Microsoft Makes its Mid Size Business Move

by Alex Woodie

Microsoft last week unveiled details about its plans to tackle the underserved mid size business software market during the first annual Microsoft Business Summit. The key deliverable will be "Centro," a bundle of system and application software modeled after the Small Business Server product line, but aimed at medium size businesses. Executives also unveiled a new plan to unite Microsoft's ERP and CRM product lines under a common framework, which it is calling "Microsoft Dynamics."

Chairman and chief software architect Bill Gates introduced the company's new plan to unite the ERP and CRM applications it sells through the Microsoft Business Solutions division, including its Microsoft CRM, Solomon, Great Plains, Navision, and Axapta software suites. The new name, Microsoft Dynamics, replaces the old Project "Green" plan to bring the ERP apps into a common code base.

Under Microsoft Dynamics, the company's ERP and CRM offerings will be better connected to Office productivity applications, SQL Server business intelligence, the SharePoint portal, and Visual Studio, as well as new search capabilities Microsoft is building into Windows.

Microsoft also plans to deliver a common user interface across the Dynamics-era products. This interface will be flexible enough to handle all the different roles that people have in mid size organizations. "We envision shipping 50 or more role-based pages out of the box when we ship this next generation version of Microsoft Dynamics," David Dennis, manager of the Solomon unit of MBS, said at the Microsoft Business Summit last week.

Gates said Microsoft plans to start delivering the Dynamics products, including Dynamics GP (for Great Plains), Dynamics AX (for Axapta), Dynamics NAV (for Navision), Dynamics SL (for Solomon), and Dynamics CRM in the 2006-2007 timeframe.

Some of the underlying technologies for the Dynamics CRM product--which is apparently becoming the crux of the Dynamics product line--are already being developed, Gates said, adding that Dynamics is receiving a high priority. "We've got record R&D," he says. "It's to move along this roadmap absolutely at full speed."

Centro

Microsoft chief executive Steve Ballmer also talked about the upcoming release of Centro, an integrated suite of Windows and application software targeted at mid size companies, which Microsoft defines as having between 26 and 500 desktop PCs.

Ballmer said the mid size customer is perhaps the least well-served customer in terms of IT, and is characterized by IT generalists who are called upon to work with too many different products. "If you only have five people on an IT staff, or six people, how can they possibly understand 10 server products and 20 client products?" Ballmer said. "The midmarket customers [are] challenged by complexity and scale to find solutions that are very appropriate."

Microsoft has had great success over the last few years selling Small Business Server to small businesses. However, Small Business Server is restricted to running on only a single server, and many mid sizes businesses run more than a single server. Bog Muglia, Microsoft Windows Server chief, says Small Business Server works pretty well up to the 75-user mark.

To help reign in complexity for mid size businesses, while still helping them scale beyond the capabilities of Small Business Server, Microsoft plans to release a bundle of pre-integrated software. Currently known by its codename, Centro, the bundle will include the Windows Server "Longhorn" operating system, Microsoft Exchange Server version 12, and a new integrated management console that combines elements of its Microsoft Operations Manager (MOM) and System Management Center. Like Small Business Server, Centro will include a simplified setup and licensing process, and will cost less than if customers bought the components separately.

Earlier this year, Microsoft unveiled a special program that is the precursor to Centro, called the Windows Server System Solution for Midsize Businesses, which combines Windows Server 2003 Standard Edition, Exchange Server 2003 Standard Edition, and Microsoft Operations Manager (MOM) 2005 Workgroup Edition and 50 client access licenses (CALs). This package's price tag of $6,400 is about 20 percent off the cost of buying the products separately.

Ballmer also touched on how Microsoft will interact with mid size customers. He said the company will strive to have "relatively personalized relationships" with its mid size Centro customers' businesses, compared to "very personalized relationships" demanded by enterprise customers, and no personalization for small businesses.

Microsoft has been working with a number of mid size businesses to hash out the requirements. Ballmer says the company has plans to start the beta testing process. Centro is currently slated to ship after Longhorn Server, which is due in early 2007.