Microsoft brings roles to the mid-market

Microsoft brings roles to the mid-market

Summary: Like any company with a strong survival instinct, Microsoft is constantly looking for growth. The latest target is the amorphous mid-market, and Microsoft is launching a major initiative tomorrow (Wednesday), trotting out Gates, Ballmer and other executives to deliver the details.

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TOPICS: Microsoft
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Like any company with a strong survival instinct, Microsoft is constantly looking for growth. The latest target is the amorphous mid-market, and Microsoft is launching a major initiative tomorrow (Wednesday), trotting out Gates, Ballmer and other executives to deliver the details. Consider this: Microsoft already has a massive mid-market share with Windows/Office (AMI-Partners estimates about 1.4 million organizations worldwide with 25 to 500 PCs fit the mid-size profile), and generates billions of dollars. The company has made previous attempts to further crack the mid-market with an array of business applications--Great Plains, Axapta, Navision,  Solomon, CRM--which haven't been successful.

In hopes of reversing losses, the company commissioned in-depth research to find out what mid-size company users need. According to the research, they typically don’t have the resources and cash of larger enterprises, but they aren’t small companies either. They often have multiple branch offices, address global markets and have to deal with regulatory compliance. You probably already knew that.

"Today’s business software doesn’t look enough like today’s businesses," CEO Steve Ballmer said in an e-mail prefacing tomorrow's event. Productivity software doesn’t map to the specific job functions, and business automation software (accounting, supply chain, CRM, operations, human resource, etc.) is overly complex for customizing in ways that match how individual companies work.

Drum roll: Microsoft will bridge the gap with a new generation of business solutions (now called Dynamics, e.g., Microsoft Dynamic GP, AX, NAV, SL, CRM ) and eventually 50 common roles/ business scenarios (sales, marketing, finance, operation, productivity, human resources, and IT management). Around 2008, the client and server technologies will share a common base and the best parts of Axapta, Great Plains, Navision and Solomon will be integrated into a second release stage of Microsoft Dynamics.  From Ballmer’s e-mail: "As a new order flows from sales to finance, billing, production and shipping, people should have simple tools to see what the process looks like – and to dynamically adapt the supporting software if the process needs to change."

Also, a new Longhorn-flavored server, code-named Centro, that will simplify management and automating tasks, and a new licensing program for mid-size companies to simplify license tracking, upgrades and management of software costs.

The strategy no doubt will deal with connecting to other platforms, but at its heart Dynamics and role-based solutions is simplification through standardizing on Microsoft client and server technologies and an attempt to catch up with competitors like Oracle and SAP. Businesses that already have Windows and Office can be lured by open source alternatives on the desktop, but the inertia of the installed base gives Microsoft some breathing room for now. A key part of the Dynamics strategy will be leveraging the Office installed base. Dynamics will have deep integration with Office, and in some ways will be an extension of Office.

But, it's not an easy target. Orlando Ayala, a long time Microsoft sales executive and currently—take a deep breath-- senior vice president, Small and Midmarket Solutions & Partner Group and COO, Microsoft Business Solutions, who is heading Microsoft’s mid-market expedition, cited lots of competitors coming from above and below engaged at some level in trying to win mid-size company contracts. In the CRM market, for example, large enterprises and the high end of the mid-market lean on Siebel, SAP, Oracle and a few other billion dollar software vendors. A growing number of upstart CRM vendors, led by salesforce.com, NetSuite, SugarCRM and others, are capturing small and mid-size company share and going after larger enterprises. Microsoft CRM 3.0 is somewhere in the mix, but isn’t considered among the market leaders. 

Major competitors have been talking up similar strategies, focusing on roles, business scenarios across industries, easy customization of business processes and simplifying management and task automation. Microsoft's fully integrated Dynamics platform is about three years out, which puts it behind companies like Oracle, which acquired mid-market player J.D. Edwards, and SAP that are focused on cultivating mid-size customers. Microsoft’s reputation has also been hurt by the ongoing security problems, and open source alternatives are chipping away at Windows. It will take new arch rival Google a while to get around to competing in this space as part of its do-no-evil software domination effort.
 
Alaya told me that focusing on people and role-based software is the center of success. It's good to hear that after 30 years of existence, understanding how people work and tailoring software for them is viewed as critical to success...

I'll be at the event on the Microsoft campus tomorrow and see if there is anything more to the story....

Topic: Microsoft

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14 comments
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  • What a surprise ;)

    With the memory of the last 30 years of the Microsoft existence, why won?t they go now that direction either?

    Starting with a simple development tool (basic) and now being on almost 90% of the desktop with an OS and an Office tool, the MS growth isn?t going to be huge if they don?t open ?new? markets for them.

