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MAIL STOP 4-6

Ms. Barbara C. Jacobs, Esq.

Mr. Jeffrey Werbitt

United States Securities and Exchange Commission

450 Fifth Street NW

Washington, DC 20549

Re:                               SoftBrands, Inc.

Form 10 filed January 14, 2005

File No. 0-51118

Dear Ms. Jacobs and Mr. Werbitt:

                                                Thank
you for forwarding your comments. We are filing via EDGAR, simultaneous with
this letter, an amended Form 10 that includes changes that address each of your
comments.  As you discussed with our
counsel, we are also simultaneously filing a quarterly report on Form 10-Q to
update the information contained in the Form 10 for the quarter ended December
31, 2004.

                                                The
remainder of this letter responds to, and provides supplemental information
regarding, each of the comments contained in your February 23, 2005
letter.  With respect to each of your
comments, we have repeated the text of your comment in bold below followed by
our response.  If our response includes a
revision to our Form 10, where practical, we have also included the text of the
revision.

General

1.                                       Please note that your registration statement will
become effective by operation of law 60 days after it was filed pursuant to
Section 12(g) of the Exchange Act.
However, we will continue to review your registration statement after
the effective date, until all comments have been resolved.  Once a registration statement becomes
effective, you are responsible for making public filings, including but not
limited to, quarterly and other reports required by Section 13 of the
Exchange Act and proxy statements required by Section 14 of the Exchange
Act.

                                                We
acknowledge that our obligation to make filings consistent with Section 13(a)
of the Securities Exchange Act of 1934 shall commence upon the effective date
of our registration under Section 12(g)—on March 15, 2005.  Please note that it is our desire to be as
responsive as possible to the comments of the Commission and our objective is
to comply fully with those comments.

Item 1.
Business, page 8

                                                Background and Development of Business,
page 8

                                                Development of Business, page 9

2.                                       Please
supplementally provide support for your belief that Fourth Shift has the
reputation as a leading and stable enterprise resource planning system for
mid-sized manufacturers and that SoftBrands is one of the leading ERP suppliers
in China, on page 14.  Additionally
expand to state concisely the basis on which the leadership claim is made.  Similarly, you should provide the basis of your
belief that SAP is the largest enterprise software company in the world.  Does SAP refer to itself as the largest
enterprise software company in world?

Please note that the Fourth Shift product has been
listed, as recently as 2001, as one of the four leading products for sale to
Tier III manufacturers—manufacturers with revenue of less than $200
million.  Fourth Shift was one of the
first (if not the first) manufacturing software systems for use on a desktop
computer in a local area network (introduced in 1985). Fourth Shift is sold as
a standardized system, and we encounter a very low rate of integration issues
or “bugs.”  Nevertheless, in response to
your comment, because we cannot locate recent statistical information
segmenting competitors in the “Tier III” marketplace, and because it is
difficult to provide objective information regarding stability, page 9 of the
Form 10 has been revised to remove the clause “the reputation of Fourth Shift
as a leading and stable enterprise resource planning (“ERP”) system for
mid-sized manufacturers including.”

Please note that SAP does claim to be the largest
enterprise software company in the world.
In accordance with SAP’s website, accessible at
http://www.sap.com/company/index.epx:

“Founded in 1972, SAP is the recognized leader in
providing collaborative business solutions for all types of industries and for
every major market.

With 12 million users, 88,000 installations, and 1,500
partners, SAP is the world’s largest inter-enterprise software company and the
world’s third-largest independent software supplier overall. We have a rich
history of innovation and growth that has made us a true industry leader.
Today, SAP employs nearly 30,000 people in more than 50 countries. Our
professionals are dedicated to providing high-level customer support and
services.”

From the 2004 annual report of SAP AG:

“Translated into US dollars, the reporting currency of
our main competitors, we increased software license revenue 12% while the rest
of the market saw a market decrease (3%).
SAP’s worldwide share of the market against its four largest competitors
was 59% at the end of the fourth quarter of 2003, compared to 51% at the end of
the fourth quarter of 2002. In the United States, we became the market leader
through a 2003 increase in market share of 14%.”

