It was no surprise that Microsoft announced the purchase of Navision for $1.3 billion in cash and stock. Consolidation is the name of the game, and this is only the latest round in the accounting software market. It simply underscores that competition among software vendors occurs on an international playing field these days. Microsoft was also on record as saying it intended to grow its applications business.

 

But figuring out all of the implications of the deal is a lot tougher. Almost everyone agrees that the major motive behind the purchase is to give Microsoft a better foothold in Europe in accounting software where the Great Plains name has little recognition. Even though Navision will operate under Great Plains founder Doug Burgum, the European group is being called Microsoft Business Solutions, as opposed to Microsoft Great Plains Business Solution (a name many people believe is on the way out in the U.S.) With $184 million in annual revenue for Navision, the deal does not close the gap on rival Sage Group in Europe, but it’s a big foot in the door.

 

Many observers believe that Microsoft also gets some product line help with Axapta, the former Damgaard product, which some consultants picture as being better architected for the corporate market than Great Plains’ eEnterprise. It supports both the Microsoft SQL Server and Oracle database engines, and Microsoft would love to increase its share in the Oracle world of enterprise-sized businesses.

 

Most also agree that Navision’s operations in the United States played a small role in the decision. After years of working to build a channel in this country, Navision still only had U.S. revenue of $11.1 million for the first half ended December 31.

 

The crystal ball gets fuzzier in figuring out the new Microsoft Great Plains product line. The line up now actively being sold includes Dynamics, Solomon, eEnterprise, Navision Attain, and Axapta.

 

Solomon VARs continue to be nervous about what they perceive as lack of development for the product. But some fairly knowledgeable people think that Solomon will remain because it represents the only strong entry in the Project Accounting Marketing for Great Plains. Broadly based Dynamics also seems safe.

 

The answers look fuzzier for eEnterprise. There’s some suspicion that package is not lending itself to the rewrite that is assumed to be occurring for Microsoft’s .Net platform and that Axapta just might be a better system. As for Navision Attain, it’s a harder call. Proponents hope that the customizable Attain will survive for those users who want to “do it their way” as opposed to the vendor’s way.

Still, all of this is probably valid until the .Net stuff rolls out. Previous statements from folks at the former Solomon claimed that there will be one common engine with a variety of flavors. The question is not will all of these products survive, but rather how long does it take the programmers to achieve that common platform on Microsoft’s quest for global domination.

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