Accounting software is a marketing tool that is often forgotten in the PC business. But it shouldn't be - it's very important to many dealers. So the proposed acquisition of Tetra by Sage is a significant event.
But will this acquisition finally give Sage the mid-range market position it has always coveted? That remains to be seen. Perhaps a more interesting question is why Sage has not made a move on Tetra before now.
The straight answer, of course, is that Lynx Group had already moved in, but there's more to it than that. Perhaps Sage didn't know Tetra might be available. Perhaps it never thought of buying Tetra. But it's bid is very enthusiastic at 305p per share - 63 per cent higher than the share price on the day it announced it was in negotiation talks with Lynx.
Sage wants the mid-range market really badly. It has the money, and Tetra - like most businesses - has its price. Yet it would have made sense five years ago, let alone today. But Sage first snapped up Multisoft and thought it could leave the company to its own devices - but that all came to nothing.
Sage is finally having to pay a decent price for entry into the mid-range.
But still, why not earlier? It has always had enough money to make a move.
This is where we come to the real reason, in my opinion, that Sage is making this move now - Pegasus.
Pegasus is the old adversary that Sage has never quite managed to kill off. In the past, Pegasus has been in deep trouble, but Sage has never struck the killer blow. Two takeover bids have been launched and repelled. Pegasus is not for sale - at least not to Sage. And while Pegasus has failed to make any serious impact on Sage at the low-end, over the past few years its Opera product hasn't helped Sage's mid-range prospects either.
Pegasus is on the verge of releasing its MPower mid-range client-server system. In CS/3, Tetra's client-server product, Sage must see a product that can quell the threat of MPower and give it that long yearned for mid-range credibility. But if CS/3 looked so good, why didn't Sage make a bid earlier?
Sage still has to make all of this stick, which may not be as easy as it would seem to be. Tetra is successful, profitable and has some excellent products. But Sage is not Tetra and some users and resellers may bridle at its presence. Accountancy software is a sensitive business in the UK. Lately, Tetra has been responding to competitive pressure by making noises about being an ERP vendor. That might change now, or at least, the perception might.
Meanwhile, the Sage presence may unsettle some partners and customers. If it doesn't manage to reassure the Tetra faithful then they may start to gravitate upwards towards the established ERP systems or the other mid-range accounting products. Or, woe betide, towards MPower.
In CS/3, Sage probably has the product it needs to achieve its mid-range ambitions, but will it be able to carry the market with it?
Simon Meredith is a freelance IT journalist.
Infrastructure provider says international sales now make up 51 per cent of its revenue
Suzanne Chappell of TMS plans sailing venture after selling Oxfordshire-based TMS to acquisitive Chess
Withdrawal of credit insurance by some providers a 'reflection' of current challenge facing IT sector, according to MD Steve Soper
SMART's UK managing director joins Lenovo to boost SMB business