive car he previously sent there… The escort business and related services have been hard hit. The work at home part is easy and masks are a hit with certain clienteles. But the social distancing thing has been a challenge. … In a public service announcement, Zorro TV episodes  and movies are being retrofitted so the crime fighter’s mask covers not just the area around his eyes but his nose and mouth as well. The sessions end with “Who was that mask man?” “I couldn’t tell. He looks like everyone else.” 

I think instructions on the 5-pack of masks being sold at 7-11 were not written by a native English speaker. The first step in  the instructions of how to wear them is “Crap one pcs.” That’s doesn’t sound sanitary to me.

… Brett Farve has agreed to return $1.1 million he was paid by the Mississippi welfare department that he was paid for speaking engagements at  which he did not appear. I don’t know if this will end chances for an over/under a plea deal. Actually, investigators missed the fact he actually attended many of them and nobody noticed, demonstrating the high degree of skill he acquired in football in executing fakes. … The Trix Rabbit was starting to show his age. So leaders at General Mills decided they need something to sharpen his mind. It was recommended that he receive training involving his skills of perception. So the Rabbit was taken to a  training school for young dogs. His task was to look at pictures of the dogs and he would be told their names. After 10 minutes, he was shown the pictures again and asked to Identify each mutt. Try as he could, no matter how many times he practiced, he could not remember the names of the individual canines. It just goes to show: You can’t teach an old Trix new dogs.  … I was surprised to learn that so many New Yorker fans of the world’s most famous cellist. You can hear that in the kids expression when they come home and yell, “Yo, Ma.”

There must be someone waiting to cash in by developing a software that can be connected to conferencing applications that will automatically cancel out the sound of crying babies and barking dogs.

… It’s not clear how many people are following President Trump’s advice to inject Lysol to fight the coronavirus. One neighbor who tested positive for the virus said thecleaning chemical was sold out at the supermarket so he bought Pinesol instead. It hasn’t made him feel better but he has a fresh smell of the north woods about him. On the other side, Democratic presidential candidate Joe Biden remember his childhood and days of “the Bionic Plague” and wondered if anyone remembered he had been vice president under Barack Obama. He also decried those who denounced Lysol who he called “one of the greatest heroes of Greek mythology.” ...  Disney has reported tragic consequences among its characters. Tinkerbell failed to make it despite thousands of people clapping over Zoom. Meanwhile, Sleeping Beauty remains asleep as a six-foot barrier has been erected around her and the Prince was unable to give her a kiss. Meanwhile, it was reported that Dopey bludgeoned Sleepy with a hammer after the Seven Dwarves were quarantined in a mine. “ They just wouldn’t stop singing ‘Heigh Ho”, I couldn’t take it anymore,” the youngest member of the dwarf family said as he was led away in cuffs. … Many are concerned about Brian Harrison, the former dog groomer, who has been named to head the federal response to the coronavirus. There is a great fear that he is planning to take punitive action against cat people and that he will fight to change the national anthem to "Who Let the Dogs Out?"

Remember when social distancing meant you didn’t wash or use deodorant for a few days? … It’s gotten so bad with the coronavirus that I when I try to talk with Alexa, she responds “Stay six feet away from me.”

… People are staying off the streets both with cars and with walking in any numbers. That means must think of the poor personal injury attorneys who are suffering because of the lack of fall downs and car accidents. … Donald Trump’s advice on use of unproved anti-malarial drugs to treat COVID-19 reminds me of an unshown episode of Star Trek where Trump, playing in a guest spot as Bones,  says: “Damn it, Jim. I’m a doctor, not a president. Uh, oh, I’m a president not a doctor. No, I’m a president and a doctor? How about not a president or a doctor?” … Stay at home-orders have changed what we brag about. It used to be we talked about new cars, clothing and houses when we wanted to talk about accomplishments. Now, we boast about house we found 20-roll pack of toilet paper or a six-pack of paper towels at the supermarket. ..The shortage of toilet paper could give new life to struggling Sears: it could resume manufacturing catalogs.

A majority companies submitting forms for this year’s Top 100 selection have more than 50 percent of their revenue coming from cloud products. That was 62 percent of the 93 firms that answered the question. (All provided revenue and employees)

 This group includes all submissions, whether the VAR was selected as a member of the Top 100 or not. Nearly 10 percent reported their revenue was 100 percent from the cloud. This is a very rough survey—there is lots of room of interpretation about what cloud means and some firms talked only of new sales. But it gives an indication of how strong the penetration has become. Twenty-nine percent said cloud ERP represent 80 percent or more of the total. Only one firm answered the question with zero percent. There was interpretation required as some gave one percentage for new sales and another for total so some back-of-the envelope averaging was performed. 

Submissions have closed for Bob Scott's. Top 100 VARs for 2020. To say it has been an unusual year is to be as obvious as possible. 

 What everyone wants to now this year is a more urgent reiteration of "How's business?' The answers range widely but many of the top resellers are doing OK, although obviously it's not a good year to be specialiing in airlines, oil and gas, live entertainment, restaurants and hotels.  For the list of the 100 honorees and a discussion of the issues in the mid-market, stay tuned in mid-Mary.

Th

Yes, this has been like a continuing going-out-of-business announcement. But finally, it is last call for entries for Bob Scott's Top 100 VARs for 2020

While you are working at home, squeeze in the time to complete an application and return it as soon as possible. Each year, this list publicizes the top mid-market financial software resellers, ranked by revenue. It has been a great year to sell cloud products. Once the panademic eases, it should be an even better year for the sale of cloud products and anything that involves automation of business processes. You return your submission form or request one by contacting us at bob.scott@pmg360.com

The mid-market has been strong. Companies like Microsoft, Oracle NetSuite, Sage Intacct, IFS and Unit4 have all reported cloud subscription growth of greater than 25 percent in the last six months.

With the coronavirus sweeping through the world, working remotely has gotten a boost. Will mid-market sales stay strong with this impetus or take a dive with the general economy? There are many factors in the new, new norm. As we try to gain a handle on the market direction, the call for entries for Bob Scott's Top 100 VARs is open for the 2020 selection. So to receive a form for submission so you can be a part of this year's story, email to request a form and return it to  bob.scott@pmg360.com by April 10