A few years ago, Microsoft rolled into town with its press team and product managers to announce the birth of a new product line, Profit, which supposedly was going to be a strong player in the small business accounting arena. But it was clear from the moment the product briefing began that mighty Microsoft had not done its homework. You could sense uncertainty in the room.

About eight years later, Microsoft’s Great Plains unit began talking about a product called "Blue," which would help the company go further downstream into the accounting market. This year, Small Business Manager emerged.

There’s a real feeling of déjà vu here. It’s not the fact that Microsoft is again trying to go downstream. The sense of "been there, done that," is that Microsoft once again has tried to rely on being Microsoft, not doing its homework in launching a product.

The tale of Profit was that it wasn’t a bad product, just too much product for the low-priced market. It was a double-entry, fairly robust package and the lesson on the low end is that QuickBooks has proved that small business doesn’t like to do accounting. So Profit got handed back to Great Plains, which had written it, and then sold to Champion Business Systems. It’s still there. But nobody much notices.

SBM is headed in the same direction unless somebody starts doing their homework. Part of the problem appears to be mixed signals from the Fargo side of the business and the Redmond, Wash., side.

The original Great Plains white paper showed "Blue" positioned squarely against the former RealWorld line. And since SBM is a slimmed down version of Great Plains Dynamics, that seems like a proper positioning. But Microsoft has this vision of 10,000 resellers, or CPA recommenders, or something, turning SBM into, if not mass market product, something lot more mass than Dynamics. At this rate, it’s not going to happen. It would take more space than it’s worth to detail what looks like channel strategy designed on the fly.

Microsoft has now entered an alliance with Creative Solutions (a sister company of ours) to have SBM exchange data with various CSI applications and to make SBM available as a choice on client portals. CSI knows the CPA market and can educate Microsoft. But as one observer said, "Microsoft has to get over the idea it’s going to have 10,000 CPAs as resellers." More recently, Microsoft announced it will distribute SBM through Ingram Micro, another bid for a large scale distribution.

It keeps on looking like Microsoft is going through the maze, looking for the way to the end, turning down a number of blind alleys. Given the price, it’s hard to see this as a program that CPAs will recommend in numbers, the way they do QuickBooks. Given the attempt to sign up masses of recommenders and resellers it’s hard to see this as a product that will enthrall classic accounting VARs.

Microsoft needs to fit the product to the market that it is most capable of serving. It clearly wants a hit that serves a broad market. But sometimes, those things just don’t happen. QuickBooks this ain’t. It’s not even Peachtree. It’s an entry-level mid-market accounting package.

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