This is from today's wsj, which is a pay site, but if you decide to subscribe it is about 1/5 the price of the print version:
At a time when SAP is announcing weaker earnings MS is coming to market with an inexpensive version of CPM for companies that want to conserve capital. Pretty cool, huh?
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Microsoft Targets Small Businesses
With Customer-Relations Software
By REBECCA BUCKMAN
Staff Reporter of THE WALL STREET JOURNAL
Microsoft Corp. is pressing ahead with its planned move into business-application software, one of many risky new efforts tied to its purchase last year of Great Plains Software.
At an event Thursday in Silicon Valley, Microsoft showed off a test version of its much-anticipated "customer-relationship management" software, which helps companies monitor customers and track their purchases.
Microsoft General Manager David Thacher said the software, due out before the end of this year, would cost far less than similar products aimed at medium-size businesses. The pricing is "aggressive," he said. "It's aggressive to try to develop a new market demand."
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Companies will pay anywhere from about $1,000 to $2,000 for back-office "server" software to run the system, Mr. Thacher said, and $395 to $1,395 for each employee who uses it. Customers generally would have to buy other, related Microsoft software to make the system work.
The product is perhaps the most important to emerge from the former Great Plains division, recently renamed Microsoft Business Solutions. The rapidly expanding group -- now with about 3,800 employees -- has plunged, with varying success, into an array of new businesses that place Microsoft in the path of rivals that include Intuit Inc. and large German software maker SAP AG.
Thursday, Microsoft, Redmond, Wash., also said it had closed its acquisition, for $1.45 billion, of Danish software maker Navision AS, which is expected to sell the new customer-management software and other products in Europe.
Small- and medium-size businesses are a target of Microsoft Chief Executive Steve Ballmer, who faces declining growth in Microsoft's core Windows and Office software franchises. But he has already had to perform a delicate balancing act with Great Plains.
Although Microsoft insists the new customer-relationship management product won't compete with higher-end software sold by current business partners such as Siebel Systems Inc. and SAP, many analysts said they believe Microsoft will eventually try to move into the higher-end market.
While Microsoft executives ponder how to sell sophisticated software to large companies, they are also worried about tiny customers using off-the-shelf products from companies like Intuit. The division is "dealing with a lot of different little products," said Melissa Eisenstat, an analyst with CIBC World Markets in New York. "They need to begin to rally the product suite" around one big theme, she said.
To address problems at the low end, Microsoft recently slashed the price of its Small Business Manager accounting product, to less than $1,000 for some customers from $1,500.
It also added new features that the product lacked -- even though cheaper products like Intuit's Quickbooks had them, acknowledged Doug Burgum, the former Great Plains CEO now in charge of Microsoft's Business Solutions group.
Finally, Microsoft started selling the product to businesses more directly through technology wholesaler Ingram Micro Inc. after Microsoft "resellers" -- technology consultants who sell software and help customers install it -- complained that the profit margins on Small Business Manager were too small. "We knew we'd have a lot of learning to do," said Mr. Burgum, adding that he feels many of the problems have been addressed. |