2

Please also note that, to our knowledge, Fourth Shift
was one of the first suppliers, if not the first supplier, of enterprise
resource planning software with a significant presence in China, having
established an agency in Beijing in 1989 and a wholly-owned subsidiary
headquartered in Tianjin in 1991.  We
believe Fourth Shift remains a leading ERP system for the relatively fragmented
market for manufacturing software systems in China.  Nevertheless, in response to your comment,
and because we could not locate any statistical information segmenting ERP
suppliers in the China market, we have revised the second sentence of the third
paragraph under “Customer Base” on page 15 of the Form 10 to read as follows: “SoftBrands
has had a presence in China since 1989.”

Manufacturing
Software Operations, page 9

Products,
page 10

3.                                      Please revise to
more clearly explain whether your products work independently from each other
or may work in conjunction with each other.
Also, you should discuss the interoperability of your products with
established software platforms.

In response to your comment, the Form 10 has been
revised in the introduction to the “Products” section for the Manufacturing
Software Operations as follows:

“We offer ERP software, consulting, implementation,
installation and ongoing support to manufacturing customers worldwide.
Our principal products include Fourth Shift, Fourth Shift Edition for SAP
Business One, Demand Stream, and evolution.
Each of the products is sold as a separate software system and they are
not specifically designed to be dependent upon any of our other software
products.  Fourth Shift is designed to
work with Microsoft operating systems (Windows NT/XT/2000) and is offered with
either a SQL Server database or an mdbs database system.  Fourth Shift Edition for SAP Business One is
derived from our Fourth Shift code and consists of some of the modules of that
product that have been altered to be closely integrated and function with the
SAP Business One product.  Demand Stream
is a lean manufacturing product that is also designed to work with Fourth Shift and Microsoft
operating systems, but that is not platform dependent and also works with other
ERP software systems and databases.
evolution is a software system that was developed completely independent
of Fourth Shift by a company acquired by a predecessor, and is not specifically
designed to function with our other manufacturing products.  It is a platform independent application which
functions with most commonly used operating systems and database management
systems.”

4.                                       You disclose that SoftBrands “agreed to a significant
joint initiative with SAP to address the software application needs to
medium-sized manufacturing companies.” Please revise to further explain
your relationship with SAP.  In this
regard, you should explain the roles of each party in the relationship and
explain how your relationship with SAP gives you access to the distribution
capacity of SAP and provides an opportunity to sell SoftBrands solutions to SAP’s
enterprise customers.

3

In response to your comment, we have revised the Form
10 to include, after the first sentence under the caption “Fourth Shift Edition
for SAP Business One”, the following disclosure:

“Through this arrangement,
we are working with SAP to closely integrate several of our Fourth Shift
modules with the SAP Business One product.
Most of this integration work is being performed by us, and at our cost.  SAP has appointed us as a distributor so that we may sell both Fourth Shift Edition for SAP Business One and
complete SAP Business One systems to our customers and potential
customers.  Further, SAP has introduced
us to its network of independent resellers for SAP Business One so that we may negotiate individual reseller
agreements with some or all of those resellers.”

Sales and Marketing, page 14

5.                                      We note that you
have contracts with approximately 25 resellers and referral partners.  Please revise to more fully describe the relationships
with your resellers and referral partners and your dependence upon them.  For example, what are the general terms of
your arrangements? Do you have long-term agreements with them? What is the
compensation structure? Are you substantially dependent upon any of these
agreements? Please provide substantially similar disclosure under “Sales and
Marketing” on page 18, as applicable.

Please be advised that, although we use resellers and
referral partners, less than 5% of our total revenue is generated by these
sources and no more than 1% of our revenue is generated from any single
reseller or referral partner.
Accordingly, the business of SoftBrands is not substantially dependent
on those relationships as a whole or individually.

In response to your comment,
we have revised the Form 10 under “Sales and Marketing” on page 14, by adding a
new fourth sentence to read as follows:

“These arrangements currently provide us less than 5% of our annual revenue.”

We have also revised the Form 10 under “Sales and Marketing” on page 18, by adding a new sentence to
the end as follows:

“Revenue from resellers represents less than 5% of our annual revenue.”

See our response to comment
number 44 regarding revenue recognition on transactions
involving resellers or referral partners.

