Microsoft to Acquire Great Plains Software Inc.

REDMOND, Wash., and FARGO, ND, Dec. 21, 2000 — Microsoft Corp. and Great Plains Software Inc. today announced plans to join forces in an acquisition designed to provide small and medium companies with the technology necessary to thrive in an increasingly interconnected economy. The acquisition, according to Microsoft, represents a major step in the company’s entry into the small and medium business applications market.

Drawing on Microsoft’s global scale and .NET platform technology and Great Plains’ expertise in business applications for small and medium companies, both corporations say they view this as an opportunity to help small and medium business be more efficient and agile by automating interconnected business processes, bridging the gap between on-premise software and next generation connected software and services. This is also an important part of Microsoft’s strategy to deliver the power of the .NET platform to small and medium companies. At the same time, Microsoft and Great Plains will create new opportunities for partners to grow their businesses by delivering and integrating next generation solutions that take advantage of the powerful .NET foundation for small and medium business applications that Microsoft and Great Plains will provide.

On the eve of the announcement, key strategists from both corporations — Group Vice President Jeff Raikes, of Microsoft’s Productivity and Business Services Group, and Great Plains’ CEO Doug Burgum — took a few moments to sit down with PressPass to discuss the intricacies of acquisition, the significance of the deal to small and medium companies and about the new opportunities this will create for existing Microsoft and Great Plains partners.

PressPass: Why did Microsoft choose to acquire Great Plains?

Jeff Raikes, Group Vice President, Productivity and Business Services Group, Microsoft

Raikes : There is a fundamental shift happening today in the way businesses operate. The Internet has created a world in which business processes are being run both on-premise and online. Increasingly those processes are interconnected, leading to the integration of financial systems, customer management, supply chain management, e-selling, and other key business processes. But that is hard to do today, and the expense can put those solutions out of reach for some companies. So we’ve been thinking very hard about how to use the power of software to help, and that is behind our decision to enter the small and medium business applications business. Our bCentral offering is a part of the solution; offering hosted services to very small companies via the web. In the enterprise space, we have deep partners that we are working with on the toughest problems facing those large companies. But we realized that we weren’t doing enough to help small and medium companies deal with the IT challenges they face in the new interconnected economy. We looked hard at this, trying to decide if it made more sense to build business applications from scratch or do some sort of acquisition. That searching led us to Great Plains, a company that in 19 years of operations has proven itself as one of Microsoft’s most creative and successful partners. Doug and the team have grown their company to the point where they are a leading provider of business management applications to small and medium companies. As we talked about the next generation of Internet-enabled .NET software services, we came to the realization that we see the future of business applications for small and medium companies in the same way. We also realized that by joining forces, we’ll be able to offer a more complete offering that partners can customize and a more complete solution to customers. So that’s why we are teaming up. We think that together, using Microsoft’s global scale and .NET platform and Great Plains deep expertise in business applications, and by investing in the extensive group of partners at both companies, we can deliver the solutions our small and medium sized customers are asking for. Solutions that bring powerful software technology to small and medium companies and eliminate islands of business information, provide companies with critical business intelligence, and integrate core business processes that today are disparate and disconnected. We can do that all in a way that is accessible, simple, based on Internet standards, and affordable enough for the small and medium business to deploy and support.

PressPass: What made Microsoft attractive to Great Plains?

Doug Burgum, CEO, Great Plains Software, Inc.

Burgum: We weren’t looking to be acquired, but as Jeff says, the more we talked about the needs of our partners and customers, the more we realized how much we could do together. And this is a great fit. Both companies are deeply committed to working together to create opportunities for an existing and expanded network of partners by enabling them to deliver a broad range of services and products. Plus, both Microsoft and Great Plains value hard work and innovation, and both reward excellence.

PressPass: What is it like to go from being a relatively small company to being a division of one of the largest software companies in the world?

Burgum: We’re excited to bring our talents to Microsoft as a division of a company widely regarded as the most successful technology business in the world. We look forward to reaching more customers through Microsoft’s global sales and marketing reach, and to using Microsoft’s development and technical resources to deliver solutions to customers and partners. We’ve spent a lot of time strategizing for the benefit of customers, partners and team members. The Great Plains team will remain a complete Division of Microsoft. The business will continue to be operated by the existing business management team with my support and that of David Vaskevitch and the Business Applications Division. This combination of Great Plains and Microsoft allows us to accelerate our vision of being the leader in providing interconnected business management solutions to small and medium companies, while staying true to our mission to improve the lives and business success of our partners and customers. And we will do it as we always have, through a talented and dedicated global partner channel.

PressPass: Microsoft’s talked a lot recently about its .NET strategy. How does that vision factor into this acquisition?

Raikes: The Microsoft .NET platform represents a transformation from individual Web sites and devices to an array of devices and services that work together to give customers access to information any time, any place and on any device. The acquisition of Great Plains will help us accelerate Microsoft’s .NET vision by bringing powerful solutions to smaller companies that eliminate islands of business information, provide companies with critical business intelligence such as a single view of the customer. By combining our resources, Microsoft and Great Plains will be able to provide small and medium businesses tools they need to take advantage of .NET software services as they roll out, and more seamlessly integrate with, and do business with, other companies and their customers.

PressPass: How does this acquisition benefit customers?

Burgum: We service small and mid-market companies. This acquisition will help make our integrated business management solutions and the benefits of Microsoft’s .NET vision of simple, integrated technology that works anytime, anywhere on any device truly accessible to these customers. Microsoft and Great Plains will continue to broaden and strengthen the Great Plains product lines with an expanded focus on helping customers succeed in the interconnected economy, and continue to provide customers with outstanding solutions, service and support that they’ve come to expect.

PressPass: In light of the pending economic slowdown, realistically, what sort of growth do you expect in the small- to medium-sized business arena?

Raikes: This acquisition represents a continuation of Microsoft’s effort in the market for business applications for small and medium business analysts say business applications is a $30+ billion business worldwide, and a significant portion it directed to small and medium companies. By combining the assets of both companies, this acquisition will create considerable growth opportunities for Microsoft, Great Plains and their partners.

PressPass: How does the acquisition of Great Plains — Microsoft’s partner — affect the rest of Microsoft’s partners?

Raikes: Check out the November issue of SmartPartner and you’ll see that Microsoft was found to be the number one company to partner with. We don’t intend for that to change. We plan to continue to make our partnerships a priority and we will continue to develop these relationships with our partners for the same reasons we always have — to foster development and training, and to share resources such as marketing, sales and support. With our sales and marketing strengths and the development support and access to technical information, we intend to develop an increasingly stronger channel of partners in the future that will create more opportunities to deliver services.

PressPass: What are some of the things we’re likely to see come out of this acquisition in terms of new technologies?

Raikes: We’re working together on a new way of thinking about, building and delivering business management software. We want to harness the power of Microsoft’s .NET vision in a way that builds new opportunities for partners to deliver high value custom business solutions and delivers innovative software and services to small- and medium companies at the very same time those kinds of solutions are becoming available to very large businesses. In other words, a family-owned business that employs 35 people will have access to — and will be able to afford — the same kinds of technology purchased by a multi-national corporation.

Burgum: In the future, we plan to integrate technologies from both companies that provides lots of choices for businesses to manage their technology on a wide range of devices — including PCs, terminals, and handheld and wireless devices — and will let them decide between Web-based services, hosted applications, or on-premise, locally-managed solutions, all according to their business needs, support requirements and customization requirements.

Additionally, we plan to
the boundaries of today’s functional applications to expand solution reach beyond a company’s traditional users to its entire business community of employees, customers, suppliers, and partners.

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