    Will they be successful in such markets that require real customer education and support is another story!

    Just my two cents.
    Furball Tipster.
    furballtipster
  • Repeating the mantra.

    The anti-Microsoft drumbeat continues in the background.

    From the article:
    Businesses that already have Windows and Office can be lured by open source alternatives on the desktop, but the inertia of the installed base gives Microsoft some breathing room for now.

    Notice the implication that only inertia, and not the quality of the product, restrains the "installed base". The implications about the choice to be made by new entrants into the market doesn't bode well for Microsoft.


    And again:
    Microsoft?s reputation has also been hurt by the ongoing security problems, and open source alternatives are chipping away at Windows.

    Hard to say how security is relevant to the subject of the story.


    There is a potential competitor to Microsoft:

    It will take new arch rival Google a while to get around to competing in this space as part of its do-no-evil software domination effort.

    Has Google announced that it is attempting to enter the operating system market? (This sentence is a continuation of the prior quote about open source competitors to Windows.)


    I'm still awaiting the analysis about why Linux's great opportunity to compete with Windows before the long delayed issuance of Vista has failed. ZDNet bloggers did challenge Linux by saying Now or never, after all.
    Anton Philidor
    • Didn't you understand ZDNet (Cnet) is pro open source.

      Do NOT expect ANY article about MS ot appear here with out the open source slant, it's simply not with in ZDNet's ability.
      No_Ax_to_Grind
      • We had our chance?

        Once upon a times (that is not that far), MS and IBM entered into a strong agreement to co-develop a new OS named? OS/2!

        I used to work with this OS (even inside the Boca-Raton labs with great MS and IBM techies), from it?s 1.0 version up to its last Warp update. The very good thing about OS/2 was its overall performance (Vs. Windows 9x or any version of NT including the current XP releases) as well as a TRUE object oriented architecture (including but not limited to its excellent GUI called the WorkPlace Shell).

        But at the end of the day, whatever new releases of OS/2 were distributed, the ?Media? used to bash that OS (especially the ZD Group) complaining everyday about the lack of application.

        That ?irresponsible? attitude got bored most of the ISVs working on that platform and actually killed this OS for the sole reason that it was an IBM product.

        Now, they do the same to MS simply because it?s the leader.

        So, what is new with all these zealots who never ever wrote a line of code?

        Just my two cents.
        Furball Tipster.
        furballtipster
    • It's audience pandering

      Don't ask geeks why Windows has a bigger install base over Linux. Then you get treated to MS Sux, Gates Broke the Law, MS Monopoly etc. All is a waste a time after the 10th repeat. And the same in regards the other camps where we all get treated to how good <fill in the blank> is versus <fill in the blank>.

      Instead - what does MS have that OOS does not (and lets lump in Linux). Linux has been around since Windows 3.1 - but it's install base has been small on desktops (and I still contend that it's market share in serverland is purely accidental - a happy coincidence where a lightbulb or two went off over heads - a case where a market was found well after a product had been launched).

      Okay - for sake of argument only lets stipulate up front to all the technobabble of how one or the other is superior - it's not germain to the discussion.

      What is it about Linux/Open Source that keeps them from being the first choice or even on the short list when considering a solution for a business?
      quietLee
      • Figure it out

        Don't ask for handouts of information only to hand that info over to the competitor. MS has to figure it out for themselves.
        nomorems
  • Leveraging Office and Windows

    The following quotes do provide a good description of Microsoft's strategy:

    A key part of the Dynamics strategy will be leveraging the Office installed base. Dynamics will have deep integration with Office, and in some ways will be an extension of Office.

    and

    Around 2008, the client and server technologies will share a common base and the best parts of Axapta, Great Plains, Navision and Solomon will be integrated into a second release stage of Microsoft Dynamics.

    Also, a new Longhorn flavored server, code-named Centro, that will simplify management and automating tasks...


    Of course, competitors will not be able to match the functionality provided within Office.

    The basic idea is to make these functions work easily and simply, without the necessity for the user to notice all the software (and hardware) involved. The approach is end-user centric.
    Flexibility is also involved, with tools to allow adaptation of the software to circumstances. Again Microsoft playing to its strengths.

    Microsoft has not had especially good sales in this category with separate applications or linked sets of applications. But full integration gives them a chance.

    Will they succeed?
    Hard to say, partly because Microsoft is not one of the expected vendors in this category.
    But they do have a chance, especially with all the companies that have grown up with Microsoft, and want to minimize staff. Employees seem to be the most reluctantly incurred expense these days.
    Anton Philidor
    • I don?t disagree?