Hospitality
Software Operations, page 1

Products,
page 16

6.                                      Briefly discuss
the acquisition of the Medallion intellectual property rights in 2003.  Please disclose the material terms of your
agreement with RekSoft.

4

In response to your comment, we have revised the Form
10 to replace the second paragraph of the description of Medallion with the
following three paragraphs:

“Prior to 2003, we were a distributor of
Medallion.  We acquired all of the intellectual property rights to this
product in May 2003 through the purchase of WinnLodge AG, the Swiss entity that
owned those rights.  We paid $711,000 in
cash at closing to the three shareholders of WinnLodge, assumed and paid
$250,000 of WinnLodge’s indebtedness and issued the shareholders of WinnLodge
promissory notes for an additional $804,000 payable in quarterly installments
of $67,000 through March 30, 2006.  We
provided additional consideration to the WinnLodge shareholders of $250,000,
partially in cash at closing and partially in promissory notes, in exchange for
non-competition agreements.  Finally, we
agreed to make additional contingent payments to the sellers of 10% of
Medallion quarterly sales that exceed $670,000, up to a maximum payment of
$696,000 through June 30, 2006.  No such
payments have been required to date.  To
the extent any such payments will be required in the future, they will be
capitalized as part of the acquired technology.

We have hired and paid an affiliate of one of the
selling shareholders, RekSoft, to assist with further development of
Medallion.  RekSoft, a Russian company,
is currently paid $25,000 a month in consulting fees to assist with this work.  Since May 2003, with the assistance of
RekSoft, we have worked to standardize the offering and increase its appeal to
our target markets.

There are currently more than 600 installations of Medallion worldwide.  We expect to increase our marketing of
Medallion in the United States and China during 2005.”

Please note that we have contracted with RekSoft for a
number of years, but that the current relationship is under a one year
extension of a previous agreement.
Accordingly, we have also revised the disclosure at the top of page 19
to read as follows:

“RekSoft, a St. Petersburg, Russia—based company, currently provides core
development for Medallion under a contract that expires in 2006.”

7.                                      Please revise
your disclosure to more clearly differentiate your Medallion and PORTfolio
products.  How do Medallion and PORTfolio
differ? Do they both utilize similar platforms? May they be used in conjunction
with each other? Also, elaborate on the function of your RIO product.  How does it “support the activities of spas,
health clubs and resorts?” How does it tie together all areas of a resort
property?

In response to your comment, the Form 10 has been revised in the
introduction to the “Products” section under Hospitality Software Operations as
follows:

“We provide property management systems (“PMS”) and leisure management
systems (“LMS”) to hotels, resorts, spas and health clubs.  We have two primary property management
systems, Medallion and PORTfolio.  Our
primary leisure management

5

system is RIO.  None of these three products are designed to operate together and each is
sold as a separate product to separate markets.
Although PORTfolio and Medallion are both property management
systems that could compete with each other, we acquired them at separate times
and they have features that appeal to different geographic and hotel
markets.  Medallion is more widely used
in small to mid-sized hotels and hotel chains in continental Europe.  PORTfolio has centralized reservation
functionality and is used in the United Kingdom, and in English speaking
countries for larger hotels and hotel chains.
RIO is designed specifically to serve sites that accommodate the
multiple leisure activities of full service resorts, such as fitness centers,
spas, golfing, tennis courts and dining.”

We have also added the following sentence to the end
of the first paragraph of the PORTfolio product description:

“PORTfolio is Microsoft Windows NT/2000/XP compliant
and operates with a Sybase database management system.”

Finally, we have revised the last paragraph of the RIO
product description section as follows:

“The RIO functionality allows a resort to record the
transactions of its customers in a central database, irrespective of where the
resort customer transaction is generated.
This allows the resort to have a single source of information for its
customers for spa, restaurant, gift shop, classes, special events, golf, tennis
and fitness center activities.  This is
accomplished through specific modules such as RIO Spa, RIO Retail and RIO Dining.”

8.                                      You disclose that
Medallion can accommodate both single and double-byte languages.  Please revise to explain the terms single and
double byte languages and disclose why this enables the product to be sold in
global markets.

In response to your comment,
we have revised the Form 10 to replace the second sentence of the first
paragraph in the Medallion
product description with the following:

“Medallion is a fully translated product that can
function with character based languages such as those used