Q&A: An Inside Look at Microsoft’s Plans to Acquire Navision, a Global Provider of Integrated Business Solutions

REDMOND, Wash., May 7, 2002 — Microsoft today announced plans to acquire Navision a/s. The acquisition reflects both companies’ vision to deliver to small and midmarket organizations high-value business solutions that will enable them to thrive in an increasingly interconnected economy. The total transaction value is estimated at approximately US$1.3 billion. As a result of the acquisition, Navision will become a part of the Microsoft Great Plains Business Solutions division, significantly increasing the size and reach of this global business-applications team.

Building on the two companies’ complementary geographic and product strengths, the focus of the combined organization will be to develop and distribute technology that enables customers to realize an interconnected approach to business — faster and more affordably. Both companies strongly believe that this investment, and Microsoft’s continued investment in a powerful new .NET business application framework, will create new opportunities for partners to develop and integrate new solutions to help grow their businesses.

On the eve of the announcement, Doug Burgum, Microsoft senior vice president and leader of Microsoft’s Business Solutions team, spoke with PressPass about the acquisition, the benefits it will deliver to new and existing customers, and some of the opportunities the new entity will create for existing partners of both Microsoft Great Plains Business Solutions and Navision.

PressPass: How did Microsoft decide to acquire Navision?

Doug Burgum: Our decision to move forward with this acquisition was based on our shared vision. By joining forces, both companies enhance their ability to develop and deliver high-value business solutions that will enable organizations to integrate more effectively with their customers, partners, team members (employees), and suppliers. Our vision of the future is one where business solutions are seamlessly interconnected, where specific functionalities communicate across platforms and servers, across continents and cultures. Bringing these two companies together is a natural step, and in many ways Navision and Microsoft Great Plains have had parallel lives. Like us, their partner-centric approach focuses on the specific needs of small and mid-market businesses.

PressPass: What does this acquisition mean for customers?

Burgum: For starters, it means an increase in the value and choices available to customers. Weve already taken a step in that direction with the announcement of Microsoft Customer Relationship Management, and by joining forces with Navision we will be able to increase these new customer opportunities globally. Together, Microsoft Business Solutions and Navision will continue to strengthen, broaden and enhance the technologies that customers of both organizations have come to know and trust. In addition, this transaction assures Navision customers that as part of the Microsoft Business Solutions community, their current investments in technology are secure and will continue to be supported. They will have access to an expanded team that will supply them with the tools, products, services and support they need to remain competitive in a rapidly evolving global marketplace.

The Microsoft Great Plains Business Solutions group is well known for its partner channel. How will this acquisition affect that?

Burgum: This acquisition brings together two of the best partner-driven companies in the world Navision and Microsoft. Consequently, the partner channel is more important to us than ever, and were fully committed to working with partners worldwide to put the best possible solutions into the hands of our customers. Together, Navision and the Microsoft Great Plains Business Solutions group will also enable partners to build greater scale into business applications globally. By joining forces with Navision, Microsoft enhances its ability to grow the business application market faster through geographic and product line expansion. This will create new opportunities for partners to deliver additional products and solutions to small and mid-market customers.

PressPass: There seems to be an overlap between Microsoft Great Plains and Navision product lines. How are you going to address this and prevent customer and partner confusion?

Burgum: The geographic share and many aspects of the product lines are highly complementary. For example, 86 percent of Navisions business comes from Europe, and 80 percent of Great Plains business is in the United States. Our strategy for the future is to invest heavily in our .NET business applications while still serving existing customers of all product lines.

PressPass: How does Microsofts .NET strategy factor into the acquisition?

Burgum: By combining our talents and expertise, and guided by a shared vision for partner and customer satisfaction, we will speed up our ability to deliver on the promise of the Microsoft .NET value proposition on a global scale. This new venture brings an unprecedented opportunity to lead the industry in the development and delivery of customer solutions for an interconnected world. And as Steve Ballmer has mentioned, in his email, Business Solutions will be a catalyst and proof point for the value of the .Net .NET platform, just as Office was to the Windows desktop.

Microsoft and Great Plains recently marked their one1-year anniversary under one roof. What have you learned from that experience about making an acquisition a smooth process?

Burgum: I’m very proud of how Microsoft and Great Plains have come together in the past year. Team members at all levels of both companies really pitched in to make the effort a success, and they’re all to be congratulated. One of the most important and essential parts of an acquisition is clear, concise and consistent communication, and we all worked hard to focus on that up front. It says a great deal that the excitement and enthusiasm with which the acquisition announcement was received, still exists one year later. Our team members have embraced change and moved on aggressively. It’s also a great tribute to our executive team at Microsoft that the company has delivered on every promise it made to Great Plains on the day the deal was announced. Another thing that’s made the Microsoft and Great Plains combination such a success story is the integration of teams across areas such as development, sales and marketing. The energy and enthusiasm from everyone involved has made this work. Finally, strong leadership is absolutely essential. We have carried on the Great Plains tradition of “”leadership everywhere” ” and have encouraged each and every team member to get involved, be accountable, and ask questions. At the end of the day, everything we do is about improving the lives and business success of our customers and partners. Keeping that at the forefront will be key to our continued success.

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