By Carly Lombardo
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Microsoft Great Plains’ Small Business Manager is the subject of more attention than most accounting products that have hit the middle market in the last two years. SBM, a lower-end version of the company’s Dynamics line, is viewed as a way to extend Microsoft’s accounting line to smaller client companies.
"We are trying to enter the business life cycle sooner. This allows companies who are outgrowing what they are currently using to make an easy transition to Dynamics," says Karen Engel, senior product manager for SBM.
Introduced in September, SBM, designed for businesses with $1 million to $5 million in annual revenue and fewer than 25 employees, is very much a work in progress as Microsoft Great Plains looks for a successful pricing formula and channel strategy.
In January, the company sharply trimmed the list price of the newly introduced line. The single-user price was trimmed from $1,500 to $995, while the multi-user version dropped from $4,000 to $2,495. Payroll costs an additional $500. The company also introduced a 90-day free trial available on its Web site.
There are already 700 resellers authorized to carry SBM, but Microsoft wants to develop a much broader channel. It will probably enlist both CPA resellers and the Microsoft channel, which is more oriented to selling hardware and networking products than accounting applications. A formal CPA reselling program is under development. However, some resellers are waiting for the fourth quarter distribution release, which will provide Purchase Order and Sales Order Processing, before becoming more heavily involved.
Despite predictions that SBM would primarily serve businesses that have outgrown Intuit’s QuickBooks, the application is getting a good reception from users on DOS-based mid-market accounting applications, such as the company’s own Great Plains Accounting. And VARs who have picked up the line are enthusiastic about it.
"Many people using Great Plains Accounting and Real World converted to Dynamics. But the people still holding on (to DOS applications) will find SBM an ideal opportunity because Dynamics is more than they need," says Alan Baumbach, senior manager of the Colorado Springs, Colo.-based consulting firm D. Skotty & Associates.
New resellers who want to sell SBM must complete a North American Partner Agreement. Existing Great Plains partners must sign an addendum to their current agreement. Partners must also attend Microsoft Great Plains University Online training courses covering installation and application training. And, finally they must pass an online SBM exam within 60 days.
Those who are not authorized for Dynamics, Solomon, or eEnterprise, must pay an annual renewal fee of $500. The fee will be covered under their annual service plan. Partners must also attend ongoing education programs and must add two new SBM customers per year.
Helene Cole, president of Cedar Knolls, N.J.-based Altara, formed by the recent merger of DMS Technology Solutions and Enterprise Resource Group, has already closed 12 SBM deals and is in the process of quoting a deal installing SBM at 200 franchised locations.
Cole feels there are two main reasons why her firm will be successful with SBM. One is the firm’s relationship with CPAs. "We have always had good leads partnering with CPA firms. And, we have a full CPA partnering program where we offer CPE credits, training classes, and seminars. Our CPAs have always wanted us to have a solution that would fit all their clients--SBM is the answer," says Cole.
The second issue is adopting SBM for vertical initiatives. For example, Altara, working with Great Plains, developed a property management software application for Cendant, a real estate brokerage franchiser. The system links Cendant’s transactional real estate application to Dynamics and SBM. Altara is also now marketing the system to companies such as Century 21, Coldwell Banker, and ERA Brokers.
"It alleviates the double entry many of the brokers had to do in the past. Some of the brokers have fairly complicated environments and require the power of Dynamics, but most of them are simple from a financial perspective and view SBM as a great upgrade from QuickBooks due to the flexibility and integration. Since we developed this system, we have been receiving about five calls per day from brokers looking for the solution," says Cole.
There are two levels of benefits available to SBM partners. Partners enrolling for Basic Benefits pay a $500 authorization fee and receive a copy of SBM Multi-Media CD with evaluation code for demo purposes.
They receive margins of 20 to 35 percent on software and 15 percent on related services. SBM support includes twenty support incidents per year. Marketing assistance is available via Great Plains PartnerSource Web site. The site provides marketing guides, listings in the SBM Partner section, and a local referral directory.
For an additional $1,500 annually, VARs can enroll in the Premium Benefit program. This entitles them to receive a five-user, not-for-resale copy of SBM Financial/US Payroll, plus a one-year subscription to Microsoft Affiliate Action Pack.
Premium partners also receive a one-year subscription to the Microsoft bCentral Partner Portal service.
Baumbach is excited about Great Plains’ renewed focus on the lower mid-market, which up to now had been primarily served by the DOS-based Great Plains Accounting. "There has been a gap for a long time from customers outgrowing QuickBooks. Most of them had difficulty justifying the economic move to Dynamics. Now, SBM is the product in the right price range, and grows with the business," says Baumbach.
As a Premium partner, he also feels new customers are more likely to choose SBM for its migration path. Because both SBM and Dynamics use SQL Server, customers will be able to move up to Dynamics easily. In fact, many resellers see SBM as a way to get price-conscious customers into the pipeline, and then sell them up later.
"SBM is opening the pipeline and feeding the future for Dynamics customers," says Cole. "Right now, we are going after start-up companies and biotechs who need a basic accounting system but will eventually move up to Dynamics or eEnterprise."
Baumbach also sees selling SBM as an opportunity for extra consulting. "For people who have only used QuickBooks and have had no bookkeeping experience, there is a need for consulting. We have found that our customer is best served with one to two days of consulting. The consulting usually focuses on installation, how to use the software, and modifying reports." Baumbach charges a $1,000-a-day consulting fee on top of the charge for the program.
Altara has been offering in-office SBM seminars once a month to both prospective customers and CPAs. "We’ve had a tremendous response to the seminars. Each one has had 15 to 30 people, and we are expanding the seminars to all five of our offices," says Cole.