Microsoft Lays Enforced-Concrete Foundation For Its Business Solutions


Event Summary

At the end of September, Microsoft Business Solutions (MBS), an enterprise applications division of Microsoft Corporation (NASDAQ: MSFT), the largest software company in the world, fleshed out the contents of its seemingly well crafted and diligently thought-out product and services strategies aimed primarily at the small-to-medium enterprises (SMEs) applications market, consisting of many intriguing value propositions such as an indication of simplified no-frills pricing and enticingly mitigated financing. A central component of Stampede 2002, MBS' annual event for global partners and value added resellers (VARs), the two-hour session, showcased MBS' recent extensive development efforts across its new and existing business applications.

By unveiling its threefold development strategy:

  1. Expanding and enhancing current solutions,

  2. Creating new solutions that complement existing offerings, and

  3. Delivering next-generation business applications — MBS provided a comprehensive roadmap for its vision for "connected solutions that will transform business processes for customers, partners, suppliers and employees". The product strategy session featured a series of solution demonstrations that reflected MBS' threefold development efforts.

This is Part One of a four-part note on Microsoft's strategy for its MBS division. Parts Two and Three will cover the Market Impact and Challenges, and Part Four will make User Recommendations.

1. Expanding and enhancing solutions

By deepening integration points with the Microsoft Office desktop applications suite, MBS attempted to demonstrate to its global partners how they can close near-term sales and add incremental revenue. In addition to sharing upcoming solutions, the demonstration highlighted new integration capabilities available in the next version of SharePoint Team Services portal solution and Excel spreadsheet solution. The demonstration of Small Business Manager (SBM) 7.0 focused on effective inventory control and streamlined sales and purchasing processes, while other features highlighted included the SBM Commission Wizard in Excel, the built-in cashflow calendar, Office integration capabilities, and integration with Microsoft bCentral, hosted services for small business.

Advanced distribution functionality designed to improve the inventory and order management capabilities of both general businesses that fulfill products and wholesale distributors will be added to Inventory and Order Processing modules of MBS Great Plains solutions. Global partners learned to that end that blanket purchase order support, inter-site transfers and pick/pack/ship workflow functionality are a few of the new features that will be added. Moreover to that end, MBS announced at Stampede 2002 the acquisition of the following Myridas software modules from its European Solution Developer of the Year, UK-based Trinity Computer Services:

  • Advanced Distribution

  • Advanced Picking

  • Available To Promise

These modules will be incorporated for general release with Version 8 of Great Plains. With immediate effect these modules for Version 6 & 7 will be available directly from Trinity along with the seventeen other Trinity modules for distribution. Trinity Computer Services had long been a former Microsoft Great Plains Business Solutions' partner dedicated to meeting the needs of the distribution sector, and its Myridas software modules have been developed specifically to add important distribution functionality to former Great Plains Dynamics and eEnterprise, recently rolled into a single MBS Great Plains brand. Also, through the Trinity Partner Program, other MBS partners have the opportunity to obtain Myridas modules, software development and consulting services to help their own customers create specific distribution capabilities in their business systems.

2. Creating new solutions that complement existing offerings

Recently announced Microsoft Customer Relationship Management (Microsoft CRM) (see Microsoft Paints CRM Landscape On Lately A 'Still Nature' Business Applications Scenery) product's availability in North America was confirmed for the fourth quarter of 2002. It will be sold and implemented through MBS' reselling partner channel, and partners and former Microsoft Great Plains' customer support team will provide support. The solution will be available on-premise or as a hosted solution through select partners, and the software will be accessible either through a browser or through Outlook. Highlights of the demonstration included the solution's integration with MBS Great Plains and its use of eXtensible Markup Language (XML).

Microsoft Business Network (MBN) is aimed at connecting small and medium-sized businesses with their trading partners, improving ease of operations and access to business-critical information. To that end, an NFL team customer demonstrated the team's potential use of online trading services via MBN to develop and distribute customized catalogs selling merchandise with their logo to local retailers of all sizes. Further, the Bank One Direct PayChek Card from MBS should allow companies to work exclusively within their enterprise resource management (ERM) system from account setup through payment and ongoing maintenance. With Direct PayChek Card, no changes are reportedly needed on existing MBS Great Plains or MBS Solomon applications.

