Q&A: Microsoft Outlines Strategy for Providing Full Range of Business Management Solutions for Companies As They Grow

REDMOND, Wash., Nov. 5, 2004 – Microsoft today announced a new edition of Microsoft Office for small business management that is scheduled for U.S. availability in late 2005. This new offering adds to the set of business management applications that Microsoft offers companies throughout their entire lifecycle.

The fully integrated solution designed for small companies includes Microsoft Office 2003 programs along with an updated version of Microsoft Office Outlook 2003 with Business Contact Manager and the new Microsoft Office Small Business Accounting an easy-to-use program that delivers all of the basic financial management functions in a familiar Office interface. As businesses evolve and grow, and their needs become more complex, Microsoft offers migration options for customers across its portfolio of business management applications, including Microsoft Business Solutions, designed for organizations of varying sizes and business management needs.

To learn more about how today’s announcement fits into Microsoft’s broad set of business applications, and how they can meet the needs of companies across their business lifecycle, PressPass spoke with Dave O’Hara , vice president small business, Microsoft Business Solutions:

PressPass: Today Microsoft announced that it will deliver a new version of Microsoft Office for small business management next year that will include a new financial management offering and enhanced contact management for small companies. How does that fit into Microsoft’s current range of business management solutions?

O’Hara: The product announced today will strengthen Microsoft’s lineup of business-management solutions. Our strategy is to approach product development across a customer lifecycle from the smallest of businesses up to divisions of large organizations. The stage a company is at in its lifecycle determines its business management needs. Microsoft offers a broad range of business solutions that customers can upgrade to as they grow and their businesses or process needs become larger or more complex.

In terms of how the new product fits in with current offerings, we think of it as the component for smaller companies that completes a full-range set of technology and services developed specifically for organizations of varying sizes.

PressPass: How do businesses that use business solutions and specifically financial management applications typically evolve? And how do the products and services offered by Microsoft accommodate an organizations evolution?

O’Hara: There are probably as many business evolution scenarios as there are businesses, but here is an example. A savvy young business woman launches a gourmet tea business, purchasing and reselling highly specialized types of tea. It turns out that there is indeed a demand for specialized tea, both as gifts and for general consumption. As the business expands and she moves out of her home office and starts hiring her first employees, the founder purchases the new edition of Microsoft Office for small business management. This product includes Small Business Accounting for basic accounting functionality, inventory management, job tracking, and reporting to help her manage all aspects of her business finances. Outlook with Business Contact Manager helps the founder and employees of the tea company maintain effective relationships with customers and trading partners, while access to online services including payroll helps her tea business better deal with growing pains as it continues to add employees. A few years later the business has two retail stores, a catalog and an enhanced Internet presence. With 45 employees, 10 of whom work in the finance department, the business needs more depth of functionality and customization from a certified business partner in order to accommodate the needs of the business. Microsoft Business Solutions Small Business Financials North America Edition, formerly called Microsoft Business Solutions Small Business Manager, will provide the business at this stage with more robust financial management and functionality for fixed assets, payroll, distribution and financial reporting which are critical to a business at this point.

Over the next three years the tea business experiences dramatic growth in its local market and on a national level with the catalog and Internet sales. By this point there are approximately 90 employees. While the number of employees who use the financial management system remains the same, the business needs have expanded. To accommodate that need, the tea business upgrades to the standard edition of Microsoft Business SolutionsGreat Plains, one of the four business-management offerings available from Microsoft for midsized organizations. These products include a deeper level of financial management functionality plus supply-chain management, which will help the growing business better manage relationships with the suppliers it now works with around the globe. Microsoft Great Plains also includes integration with Microsoft CRM for a more sophisticated means of managing sales, customer service and marketing relationships with customers.

