“Why do you keep writing such negative things about MBS and Doug Burgum?” a correspondent wrote recently.

It’s hard to write positively about losing millions of dollars. As much I admire Burgum, Microsoft Business Solutions needs work to establish an identity and a bottom line. Therein lies the problem. It is still an organization absorbing acquired companies and establishing an identity. Microsoft runs MBS as a combination of Great Plains and Microsoft. But either MBS is going to be autonomous, or Microsoft will put its own stamp on the unit. Pick one.

The low-cost Small Business Manager, now clearly a colossal failure, represents the problem with mixing competing models in a single product. Originally, Great Plains planned to position it against RealWorld, Great Plains Accounting, and Solomon III. Those products represent an installed base of more than 43,000.

Unfortunately, Microsoft seemed to be in we’re-Microsoft-we-don’t-need-to-know-anything mode when it aimed SBM at a lower-level market. It also didn’t hire people who know how to work with resellers or CPAs.

As one reseller complained, “My new SBM regional manager sounds like he graduated from high school and worked for a while at Circuit City selling stereos. He is very focused on sales, but has no idea of the reality of the accounting software industry. The best market for SBM would be upgrades from the old Great Plains Accounting installed base. But they are not focusing on it.”

MBS appears to be working on these issues through the new Great Plains and Solomon Standard editions, lower-priced versions aimed the DOS installed base. Under a current promotion, RealWorld Classic users can buy an equivalent set of Great Plains Standard modules for $1,500.

But MBS must also address conflict between its own resellers, riding GP as the main horse and continuing to verticalize Solomon as a PSA product. The neglect of Navision, intentional or not, is also smart. The Navision market in the U.S. is not worth a big effort. Axapta will take care of itself by moving into the corporate market. Moreover, old-fashioned channel management is needed. Give incentives to resellers who provide valid leads to resellers of competing MBS products, and provide even bigger rewards to those who share referrals that close.

Another move that would help—make the MBS strategy clear. Tell customers and partners where the unit is going and who the key players are. Burgum does not believe customers care about tables of organization. I disagree. When dealing with a dominant supplier, large customers want to know direction and the names of future leaders.

Finally, either Microsoft has faith in the MBS leadership, or it doesn’t. At some point, it’s going to have to make a statement—if not in words, then in actions.

Another possibility is that Microsoft would sell MBS to some other financial software vendor, maybe a Tier 1 company that wants a mid-market foothold, so that Microsoft can work with people like SAP and PeopleSoft, unless its plans call for squashing them, too, after a period of co-existence. Or it could take a shaving market approach, giving away the razors (mid-market accounting software) to get the blade business (high-priced systems and database software).

It could be a close shave either way.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access