Just when you think Microsoft has made its strategy clear for its business partners selling accounting software products, the company says things that don’t quite match what the market seems to be doing.

Microsoft Business Solutions says it has been expanding its channel. Doug Burgum, whose MBS operation looks more and more like an R&D unit, says that the company added 2,000 resellers over the last year with such products as the Retail Management package. It’s not clear that Burgum’s remarks place the addition of the Navision resellers in that number. Burgum himself used a rather wide number of MBS resellers worldwide--5,000 to 6,000 in his remarks. Orlando Ayala, the guy whose opinion counts the most when it comes to reseller sales, said that 5,000 resellers will be certified to sell MBS products. From input from the PR side, we have to assume these were off-the-cuff figures. The official total is placed at 6,000 resellers with 4,500 MBS certified. About 1,200 are certified to sell Microsoft CRM, although it’s not clear that the CRM folks are included in this count.

This channel growth is designed to further revenue growth as MBS aims for profitability in fiscal 2005, according to Burgum. That means that MBS will continue in the red through at least the year ending June 2004. (Revenue, but not operating losses, has been reported for MBS for fiscal 2003) This all comes at a time when Burgum says MBS has expanded its market share.

The channel expansion strategy is perplexing, since I hear a lot more angry VARs talking about adding other product lines than I hear VARs saying, “We just can’t wait to sell MBS products.” The Navision folks in the United States have been particular unhappy, along with what appears to be a big part of the Solomon channel. Of course, few make the complaints publicly, because they are afraid of a phone call from Microsoft. And VARs do sign on because the name Microsoft brings customers to their doors.

Still, there aren’t that many good accounting software VARs out there to pick up, unless they are all deserting from other vendors and I don’t get that sense. And within the MBS world, two of its top resellers, ePartners and Aston Business Solutions, have been shrinking over the last year.

One way to get growth is to bring other resellers into the mix. Microsoft just opened the doors to CRM authorization to the rest of its resellers. These include networking and hardware VARs who tend to stay in their fields. Will they continue to do that? Moreover, the numbers are staggering. The original Microsoft statement on the expanded channel is that “Later this year, the Standard and Professional editions of the solution will be available through both the open and certified Microsoft partner channels.” The official count of Microsoft Certified Partner Organizations is 28,712.”

Did Microsoft just open the door to another 22,000 resellers outside of MBS? Stay tuned, we’re still counting the results at MBS central. But if I’ve been sitting there selling Great Plains, Solomon, or Navision and just plunked down my fees for Microsoft CRM, I’d be a little concerned about the numbers.

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