Finally, the tea business which not so long ago was a one-person, home-managed operation adds more stores, more employees and more business via the catalog and the Internet. When the tea business reaches 230 employees, its IT infrastructure undergoes a dramatic change. At this point the company upgrades to a professional edition of Microsoft Great Plains, Microsoft Navision, Microsoft Solomon or Microsoft Business SolutionsAxapta. These solutions include robust financial management capabilities and fully integrated supply chain and customer relationship management functionality and can be customized by partners to meet the unique teas of the specialty tea company, including how it manages relationships with suppliers and customers in multiple countries, languages and currencies, inventory and payroll for a growing staff that consists of full-time and part-time employees, permanent and temporary and hourly and salaried wage earners.

This tea business, while hypothetical, illustrates how Microsoft offers companies the technologies and services tailored to their needs as they move through different stages in the customer lifecycle.

PressPass: How will businesses know when a solution like the upcoming edition of Microsoft Office for small business management is best for them, or when they should consider another solution, whether for financial management or customer relationship management?

O’Hara: That decision depends on what a company needs in their business management applications. There are several factors that play into an organizations decision process. These factors can include the size of the business, the complexity of the processes it employs, its industry focus, the need to share data across an organization, market conditions and growth goals. Microsoft has a broad range of applications and services developed for organizations with a wide variety of needs and challenges as well as other variables, such as the company’s IT infrastructure and its budget.

To provide technology and services that meets customer needs now and as they grow, we continue to develop and extend a robust set of business-management solutions tailored to organizations of different sizes, in different industries and in different geographies. Our broader strategy is to work with partners of all sizes and types to redefine business management for our customers. Microsoft is making deep investments in this area with the goal of helping small and mid-size businesses and divisions of larger enterprises become more efficient and better serve their customers through technology.

PressPass: Why did Microsoft change the name of Microsoft Business Solutions Small Business Manager to Microsoft Business Solutions Small Business Financials North America Edition?

O’Hara: We wanted the name to truly reflect the solution being offered. After extensive consultation with our customer base, we selected the term “Financials” because it resonates with our target audience. Customers told us that Financials is a term that accurately represents the depth and breadth of functionality included in the solution, and aligns more closely with other Microsoft Business Solutions offerings. We want our customers to clearly understand that Microsoft offers business management solutions that meet the requirements they have for running their operations on a day-to-day basis. In terms of Microsoft Business Solutions Small Business Financials North America Edition, were offering robust operational functionality that includes advanced inventory management, sales order processing and financial reporting. It is highly customizable through our network of partners, which makes the solution particularly appealing for small businesses that have select needs.

PressPass: What role do business partners play in delivering business-management solutions?

O’Hara: By providing more choices for our customers, we are providing more opportunities for our business partners. Our customer-lifecycle model guides partners and our mutual customers through the process of how a companys IT infrastructure and applications needs change and grow as its organization grows or processes become more complex. Thats good news for our business partners, who work closely with customers to manage how their applications needs change along with their organizational change. We have a robust community of partners around the world working with our business applications portfolio today, and with the upcoming release of the new edition of Microsoft Office for small business management, our community of independent software vendors (ISVs) and value-added resellers (VARs) will have even greater opportunity to work with smaller businesses as they customize the solution to meet their needs.

PressPass: This new edition of Microsoft Office appears initially to be available only in the United States. What about customers outside the U.S.?

O’Hara: This product will be a U.S. offering only at this time. However, Microsoft Business Solutions applications are available in more than 132 countries around the world today. We are currently evaluating similar small-business offerings for countries in the Europe-Middle East-Africa (EMEA) region, but at this time there are not definite plans that can be announced. In terms of other Microsoft Business Solutions applications, we’ve determined geographic availability based on what works best for our customers and business partners. Specific to businesses in Denmark, C5 is the recommended solution for small business financials both now and in the future. We’ve communicated with ISVs outside the U.S., and their consistent feedback is that they are enthusiastic about the opportunity ahead to offer their customers a new and compelling solution to offer.

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