eLedger Shuts Down
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eLedger, one of the first Web accounting systems for small businesses, announced Tuesday (May 15) that it will shut down its ASP service effective May 31 and begin selling licenses to its source code.
"It is generally accepted in the accounting software community that the ASP model is a superior method of deploying financial applications, and that it will ultimately be the method of choice," said Lee Mellinger, eLedger's president and CEO. "However, the current adoption rate is not sufficient to sustain us and we have been unable to secure additional capital in the current economic environment. We are simply ahead of our time."
There are three types of organizations who could benefit from the source code, Mellinger told InternetNews:
- A company that would pick up where eLedger left off and create an accounting ASP;
- Portals and ASPs looking to bolster their offerings; or
- Enterprises requiring an accounting system with remote access.
While competitors like NetLedger broadened their product offerings, eLedger focused on enhancing its core accounting applications.
The company's most recent undertaking, eLedger 3.0, was an attempt to combine the richness and usability enhancements of a Windows-based application with the accessibility and other features of an ASP, eliminating the limitations of a browser-based application. While it never made it to the streets, its source code is complete and available to license, Mellinger said.
"I believe we had the best technology in the space. Technology that could have sped the adoption rate," Mellinger told InternetNews. "We just ran out of money."
The target markets for eLedger's products were CPAs and third-party ASPs and portals wishing to host and integrate the application with other product offerings. The latest eLedger products, eLedger ASP Server and eLedger Business Manager, are open architecture systems designed to create an infrastructure for accounting on the Internet. These products made extensive use of XML and object oriented/distributed processing concepts.
The source code will include eLedger 2.2, the company's current production Web ledger product, as well as its unreleased eLedger ASP Server and eLedger Business Manager products based on its proprietary Internet ObjAcct Accounting Platform.
Mellinger said the company has already received inquiries about its source code from users and people who have signed up to evaluate the software, even before announcing that it was available to license.
Mellinger said plans are underway for transitioning eLedger customers to another service. "We're trying to put together a plan that allows them to migrate gracefully," he said.
Founded in January 1999, eLedger is a privately held company based in Toledo, OH. Half of the employees were laid off earlier this year, and negotiations are in the works to find jobs for the remaining 30 at "a company we've worked with in the past – a name you'd recognize," Mellinger said. Only Mellinger and one vice president will remain to wind down operations and oversee the software licensing.
Mellinger said he thinks the future for ASPs is bright, but not for all ASPs. "I don't see the pure Web-based accounting systems surviving through to the point where ASP accounting is widely adopted. The companies that will be in it in the end are Microsoft, Intuit and Peachtree," Mellinger said. "I think NetLedger is surviving on time borrowed from Larry Ellison."
Ellison, CEO of Oracle Corp., is a major investor in NetLedger. In the latest round of funding in April, Ellison and StarVest Partners invested another $30 million.
"I agree – accounting-only ASPs won't survive," Evan Goldberg, president and CEO of NetLedger Inc., told InternetNews. "That's why we are delivering much, much more – a full business management system, called 1 System, including CRM, e-commerce and more."
"This is a brand new category never available to small business, it will save them loads of time and money and let them run their businesses more effectively, and NetLedger has by far the most powerful offering in this space. We're way ahead of Microsoft, Intuit and Peachtree."