MBS also announced it will deliver two new industry-specific solutions, MBS Professional Services Automation (PSA) and Microsoft Retail Management System (RMS). These seemingly feature-rich and customizable products represent significant additional investments toward providing small and mid-market businesses with the industry-specific solutions they need to operate efficiently and competitively. With these additions, MBS has embarked on providing a range of powerful industry solutions for manufacturers, distributors, retailers and professional services organizations. The new industry solutions could also offer significant opportunities for MBS' reselling channel partners and independent software vendors (ISVs). Resellers should gain the ability to extend their reach into thousands of small and mid-market retailers and professional services businesses in the US and Canada, whereas ISVs can use the industry solutions as a foundation to create customized applications.

MBS PSA was devised to provide new ways for a project-driven organization to improve its project efficiency and profitability and adapt quickly to changing conditions. Based on MBS Project Accounting -- Solomon and the Microsoft Project 2002 platform, this integrated business solution combines best-of-breed functionality with great flexibility, allowing project-driven organizations to serve their customers better. The solution brings together resource management, project management, knowledge management, time and expense (T & E), project accounting, financials, and reporting and analytics into one tightly integrated solution. The Stampede demonstration of the new offering showcased project management, resource management, project accounting, time entry and profitability reporting features as used by project managers, accounting managers and team members.

Microsoft Retail Management System, built on the award-winning QuickSell line of products, now offers a complete solution that automates a retailer's operations from the cash register right through to the company headquarters. RMS is a comprehensive solution that integrates point-of-sale (POS) and retail management applications with MBS Great Plains and MBS SBM financial applications, bringing a sophisticated yet easy-to-use and cost-effective offering to small and medium-sized retail businesses. This solution offers POS, inventory management, pricing and promotions, reports, and analysis, all with tight integration to the back-office financial applications. To that end, the Stampede session demonstrated the new integration with the MBS Great Plains product, as the store operations system handled POS and back-office functions such as inventory control and CRM.

3. Delivering next-generation business applications

MBS intends to build, in a long term, a common foundation framework on top of Microsoft .NET framework that will serve as an integration platform for vanilla' application components stemming from all MBS' solutions, which will then be enhanced vertically or in any other way by third-party vendors. The first piece of the initiative to develop a next-generation product line based on .NET technology was the new Microsoft CRM product. The goal is to eventually have a single code set that can be configured to address all of the various product and market areas.

In parallel with that effort, MBS will continue to support and enhance all of the existing products from former Great Plains and Navision. As next-generation capabilities become available, they will be integrated into the current products and begin to replace some of the existing functionality. In order to somewhat streamline the marketing and product positioning, the following product brands have been rationalized:

  • Former Navision Attain will from now on be called MBS Navision

  • Former Great Plains Dynamics and Great Plains eEnterprise will be merged into a single product line called MBS Great Plains.

  • Solomon and Axapta will retain their brands under the MBS umbrella brand, while Navision XAL will be rolled into Small Business Manager.

  • Dynamics and Solomon products running on Pervasive platform will from now on be called Great Plains Select and Solomon Select respectively.

Furthermore, driven by its vision of achieving global leadership in business applications, a vision built on innovation, steadfast customer support and an extensive partner network, MBS announced bold new initiatives developed to help its worldwide network of partners and customers quickly and affordably realize their full business potential. The company also unveiled a key component of its enhanced service strategy for partner education. The new learning management system will reportedly allow a more feature-rich learning experience through customization flexibility, the ability to accommodate individual learning paths, and skills gap analysis options. The initiatives address the following:

  • Customer financing program — MBS will offer a financing program developed specifically for small and medium-sized businesses that will make it easier to purchase end-to-end solutions. Microsoft Capital will provide financing, offering both term loans and operating leases that should maximize customer flexibility while reducing the amount of cash required at the time of initial purchase. The financing program will be available to customers through authorized MBS reselling partners.

  • Customer-choice purchasing and packaging — MBS' new approach to selling and packaging is aimed at delivering maximum value to customers regardless of the size and complexity of their business. Solutions will be scaled according to the number of users, enabling thereby customers to purchase technologies and services that best meet their needs. Price breaks will be incorporated at several points for customers buying in higher volume and/or user seats. In addition to the new need-based model, new naming and product branding mentioned earlier will be put in place.

  • Consistent and visible pricing practices — MBS pledged to begin publishing prices, simplifying thereby the purchasing process and emphasizing the "pay only for what you need" value of the new packaging model. Benefits to partners should include a shortened sales cycle and "no haggle" pricing, eliminating thereby the time and cost of more complex pricing models.

This concludes Part One of a four-part note on Microsoft's strategy for its MBS division. Parts Two and Three will cover the Market Impact and Challenges, and Part Four will make User Recommendations.

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