Microsoft outlines business software redesign
7, 2005, 9:30 AM PST
By Alorie Gilbert
A fledgling unit of Microsoft
will this week unveil the first fruits of its labor around a
multiyear effort to knit together its collection of incompatible
business management programs.
The business unit, called Microsoft
Business Solutions, represents Microsoft's foray into the so-called
enterprise resource planning, or ERP, software market in which
Oracle and Germany's SAP are wrestling for global dominance. The
programs from each company are designed to automate a broad set of
corporate tasks, from fielding customer service calls to organizing
At its annual Convergence conference, which starts Monday in San
Diego, Microsoft will be rallying around its ERP customers and
partners and talking up the product enhancements it's developing.
Microsoft chairman Bill Gates will participate with a keynote speech
slated for Wednesday. Also scheduled to appear is Doug Burgum, head
of Microsoft Business Solutions and former chief executive of Great
Plains, a company Microsoft bought several years ago. His speech is
planned for Monday.
Specifically, Microsoft expects to
discuss how it's progressing on its plan to redesign four separate
ERP product lines it has assembled through a series of acquisitions,
an undertaking it has code-named Project Green. Though Project Green
won't be complete for another three or four years, Microsoft hopes
the finished product will help the company better compete with
established ERP rivals with programs that are cheaper and easier to
"We went into Green almost in a
sense as plumbers, thinking about how to redesign ERP from the
bottom up," said James Utzschneider, general manager of strategy for
Microsoft's Small and Midmarket Solutions & Partner Group.
The company is gearing up to release
its first set of Project Green features this year, starting in the
fall with the 8.5 release of its Great Plains applications.
Microsoft will follow that with new releases of its Axapta and
Navision products that incorporate Project Green developments, such
as a new user interface that's consistent across most of the unit's
products. The new versions will also share the same Web portal,
business reports and interoperability tools, making them easier to
navigate and maintain.
Eventually, about 2008, the programs
will share the same computer code, making them easier to maintain
and develop, Utzschneider said. The company will also incorporate
technology that makes the software easier to customize and
modify--the Achilles heel of ERP software.
Other plans include expansion into
more overseas markets, including Brazil, China and Japan, and a
greater effort to target larger companies and divisions of global
companies, said Lynne Stockstad, general manager of marketing and
strategy for the group. The company is also filling out the unit's
management ranks with the recent hiring of former executives from
PeopleSoft and rival Best Software, she said.
Microsoft's entry into the business
applications market hasn't gone entirely smoothly. It recently
delayed releasing the new version of its customer service
applications by at least six months after customers that got a sneak
peak at the product said it wasn't up to snuff.
During its most recent fiscal
quarter, Microsoft reported flat revenue in its Business Solutions
division. Stockstad said software sales actually climbed across most
major product lines, but the unit's revenue was flat because demand
for services fell as Microsoft farmed more of that business out to
Meanwhile, the division continues to
lose money, although losses have narrowed. Last year, the company
reorganized the division's leadership and elevated the head of the
group in the chain of command in an effort to get business on track.