The world's largest software company is aiming to ramp up its Navision and Great Plains acquisitions, which have been moulded into the newly independent division operating under the moniker of Microsoft Business Solutions (MBS).
With a clear target of mid-sized enterprises, MBS is attempting to retain the hearts of the 70 existing Great Plains and Navision partners in the region and to win many more with new products to be launched in 2003.
The stated goal of MBS is to supply the mid-market with enterprise-wide resource planning applications encompassing everything from accounts to inventory management, human resources, customer relationships and e-business.
Flemming Beisner, managing director of MBS Australasia, introduced his local management team at a Partner Connect conference in Melbourne last week. He said that "the mid-market is still ripe with opportunities" and that MBS would seek "to grow aggressively" and is "sure to move ahead at a faster rate than the rest of the market".
"[Mid-market] customers want solutions that are easily implemented and that have a security of investment," Beisner said. "We have been working hard to understand the opportunities. The [Great Plains and Navision] organisations have been through a transformation and we are now fully integrated."
According to Beisner, MBS expects to meet enterprise solution providers such as PeopleSoft and SAP head-on in the mid-market space. "We will seek to compete aggressively across many aspects of the mid-market and I expect to meet all those other players as they attempt to move down into this space," he said.
"By definition, the mid-market is different in this country but we are already one of the main players [through the Navision and Great Plains heritage]. Microsoft has had a long association with SAP but as they move down to the mid-market, we will come up against them more.
"Because there is a smaller tier-one customer space in Australia, we do compete against the bigger brands more often . . . we know we are a part of Microsoft and therefore have to have aggressive growth aspirations."
Imploring ISVs to develop vertical solutions based around the MBS products -- including Microsoft CRM, which is to be launched in Asia-Pacific in "about six months" -- Beisner said MBS is "ramping up the channel". He insists that Microsoft CRM will integrate with existing applications and heritage data.
"We create a three to five-year business opportunity," he said. "Partners who have sold and implemented other CRM packages are ideally suited to be an MBS partner. We have put a lot of thought into how to partner for effective change management and there will also be lots of partners looking to get involved in CRM."
The newest Microsoft business unit will also be using a Software Assurance-based licensing business model. This is similar, but not the same, to that recently introduced by other Microsoft business units, in which customers pay a premium to maintain the latest versions of the applications they purchase.
"The licensing strategy is somewhat different to the broader Microsoft," Beisner said. "Having customers getting annual enhancements under Software Assurance is not new to us."
Beisner did admit that there was some chance of conflict between distributors where existing Navision partners and existing Great Plains partners cross paths.
"It is a huge issue for us. We want to have growth but [distributors] will know where they fit in and their differentiators will be based on skill sets they have already gathered," he said. "We feel we have a great fit with partners and there will not be too much crossover."
Earlier this week, Microsoft reported an operating loss of US$68 million in its Business Solutions division, on revenue of US$107 million, for the quarter to September 30.