Microsoft Details 'Project Green' ERP Convergence Strategy

by Alex Woodie

At its Convergence 2005 conference in San Diego Monday, Microsoft unveiled its ERP product roadmap, including details of its "Project Green" initiative to gradually unite the five core products sold through its Microsoft Business Solutions division. Project Green will be delivered across two waves, the first of which has already begun. Microsoft also announced a new five-year support policy for all MBS products, replacing the previous three-year support policy.

While Windows Server 2003 operating system continues to make great gains in market share and is the basis for many enterprise software roll-outs, Microsoft's MBS unit has been struggling to gain respectability and its share of the cut-throat enterprise application market, where Microsoft is still a bit player compared to the likes of SAP and Oracle. MBS' influence is also small compared to IBM's still-formidable iSeries business application channel, in which it recently pledged to double ISV spending, a direct retaliation against Microsoft's Midrange Alliance Program.

Microsoft as a whole set revenue and profit records for the last quarter, but the MBS segment grew revenues only five percent, to $206 million, and its net loss grew to $23 million. This puts MBS' annual run rate at less than $1 billion, which is about the size that iSeries ERP juggernaut J.D. Edwards was before it was acquired by PeopleSoft in 2003, and thereafter played the pawn in the high-stakes battle of wills between PeopleSoft and Oracle, which Oracle won, of course.

Against this backdrop of ERP vendor instability and industry consolidation, Microsoft unveiled more of its plan for gaining ERP respectability at Convergence 2005 this week. The ERP product roadmap combines many elements, including writing major new releases of each of the core MBS suites (Axapta, Great Plains, Navision, Solomon, retail POS, and CRM); delivering the first two phases of Project Green, including deepening integration with other Microsoft products (in particular Office, SQL Server, and the next generation "Longhorn" Windows OS); working more closely with MBS partners; and extending product support timelines.

Project Green

Microsoft this week hashed out some of its plans for Project Green, which Microsoft is billing as the "next generation" of MBS products, but which is really more about uniting its disparate ERP product lines over time.

Microsoft announced that the first wave of Project Green development efforts will extend from 2005 to 2007, and will include the delivery of a common user interface that's based on 50 common and configurable roles that people often play in a company. While it may seem obvious, Microsoft's research has found that workers benefit from having a user interface that's tailored to the role they play in the organization. Delivering flexible user interfaces on these common roles, across five or more MBS products, using Web services and a service oriented architecture (SOA) is expected to provide a major boost for MBS among small and midsized organizations.

Other aspects of this first wave include integration with the next release of Microsoft productivity suite, Office 12, and a common reporting package based on SQL Server Reporting Services package. Users will have the ability to interact with all these, and collaborate with each other, through a common SharePoint Portal Server product.

Plans for the second release wave, which Microsoft says will begin shipping in 2008, are a little less detailed. Microsoft says the second wave will build on the first wave's innovation and apply a "model-driven approach to business processes." More specifically, Microsoft says to expect new innovations based on WinFX (which is composed of the new presentation subsystem, codenamed "Avalon," and the new communication subsystem, codenamed "Indigo," to be delivered in the Longhorn OS) as well as Visual Studio .NET.

MBS Product Roadmap

During his keynote address Monday, senior vice president of the MBS Business Group at Microsoft, Doug Burgum, revealed that Microsoft has expanded the company's commitment to support each new product release. Instead of a three-year support commitment, Microsoft has committed to supporting each product release for five years after it first ships.

Further, Microsoft announced that all of the MBS products will be supported through 2013--which may allay some people's fears that Microsoft will cut one of its ERP suites loose, as the rumor mill has it. Users will have access to online self-help support for each product for about eight years, Microsoft said.

Microsoft also unveiled its updated product roadmap for the next 18 months:

• Delivery of Axapta 4.0 beta is tabbed for the fourth quarter of 2005, with GA in the first half of 2006. Axapta 3.0 Service Pack 4 is scheduled to arrive in the second quarter of 2005.
• Great Plains 8.0 Extensions should arrive in the first quarter of 2005, and Great Plains 8.5 in the fourth quarter of 2005.
• Navision 4.01 will be introduced in the third quarter of 2005.
• Solomon 6.5 will GA in the fourth quarter of 2005.
• The next version of CRM is due in the fourth quarter of 2005.
• Microsoft Business Solutions for Analytics-Forecaster Version 7.0 is slated for GS in the third quarter of 2005. The integration of Microsoft Business Solutions for Analytics--FRx 6.7 with Navision 3.0 and Navision 4.0 is expected in the first quarter of 2006. And the introduction of Microsoft FRx 7.0 comes due in the first half of 2006. Forecaster 8.0 follows in the second half of 2006.
• The next-generation point-of-sale (POS) solution, Retail Management System, is promised in the second quarter of 2005.

Channel Tweaks

Microsoft also announced it will be making some changes to its MBS partner strategy, including aligning its business partners with solutions for vertical industries. The company wants 50 percent of its current partners assigned to one of 14 verticals, such as manufacturing, distribution, public sector, and services by the end of fiscal 2006.

In support of this vertical approach with its partners, Microsoft committed to training 800 MBS workers to help these partners with demand generation, advertising, sales support, and lead management in their allotted vertical. Other vertical-centric tools the partners will get from Microsoft are an improved map of partner solutions, which will include things like the total count of business entities in a given geographic region and industry and vertical purchase rates, and a Web-based Solution Finder tool, to debut in the second half of this year, that will help partners find the right financial management, supply chain management, and CRM solutions.

Finally, Microsoft unveiled its Industry Builder initiative, which will debut for the Axapta ERP suite, and be rolled out for other ERP packages later this year. The Industry Builder program will basically enable customers of select ISVs to sign a single Microsoft support contract that applies to both the MBS core modules, as well as the vertical application modules developed by the participating ISV.

ISVs will need to meet certain minimum standards set by Microsoft before they will be allowed into the Industry Builder program. Their applications must also pass Microsoft' tests for code quality standards. Early participants in the program include Manhattan Associates, one of IBM's top partners in the supply chain planning software industry, process ERP developer Fullscope, and foliodev, an Axapta service provider.

Program participants can develop in X++, the Microsoft Axapta native development language, or any other language, Microsoft says.

"Ultimately, the Industry Builder initiative will provide customers with a more complete solution while also giving our partner community a more powerful means to compete with other software vendors," says Mark A. Jensen, general manager of Microsoft Axapta.