Locally owned accounting software companies have in the past struggled to compete with international accounting software vendors. But according to Corrigan, the international accounting software vendors will soon feel the effect of the weakening rand as local businesses consider cheaper options.
Software prices have already increased 40% and will continue to rise as the rand weakens. Emerging markets most exposed to lower growth prospects and lower demand for commodities have seen the sharpest falls in their currencies.
SA's currency lost about 26% of its value in six months after turmoil hit Chinese markets in the middle of 2015. Many observers have predicted that the rand will remain under pressure this year.
Corrigan said the falling rand was a boon for locally owned accounting software companies. "We are experiencing huge interest from companies that previously looked at dollar-based products. They all just went up 40% in price - no wonder they are calling us," he said.
"The weakening of the rand will be the cause of price increases across the board. At Palladium, we reduced our international pricing accordingly and have seen an upsurge in demand. We need to take advantage of the weakening rand," said Mr Corrigan.
He said it was also a good time for companies to retire their ageing costly enterprise software. "To have a rand-hedged product in today's environment is critical. The modern way of thinking is a 'pay as you go' or subscription model with no upfront balloon payments."
Source: BDpro
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