Microsoft has paid an undisclosed amount to acquire a retail point-of-sale software company, Sales Management Systems (SMS), in hopes of making its Great Plains business software more appealing to retail businesses. SMS sells software that lets stores use desktop PCs as cash registers while simultaneously tracking inventory and controlling pricing, among other functions. The acquisition will help Great Plains compete against Intuit, which also sells a point-of-sale application. It also fits into a larger Microsoft plan to link retailers with distributors and manufacturers and gives Microsoft 360 new channel partners.

Point-of-Sale, Explained

Broadly defined, point-of-sale (POS) technology is any technology that enables retail stores to record customer transactions. Two decades ago, standalone cash registers, which simply recorded each transaction on a piece of paper, were considered POS technology.

Today, however, POS systems can perform many other functions, such as tracking inventory and cashiers' time, and they might consist of multiple registers or terminals linked to a central server and integrated with accounting and data-mining applications. Generally, value-added resellers (VARs) assemble POS systems from widely available hardware and software, then tailor them for a specific industry, customer, or store.

Many POS systems employ a "dumb" device, such as an electronic cash register or character-based terminal, at each checkstand. Within the last decade, however, PCs have become inexpensive enough to serve in this capacity. Systems based on PCs tend to be more reliable, as cashiers can still log sales even if the network or central server goes down. These systems are also easier to upgrade (e.g., to add the ability to read customer "loyalty" cards) and have a more flexible and customizable interface, which eases cashier training.

SMS Offers PC-Based POS Software

Based in Anaheim, CA, SMS sells a line of PC-based POS software called QuickSell. The company has only 20 employees, but claims that QuickSell has been installed in 14,000 locations in 55 countries around the world; its main customers are specialty merchandisers (such as hardware stores and auto dealerships), convenience stores, and independent retailers. SMS was able to achieve this large market because it sells QuickSell exclusively through 360 VARs, who take care of installation and support. Its competitors include RTI (Retail Pro) and CAM Commerce (Retail STAR, Retail ICE), among many others.

The QuickSell line includes the following three products:

QuickSell 2000 is for stores with one to ten PC checkstands, and it can control pricing, track inventory, log cashiers' time, print labels, and perform other functions. One checkstand PC (generally the least-used) simultaneously serves as the "master station," storing data and enabling users to manage the system and print reports. QuickSell 2000 can also export data to specified accounting programs running on the master station—QuickBooks, PeachTree, and MYOB Plus are currently supported.

QuickSell Commerce is recommended for stores with between 10 and 100 PC checkstands. It includes all of QuickSell 2000's functionality, and adds role-based security (e.g., allowing managers but not cashiers to change prices in the database); shipping management (including integration with the FedEx and UPS Web sites); and marketing functions—for example, a second display can be added to each PC checkstand to show the customer information from a CD-ROM, DVD, or Web site. QuickSell Commerce uses the Microsoft Data Engine (MSDE, a desktop version of SQL), so a dedicated desktop PC can be used for managing the system and storing data. However, SQL Server is recommended for larger installations.

QuickSell HQ is used to manage QuickSell Commerce installations in multiple outlets, offering centralized pricing control (e.g., the ability to set a discount and "push" it out to all stores at the same time), inventory tracking, customer profiling, and many other features. Like QuickSell Commerce, it uses MSDE and can be run on a desktop PC; however, MSDE is limited to databases of about 2GB, so this is not generally recommended for larger organizations.

Goal: Sell Great Plains to Retailers

Beginning in the third quarter of 2002, QuickSell Commerce and HQ (but not QuickSell 2000) will be sold with Great Plains' existing Small Business Manager (SBM), a server-based accounting and business management product for businesses with fewer than 50 employees. A batch interface will allow users to transfer sales data from QuickSell to the SBM general ledger with "a couple mouse clicks," according to Brendan O'Meara, Microsoft's product unit manager for retail business solutions.

In the first half of 2003, Microsoft will more tightly integrate QuickSell with SBM and the other server products in the Great Plains Dynamics and eEnterprise lines, allowing companies to synchronize other data such as customers, products, and employees, for example. Integration is not currently planned for Great Plains' Solomon line, which uses a different code base and has fewer dedicated resellers, and integration with the recently acquired Navision product lines will come at a later date. (For background, see "Navision Deal Continues Move into Business Applications" on page 5 of the June 2002 Update.)

In the near-term, integrating QuickSell will help Microsoft sell Great Plains applications, as well as related software such as Windows and SQL Server, to retail stores and chains. In fact, many Great Plains resellers were clamoring for a POS solution to help them compete against Intuit, which sells a branded version of PTI's Retail Pro in addition to its better-known QuickBooks accounting software.

But a larger strategy is also at work. According to O'Meara, QuickSell will play an important role in Microsoft's plans to build a line of supply chain management software and online services that enable three types of businesses—manufacturers, distributors, and retailers—to exchange data with one another.

Great Plains currently appeals primarily to distributors. The May 2002 purchase of Navision added support for manufacturing. With QuickSell, Microsoft can now sell Great Plains into all three segments. The next logical step is to link all three product lines together with an online service which Microsoft has tentatively dubbed the Microsoft Business Network (MBN). For example, QuickSell HQ could inform a retailer that supplies of a certain product were low; the retailer could then turn to the MBN to find a distributor who had that product in stock or contact the manufacturer directly. Microsoft gave a brief demonstration of the MBN at the Great Plains Convergence conference in Mar. 2002 but will not release more details about it until Sept. 2002.

What Happens Next?

In addition to the Great Plains integration, Microsoft says it will continue to offer all three QuickSell applications on a standalone basis and will continue to support existing installations indefinitely.

Fourteen of SMS's 20 employees will join the Business Solutions Group in Redmond, WA, and all 360 SMS resellers will become Great Plains channel partners.

For more details on SMS and its products, see www.quicksellsupport.com.