The History of Master Builder Software

Sage Master Builder (SMB) software has an interesting history. Like many software products that serve specific industries, Master Builder was conceived by someone in the industry who was just trying to run their business better.

Dan Smith – the founder of Master Builder – is a great story teller and I have heard him tell the story of Master Builder’s origins several times. I cannot give it justice here and I won’t try, but the basic start of Master Builder was around 1980, give or take a couple of years. Dan was a general contractor based in the San Francisco area and he wanted a way to run his business better. He thought that the new emerging personal computers were potentially a good solution, so he went out an bought an Apple II computer and tried to find software to run his business on it.

Finding that there was little or no software appropriate for running a construction business, Dan did what any good entrepreneur would do and set out to write his own. He wrote the original Master Builder with great knowledge of contracting and self-taught knowledge of computer programming. The software he ended up with was very consistent in applying construction logic to a computer program.

Soon, Master Builder was moved from the Apple platform to the IBM PC platform and Dan started selling the software to other contractors as “Master Builder by Omware.” His primary sales method was training local bookkeepers and accountants on the software and then letting them apply their business and construction knowledge at their clients to use the software effectively. This group of advisers was the key to Master Builder success around the country and Dan was very good about developing the knowledge base of the advisers and supporting them in their own businesses. However, the catch twenty-two issue was that an advisor would sell a few copies of Master Builder and then start working closely with the clients that bought them. Soon, the advisor became too busy to add more clients and no longer sold the software. This would make the client happy, the advisor successful, but was very limiting the income of Master Builder.

Dan struggled with this issue the entire time I knew him as the owner of Master Builder. However, Dan had great integrity and never wavered in his support of the advisers even when it cost him money. What it did do was build a team of advisers across the country with knowledge of the construction business and his software unlike anyone else in the software industry.

In 1994, Dan made the decision to convert Master Builder to Microsoft Windows. Software vendors were all looking at this possibility. Some thought that MS Windows was an inferior operating system for business software (and it was at the time) – but they underestimated the demand for the GUI (graphical user interface) by users. Dan saw that this was the future and made the determination early to move from the PC DOS system to Windows. The interesting thing about his decision was that he decided to completely rewrite Master Builder rather than just “move” the DOS software.

The move to Windows was a struggle and lasted several years before a complete and stable product was released. I started working with Master Builder in February of 1995 and my training class was on the first Windows release of the software. Dan Smith taught the class himself because no one else knew much about the software.

I installed the very first production installation of Master Builder 6 – the first Windows version – at a Naperville, Illinois contractor in September of 1995. The official release of the software was in March of 1996.

The Windows version of Master Builder was the first on the market in the construction industry, but Omware still struggled with the sales process. They had a good product but there were many other products in the market and the king of the hill at the time was Timberline. Timberline was perceived as a more sophisticated and bigger product although they had not yet made a complete transition to the Windows operating system. At this time, Dan brought in some investors and made a real effort to get a larger market share. True to Dan’s character and dedication to his advisor channel, he gave every advisor $1,000 in stock in Omware when he began the big push to grow the company.

In 2001, Master Builder was purchased by Intuit. The deal brokered by Dan Smith was incredible for all of the investors. The purchase price by Intuit was 6 or 7 times the current revenue of Master Builder. One of the key factors – according to the key note address by Scott Cook, the founder of Intuit – was the expert advisor network that Master Builder had built around the country. Unfortunately, Intuit’s actions over the following years did not match their rhetoric.

The attractive element of Master Builder for Intuit was the possibility of moving contractors up from Intuit’s flagship product, Quickbooks, to a more sophisticated tool for contractors, Master Builder. Intuit was tossing around numbers of 25, 50, or 100 Million in sales of Master Builder within five years. At the time they purchased the software, Master Builder had sales was in the 6 to 7 million range. Dan Smith stayed on for a couple of years as vice president of the Intuit construction division that held Master Builder, but he was then replaced by Carol Novello.

With the replacement of Dan Smith came a total abandonment of integrity and support of the expert advisor network that was originally developed by Omware. The message was “sell at all costs” and the politics were brutal. It was sad to see a weak and inept management team at Intuit dismantle the expert advisor network that had built up over the years. Many of the people I worked with personally ended up taking jobs at clients or moving to other positions or other products. A few advisers survived and some thrived, but not many.

Significant development on Master Builder virtually halted on the product during the five years that Intuit owned it. They did release an enterprise version of the product which was simply the same software with a client/server database instead of a file server database structure, and the product did not do well. Intuit did, however, get their new licensing in place right away which shifted the traditional model of concurrent licenses that Master Builder had been using for 20 years to a per seat model. This caused tremendous angst in the user community as Intuit tried to force users to buy a software license for every computer in their office, field, and home so two people could use it conveniently. I spent hours dealing with this with my own client base. Ultimately, Intuit shifted back to the concurrent seat model, but the damage was done.

In May of 2006, Sage Software purchased Master Builder from Intuit*. Interestingly, this took place not long after Sage had purchased one of Master Builder’s primary competitors, Timberline. Sage is much more savvy about how to sell to vertical markets and has made some significant and much needed improvements to the product. For instance, the licensing is less intrusive on the system, they have added drill down to the reporting, and fixed many of the bugs that had been plaguing Master Builder for the years that Intuit owned it. Also important to the long-term viability of Master Builder, Sage is beginning to develop a true knowledge base for users accessible through the Sage web site.

Personally, I am encouraged by the steps Sage has taken so far. In 2005, I was guessing that Master Builder had only a few more years of life left and Syscon was actively looking for a product to move their clients to. That fear has gone away and Sage Master Builder Release 13 is one of the best products on the market for a contractor. (law)

References:

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Sage Purchase of Master Builder