Microsoft beefs up push to small businesses
Monday January 16, 9:09 pm ET
By Daisuke Wakabayashi
SEATTLE (Reuters) - Microsoft Corp. (NasdaqNM:MSFT - News) unveiled a new rebate and free service offer for its small business accounting software on Monday, aimed at luring customers away from rival Intuit Inc. (NasdaqNM:INTU - News) in the months leading up to tax season.
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Jeff Raikes, president of Microsoft's business division, said the latest $10 million marketing campaign is part of a larger effort by the world's biggest software maker's to gain share in software and services tailored to small businesses -- a market estimated to be worth tens of billions of dollars.
"Small businesses are relatively underserved compared to large businesses when it comes to using information technology," Raikes said in an interview with Reuters.
"We see that as a very large opportunity."
The company plans to offer a $100 rebate for Microsoft Office Small Business Accounting 2006, which lists for around $180, and one-year of free technical support to help customers move to digital book keeping or shift from a rival product.
Microsoft has failed in the past to unseat entrenched leader Intuit's QuickBooks accounting software, while more recent rivals such as Salesforce.com Inc. (NYSE:CRM - News) and Google Inc. (NasdaqNM:GOOG - News) have built competing businesses with services delivered over the Internet.
"Microsoft had tremendous success with larger businesses, but that market has become very saturated," said Joe Wilcox, senior analyst at Jupiter Research.
"The growth there is not so good. For smaller businesses, it's a little different. There is still a lot of opportunity for Microsoft to consolidate that market around its products."
Targeting the up to 30 million businesses worldwide with 10 or fewer employees, Microsoft -- along with Oracle Corp. (NasdaqNM:ORCL - News), SAP (XETRA:SAPG.DE - News) and IBM (NYSE:IBM - News) -- are trying to soften the blow of slower IT spending by large corporations.
The latest marketing effort comes in addition to the $100 million it has already earmarked for the small business market.
Another part of its effort to win over small businesses will be Microsoft Office Live, which was announced in November and aims to deliver software services such as e-mail, Web sites, online marketing and selling via the Internet.
The online service, funded by advertising and selling subscriptions or licenses, represents a new strategy for Microsoft, which is trying to take a page from ideas used by Web-based rivals Yahoo Inc. (NasdaqNM:YHOO - News), Salesforce.com and Google.
Raikes, who oversees two of Microsoft's seven main business segments that accounted for nearly 30 percent of Microsoft's $40 billion revenue in fiscal 2005, said it is on target to meet its goal of a test launch of Office Live in the first quarter of 2006. |