      ?with the fact that MS will be leveraging it?s Office base (it?s obvious for me) nor that competitors will be able to provide the same level of functionality integrated in the Dynamic project (that can be discussed forever).

      My though (and doubt) with regard to the success of such an approach from MS is based on my very personal experience with Bill Gates himself who said to me in front of almost 2.000 attendees, when I was arguing about bugs in MSWord and complaining about the obvious lack of support of MS techies that ?if you don?t like MS product, don?t buy them?.

      And I must admit that in an open market, he was right since I could buy other stuff!

      However, I?ve not seen any change in the MS global attitude in its end-user support these last 25 years. Since this new market truly requires end-user support, I?m not seeing MS successful in it.

      This reminds me also a story of the good old days when Philippe Kahn was the President and CEO of Borland (I was then a contractor in Scotts Valley) and when he told me that he would never ever enter in the ?application? market because of the end-user support cost. For that purpose, he told me the following funny story with regard to a guy who called for support on Sidekick and was arguing that the software didn?t work and even didn?t install on his computer. The customer was yelling at the tech support folk with bad words and the story ended with: ?So, I?ve an error message asking me to type any key! You know, I?ve a very standard IBM keyboard but I swear that I don?t have the key ?any? on it? (and it?s a true story). Now, few months later, Borland released Sprint (word processor) then bought Paradox (database), then Quattro (spreadsheet) then WordPerfect (word processor again), then, then, then? and Philippe Kahn left Borland!

      Just my two cents.
      Furball Tipster.
      furballtipster
      • Emblematic

        You're using an application that requires you to Open files in Windows, and there are four of them named 1, 2, 3, 4 in the folder. You click file 1, then hold the shift and click file 4, then click Open. The files appear in the application in the order 4, 1, 2, 3.

        Microsoft must be sentimental about that bug. People encounter it often and have complained about it for many years, and there it stays.

        But that's not end-user support.

        The key there is the way Microsoft's partners and relevant staff have been reorganized. I think eventually the partners will function like the hardware OEMs and take support responsibility from them.
        Anton Philidor
    • Sorry

      Yet another market MS is trying to get in their efforts to write and/or control all thing software. SAP Business One is already eating MS's dinner in the SMB market. The only thing MS can do is buy another company, but considering they already bought 4 and STILL can't get the market, methinks MS is out of the picture here.
      nomorems
      • I think that's what Lotus and WordPerfect said too.

        ;-)
        No_Ax_to_Grind
  • I don't think MS has quite figured out small business yet.

    Lets use the 25 PC sized company. (They said 25 to 500)

    The thing that seems to elude MS is the fact that in a small company it is all but impossible to define "roles" of the people working there. Example: This person is the accountant and needs access to accounting. That works in larger companies, but in a small company this person might be the accountant on Monday and the shipping/recieving manger on Tuesday and the Customer service rep any time the phone rings.

    In other words, when you work in a small company you may be required to wear any hat on any given day and it's alomost a certainty you will wear many hats in the course of a day/week. This makes defining "roles" almost impossible.

    Why is this an issue? Well, as you start defining "roles" and who needs access to what the cost of licenses becomes an issue. No, Joe the shipping clerk almost never needs access to accounting, but almost never is not the same as never. Do we buy another license for those rare times or do we exclude Joe?

    Yes they offer a license that allows say 10 people to access accounting at anyone time. But again in a small company that becomes an issue. As an example, it's not uncommon for a small company to "take inventory" a couple times of year. In many companies that means picking a weekend where the office is shut down, every comes to work and takes inventory and every one needs access. Do they now buy licenses for every person when it's only going to happen two days out of the year?

    The point I am making here is that a small business MUST be very flexible in both what they do and how they do it. Microsoft (most large companies) simply don't seem to be able to grasp that and are not doing a good job of building a "fit" to meet the demands of such flexibility...
    No_Ax_to_Grind
    • That is a real concern

      Having been the ?boss? of such a small (and furthermore international) entity for over 20 years (45 people located in 4 different countries), I do agree 100% with you with regard to the licensing policy, since not only I enjoyed to be a software architect but also a sale rep and also to make hundred of packages for our customers as a simple shipping clerk (that is the sole time when you touch that your ptoduct is appreciated).

      However, I don?t see any change with any Open Source products nor with proprietary solutions coming from small-middle sized software corporations.

      Your point is more general that it seems and should not be limited to large companies, including but not limited to MS.

      Just my two cents.
      Furball Tipster.
      furballtipster
      • I agree, it's all companies...

        I pick on MS as they are targeting these small companies and I question if they have a solution that is any better than anyone else.

        But you are right, no one seems to understnad how fluid (flexible) a small company is or must be.
        No_Ax_to_Grind