by John M. Covaleski
Minneapolis - Microsoft Corp. has unveiled bold and broad plans to become a dominant vendor in business applications software.
The company mapped out the strategy here at the first Stampede partners conference of its Microsoft Business Solutions group, comprised of the vendors that were acquired to gain entry into the business applications market - the accounting and enterprise management software developers formerly known as Great Plains, which Microsoft acquired in 2001, and Navision, whose acquisition closed in July.
MBS’s other core component is bCentral, the small business service Web portal developed by Microsoft prior to MBS’s formation.
MBS’s con-ference replaced the former Great Plains’ long-running series of annual Stampede conferences and, by most accounts, the Microsoft show was an improvement, even though it was version 1.0.
It attracted some 4,000 attendees to exceed attendance at the previous Stampedes, all held in the less accessible Fargo, N.D. And the resellers on hand widely praised Microsoft’s business application market plans.
Those plans include:
• Product re-branding that underscores the Microsoft name, while retaining the Navision and Great Plains identities.
• The launch of five new applications sets, including two vertical industry products, over the next 12 months.
• Deeper integration between the business applications and Microsoft’s Office suite, which already dominates the desktop software market.
• A commitment to extensive research and development of business applications, with an emphasis on Microsoft’s slowly evolving Internet services platform strategy, .Net.
• Extensive marketing support provided by Microsoft’s head-quarters.
Marketing initiatives include what appears to be the most aggressive financing program that is now available in business applications.
Parent Microsoft is providing MBS customers with complete financing for all their purchases, including software, hardware and implementation and other services, and is paying resellers their full sales margin as each loan agreement is approved.
Microsoft’s national marketing services for its desktop applications, including direct mail, telemarketing and regional conferences, will also be used to market MBS products. MBS also announced a new package of financial incentives for resellers and plans for easier-to-understand pricing schedules for end users
Many resellers on hand left with renewed confidence that Microsoft is taking the small and middle-market business software market very seriously and that it will be able to leverage its purchases of Great Plains and Navision to become a dominant force in business applications.
"There was fear among resellers that Microsoft would wait for .Net to take shape before doing anything, but the meeting showed that they are investing - and investing big - right now, and that makes a big difference," said Helene Cole, president of Altara, of Cedar Knolls, N.J., one of the largest and first resellers of Great Plains products. "This was a meeting that I enjoyed greatly."
"The financing program could really stir the market," said John Woodburn, a reseller from St. Louis Park, Minn. "A lot of companies need new systems but financing has been a real problem for them."
"The message from this conference is that Microsoft Business Solutions really has its act together, said Larry Schiff, president of New York-based Business Management Intern-ational, a longtime reseller and solution center for Navision products. "I would not want to be with another vendor. It would take a major acquisition to make any of them comparable with what Microsoft will be offering."
MBS is focusing most squarely on small and middle market businesses, a segment now served by applications vendors that include Best Software and Accpac International in the middle market, and Intuit Inc., whose QuickBooks controls more than 90 percent of the low-end market.
In his opening keynote address, MBS president Doug Burgum did not discuss market dominance, but he indicated that the company is on a higher mission than the former Great Plains, which he founded and built into a market leader before selling to Microsoft.
"We want to talk about potential, about how high is up for the human condition and how high is up for all of us," Burgum said at the conference’s opening. In his ensuing remarks, he repeatedly referenced Microsoft’s mission statement: "To enable people and businesses throughout the world to realize their full potential."
"It’s important to realize that Microsoft is embracing this statement and it’s something that you must learn to live with," Burgum told the audience of resellers. "This [meeting] is not about products, it’s about a journey."
However, most of the ensuing sessions were laden with product news - new marketing plans and development initiatives, MBS’s vertical industry product announce-ments, including the launch of a retail management system that includes several key retail functions, such as point of sale, and a Professional Services Automation for project-driven businesses. Both systems, designed for small and middle-market end users, integrate with MBS back-office accounting applications and with applications from independent vendors.
The company also announced a new Internet-based service program for end users. Business Portal and MBS officials reiterated their previously announced plans to release a customer relationship management system by year’s-end.
That CRM system will integrate with MBS and other vendors’ back-end applications, and more significantly, will also "synchronize" with Microsoft’s pervasive e-mail management program, Outlook. "We now have 250,000 enterprise customers, and we expect to get that many for CRM," predicted Lynne Stockstad, general manager of global solutions.
CRM general manager David Thacher said that the Outlook tie-in provides resellers with " a competitive advantage in cracking a middle market where 85 percent of businesses now lack CRM functionality." Resellers contacted at random agreed.
"Microsoft already has a large installed base for Outlook and they will leverage that right out of the starting block and turn CRM into a no-brainer," said David Cieslak, president of Information Technology Group, a Los Angeles-based reseller for MBS, Accpac and Best.
Marketing moves announced include plans to combine the Great Plains products, E-Enterprise and Dynamics, into one offering known as Great Plains that will be targeted primarily at middle-market companies. The Solomon line, another accounting/enterprise application that was part of the original Great Plains, retains its name and will also be targeted at the middle market.
Great Plains’ other principal accounting application, Small Business manager, will retain its name and remain MBS’s sole offering for the small business market of businesses with fewer than 25 employees and less than $5 million in annual revenue
On the Navision product side, Microsoft changed the name of the middle-market financial management tool Attain to Navision, and announced that Navision’s other product, Axapta, will retain that name and be marketed as MBS’s main product for higher-end corporate customers of $1 billion or more in annual revenue.
The new product mix is designed to scale the entire middle market, which MBS broadly defines as companies with from 25 to 500 employees and up to $1 billion in annual revenue. Marketing for Navision and Attain would focus on the middle and low end of the middle market, while Great Plains will be focused on the mid- and high- end of the middle-market and, to a smaller extent, on the corporate market covered by Axapta.
MBS will also be paying more attention to the low end of very small businesses with its Small Business Manager. "The vast majority of our assets are in the middle market, but you can look for us to step up our commitment to small business," Burgum said in a strategy session.
The conference featured discussion of the upcoming release of a new version of Small Business Manager, which MBS released last year in an effort to attract part of the very small business market now saturated by Intuit’s QuickBooks. New features in the 7.0 version include enhanced inventory control and streamlined sales and purchasing processes.
MBS, which has been recruiting accounting professionals to resell Small Business Manager or to consult with their clients on that product, would likely market that product even more aggressively in the months ahead. "There are over 13 million small businesses worldwide, so even a small percentage of that market would be an incredible opportunity," said Jonathan Weinstein, director of small business product management.
However, most accounting software observers concur that Small Business Manager has not made much of a dent in the market, thus far. MBS declined to disclose how many users or resellers the product has.
There was surprisingly little information delivered about .Net, a platform that could take another two years to gain substantial market presence. However, MBS unveiled a plan to make it easier for end users to eventually adopt that technology?
Licensed users of Great Plains, Solomon, Attain or Axapta, who are currently on MBS’s Enhancement/Upgrade Program, will be able to move to .NET without repurchasing the functionality. Any functionality equivalents between current solutions and the .NET solution would be included as part of the Enhancement/Upgrade Program.
