Microsoft swallows up Business Solutions unit

Microsoft swallows up Business Solutions unit

Microsoft Australia has completed an internal restructure that sees its Microsoft Business Solutions (MBS) unit consolidated into the rest of the vendor’s operations.

MBS was a division of the vendor formed from the acquisition of large financial software vendors Great Plains and Navision. It was also the group responsible for the development of Microsoft’s soon to be released customer relationship management (CRM) suite.

As part of the restructure, Microsoft Australia channel manager, Kerstin Baxter, has been promoted to “director of partner group”.

She now takes responsibility for both Microsoft’s mainstream channel partners and its Business Solutions resellers. Former MBS division channel manager, Errol Schoenfisch, has returned to the US.

Baxter said that for most existing Microsoft products, resellers would not notice a drastic difference. Most resellers would still maintain relationships with the same channel account managers at Microsoft.

Terms, rebates and accreditations would essentially remain the same.

But for new products, particularly those in the business solutions space, resellers would be adapting to new conditions. As previously reported in ARN, Microsoft’s CRM software is being offered not only to accredited MBS resellers but also the wider Microsoft certified partner community.

“As we introduce new products, we will review the channel structure,” Baxter said. “For MBS products there was traditionally a closed, select group of partners with specific skill sets, while for other Microsoft products the structure was very open. In the case of CRM, it will be a hybrid of both.”

The inclusion of the wider Microsoft channel community in the CRM campaign has raised eyebrows, and in some cases ire, among certified MBS resellers.

Managing director of MBS reseller Aston Business Solutions, Ian Whiting, said that many Microsoft resellers do not have the necessary skills to apply software to meet business requirements.

“You can never deploy [CRM] well without that experience,” he said.

His concerns are shared by CEO of Data#3, John Grant.

If the channel structure for the CRM product was left too open, it might result in “credibility” issues for the MBS channel, Grant said.

“If Microsoft brings a ‘box culture’ to the business solutions space, it may devalue the ERP product suite,” he said. “But I’m not shaking in my boots. If your average reseller can’t implement these solutions, there is still opportunity for people like us.”

“Yes, we are disappointed, but I guess I always thought this was inevitable,” CEO of MBS reseller Eclipse, Brad Stroop, said. “While we have spent a lot of money [in the business solutions area], we did tread lightly at the same time. We are not as exposed as some of our competitors.”

Stroop said that despite these concerns, he was hoping Microsoft’s strategy would have a positive long-term affect on the business solutions area.

“The exposure CRM will get by the very nature of Microsoft has to be good for the market,” he said. “It’s not a buoyant market at the moment.”

Vice-president Asia-Pacific for competing CRM vendor FrontRange, Archie Wilson, said he had spoken to several “disenchanted” resellers and was concerned that if Microsoft failed to create the demand, but succeeded in commoditising the market, resellers would suffer from margin erosion.

“The feedback we are getting is that it is not a smart move,” he said. “It will be like hardware [in terms of margin erosion].” Baxter said Microsoft encouraged feedback from business partners, but argued that an open acquisition strategy for the CRM product did not preclude highly skilled partners from being rewarded for their investment in the product. “Those partners that are investing in us will continue to see strong investment from us,” she said. This investment came in the form of joint business planning and marketing programs, rebates and higher accreditation, Baxter said.

Systems implementation manager for Microsoft reseller ComputerCORP, Tamara Ayers, said MBS resellers should not be concerned about margin erosion as most resellers have had to make a transition from being a box dropper to become a solutions provider.

“The traditional way of selling [box-dropping] has gone out the window,” she said.

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