Redmond, Wash. (Aug. 1, 2003) -- Microsoft Corp. has bold plans to develop a host of vertical industry software products. Nonprofit and government, healthcare and education will be the first, and a total of 50 industries will be considered in the approach, according to Pat Fitzhenry, Microsoft's director of vertical strategies.

In the vertical thrust, Microsoft will develop applications that meet each industry's very specialized needs, and co-market those applications with its general use applications, such as desktop applications that include its Microsoft Office suite, and accounting solutions from it Microsoft Business Solutions group. Microsoft will develop some of the vertical applications itself and recruit industry specialist independent software vendors for the work.

"We are mapping out the opportunity across all verticals and across all geographies to determine where we have solutions, how big is the opportunity in each market and, if there is a need for a solution, should we build it or partner with an ISV," Fitzhenry said.

In the nonprofit/government work, which is the furthest along, the ISVs are: Serenic Software of Lakewood, Colo., which has been developing nonprofit/government applications that work with MBS's Navision product line; CherryRoad Technologies of Parsippany, N.J., which develops solutions that work off MBS's Axapta line; and Olson Business Solutions of Seattle, which develops systems that work with MBS's Great Plains products. A fourth nonprofit/government ISV also develops off of Great Plains, but its identity could not be confirmed.

Fitzhenry in early July met with executives at the four nonprofit/government ISVs to discuss the strategy, and, more recently, he discussed it with attendees at Serenic's customer conference.

The vertical products developed under Fitzhenry's program would be available for distribution by Microsoft's thousands of sales partners focused on small and midsized businesses and, where appropriate, by members of its Industry Services Group, which markets to very large enterprises.

The use of ISVs quells speculation that Microsoft would buy a nonprofit/government software development specialist. However, Microsoft has not announced whether it will or will not buy such a company.

-- John M. Covaleski

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