Pastel`s growth spawns vibrant support industry

SME accounting, payroll and business software developer Pastel Software has spawned a vibrant support industry around its software applications.

The industry involves education and training institutions, a large channel of value-added resellers, SOHO and SME companies that offer bookkeeping and financial services, and other software developers that produce add-on products.

"Significant business is being done by educational institutions, from schools to universities, by private colleges and individual tutors, training people how to become competent users of our software, or to be able to teach others," says Terry Kier, managing director of Pastel Software, a Softline company.

"Over the past decade, countrywide teaching and training activities around our software products has developed into a big business with annual fee turnovers amounting to many millions of rands. This activity has become very widespread - just look at the bookkeeping situations vacant columns in the newspapers. On any given day between 50% and 80% of the advertisements will stipulate a requirement for proficiency or experience in Pastel."

Another area with significant potential for support industry growth stems from Pastel`s large user base, which now numbers more than 150 000. Other software developers regularly approach Pastel wanting to sell to the user base, frequently offering add-on type products.

Kier says that while this is encouraged by Pastel, these approaches also have to be treated with caution to avoid jeopardising the integrity of Pastel applications.

"So we are now working on a software developer`s kit (SDK) offering application program interfaces that will allow third party developers to integrate with our software without affecting the integrity of our application. I see this as a potentially high growth area."

More than 50 third-party developers based in SA, Africa, the UK and Australia have already signed up with Pastel this year, creating add-ons to meet specific country needs. Kier says each developer has on average 20 end-users running its application, which provides vertical customisation of the Pastel program.

"This is proving to be a strong additional channel for us. It`s opening doors into all sorts of niche or vertical markets that hold growth potential for us."

On the software R&D front, Kier says he believes some of the best development work is coming out of SA now because the software industry is learning to focus on giving customers what they want and need, not what they think customers need: "The customers are driving the development and that`s the way it should be."

Kier adds that Softline has provided synergies, process sharing, quality control and economies of scale through its offshore reach and this has assisted the SA-based R&D team to develop methodologies, functionalities and specifications that can be applied just about anywhere in the world - in line with Pastel`s global aspirations.

"We have learnt that consolidating R&D teams actually weakens them. Thus Pastel and other companies in the Softline group maintain individual R&D sections. Some synergies are evolving in the area of support services on common infrastructure, assisted by Internet and telephony technology advances that are enabling support to be provided internationally from a single site."

The company is also concentrating on servicing similar markets. Commonwealth countries, for example, all have a similar approach to tax and business legislation and tend to conduct business based on similar methodologies: "In global terms we are probably better placed than any other accounting software developer to realise these similarities because we`ve done the hard miles in the past and learnt from our earlier forays into export markets," says Kier.