bCentral is eliminating its hosted financial management and Web-site creation offerings and will encourage customers to turn to Microsoft's Great Plains and FrontPage products for these functions. The move indicates that Microsoft is repositioning bCentral as a complement to its traditional software business, rather than as an all-in-one, small business e-commerce solution based on the application service provider (ASP) model. The company did not disclose how many small businesses will be affected.

Hosted Finance Solutions Not Trusted

By the end of Nov. 2001, bCentral will phase out Finance Manager, the accounting and financial management solution hosted online at bCentral. The businesses that paid US$30 a month to use Finance Manager will be encouraged to upgrade to Great Plains Small Business Manager (SBM), a packaged client-server accounting solution based on Great Plains' eEnterprise and Dynamics code base. SBM offers many more features than Finance Manager, but has a heftier one-time price tag of US$1,500 or more. bCentral does plan to offer SBM or some subset of SBM on a hosted basis, although pricing and details have not been announced.

With Finance Manager, bCentral joined many other ASPs in making an unwelcome discovery: businesses are reluctant to trust their finances to an externally hosted solution, fearing that unreliable connections and security risks will endanger confidential data. The decision to replace it with a Great Plains solution is not unexpected, given that bCentral was recently brought into the Business Solutions Group under the control of former Great Plains CEO Doug Burgum.

FrontPage Already Popular

In early Nov. 2001, bCentral will also drop Site Manager, which offered templates for businesses to create and make changes to a simple Web site. Eliminated with it will be Web Site Manager Custom, a limited-scale site design and consulting service introduced in Apr. 2001 that requires businesses to use Site Manager to make changes after their sites have been created.

The businesses that relied on these services will be encouraged to switch their sites to bCentral's Standard or Professional Web Hosting services and use FrontPage to build and maintain them. To soften the blow, bCentral is offering 100MB of hosting space (up from 40MB) and 20 e-mail accounts (up from one) in the US$30-a-month Standard Web Hosting package. The Professional package offers 200MB and 30 accounts for US$50 per month.

Businesses with larger budgets can turn to Great Plains eSell, which enables them to work with consultants to design a more complex e-commerce site. eSell starts at US$5,000 but is generally sold as part of a larger Great Plains package costing US$10,000 or more.

The decision to drop these services is more surprising than the elimination of Finance Manager. According to Microsoft, Site Manager businesses were reluctant to connect to the Internet every time they wanted to change their site. Site Manager's limited functionality may have been a factor as well: customers had to use FrontPage to make any changes to their site's HTML or to add any pages that had previously been created with FrontPage. As a result, many bCentral customers were already using FrontPage, rather than Site Manager, to design and alter the sites that bCentral hosted for them.

bCentral's Changing Role

bCentral had been positioned as the small business component of Microsoft's e-commerce strategy. Microsoft planned to use bCentral to promote key technologies such as the .NET Enterprise Servers (which provide back-end functionality for bCentral services), .NET Framework elements such as ASP.NET, and XML-based business-to-business Web services, while simultaneously capturing the elusive small business applications market.

Now that businesses have demonstrated their reluctance to use hosted solutions for core business functions, Microsoft will likely return to its traditional model of using packaged applications, particularly Great Plains and the Office family, to push key technologies into businesses of all sizes. bCentral will certainly continue to use the latest Microsoft technologies to provide logical services, such as Web site hosting, but its more esoteric hosted offerings, such as customer relations management and the ability for businesses to post e-commerce catalog items to Web marketplaces, will almost certainly be absorbed into traditionally packaged applications, and might be eliminated from bCentral at that time.

Resources

For more information on Great Plains and its relationship to bCentral, see "The Role of Great Plains at Microsoft" on page 10 of the Sept. 2001 Update.

For background on the Office family, see "Office Becoming Client for .NET" on page 21 of the Aug. 2001 Update.

bCentral is at www.bcentral.com.