|Business Solutions Roadmap 2004|
|Feb. 16, 2004|
Incremental releases across the Microsoft Business Solutions (MBS) product line in 2004 will improve features, further integrate the MBS portfolio with other Microsoft products, such as Office, and offer better integration among MBS products. Microsoft hopes these changes will retain existing customers of mature MBS products, spur uptake of recent product additions, offer new opportunities for partners, and drive sales or upgrades of products such as Office 2003 in some 260,000 MBS customer accounts.
However, little effort will be made in 2004 to consolidate overlapping MBS product functions. In fact, many products will receive updates in similar feature areas, such as manufacturing and distribution capabilities. In addition, customers will not see sweeping technology or architecture changes in the product line: for example, only the Microsoft Business Portal will shift to the .NET platform. Farther-reaching plans to consolidate business management functions on a common technology and code base are part of a future (beyond 2004) project, code-named Project Green.
Broad Product Portfolio
Microsoft entered the business management software market for small and mid-size companies with the acquisition of Great Plains in Dec. 2000. Since that time, through a combination of continued acquisitions (including Navision in July 2002) and in-house development, it has compiled a broad spectrum of business applications that help companies manage finances, control internal processes, and deal with customers and trading partners. Equally important, these acquisitions have helped Microsoft build an impressive list of partners (in North America and Europe) that gives the company a valuable channel for selling these applications, and other Microsoft platforms and applications, to small and mid-sized businesses.
The company considers business management software in the small to mid-size market space a critical opportunity for several reasons:
ERP Products the Core
The core products in the MBS product portfolio, gained in the Great Plains and Navision acquisitions, perform financial accounting, manage inventories, track intercompany transactions (such as orders and payments), and manage other company resources such as personnel. Collectively, the functions these applications provide are referred to as enterprise resource planning (ERP).
MBS has organized the brands it acquired into four core product lines: Axapta and Navision, acquired from Navision, and Great Plains and Solomon, acquired from Great Plains. Each product line consists of modules that can be purchased in various sets. The Great Plains, Navision, and Solomon product lines also come in "Standard" Editions that feature fewer modules and are meant for smaller installations with 10 or fewer users. MBS also offers Small Business Manager, based on Great Plains, for very small businesses.
Although functionally similar, the product lines differ in target markets and functional emphasis. Navision and Axapta are stronger in Europe, Great Plains in North America, for example. Great Plains puts more emphasis on financial accounting functionality, and Solomon is more focused on project management and accounting.
Despite Microsoft’s efforts to differentiate products and simplify branding, customers and resellers still face a confusing landscape of products. This landscape could become increasingly difficult to navigate as Microsoft steps up efforts to establish the MBS brand globally in 2004—an effort that could help add new customers but blur what was previously one of the most obvious ways to differentiate the group’s products: their distinct geographic focus.
(An overview of the MBS ERP product lineup is found in the sidebar "MBS Core ERP Products".)
Rounding Out the Portfolio
Since purchasing Navision and Great Plains, Microsoft has pursued in-house development and further acquisitions to round out the base capabilities provided by the four ERP systems as follows:
Although most newer MBS products do not require one of the ERP offerings to work, Microsoft continues to improve integration between the two groups of products to better position itself as a one-stop shop for business software. This could appeal to small and mid-size companies looking for a single software vendor to solve their business management problems. It also creates new opportunities for partners: they have additional products to sell and integrate into their existing MBS accounts.
(An overview of MBS products outside the core ERP product line is found in the sidebar "Other MBS Products".)
Leveraging the Microsoft Brand
Since the acquisitions of Great Plains and Navision, Microsoft has taken a gradual approach to integrating MBS products with traditional Microsoft products, such as Office and SQL Server, with the following purposes in mind:
Conversely, Microsoft has avoided integrating products where it could cause customer consternation: for instance, by default, Navision uses a proprietary database system, not SQL Server (although the product can work with SQL Server). In addition, Microsoft has not indicated where (or whether) it will use the recently released (Jan. 2004) SQL Server Reporting Services in the MBS line. However, supplementing financial reporting capabilities in the core ERP products—using Reporting Services for automated report distribution, for example—seems an obvious possibility.
Although full details have yet to surface, the selective approach to integration will most likely continue in 2004.
Products Improve Incrementally
MBS appears to be making no sudden moves in its product strategy for 2004. Unlike more traditional Microsoft teams such as Windows and Office, which tend toward long quiet stretches between monumental product releases, MBS uses a more incremental approach: most products in the MBS line have one or more releases in the works for 2004. These releases will contain targeted feature improvements as opposed to the sweeping functional and architectural changes made in an Office or Windows release. In addition, MBS customers generally purchase support or maintenance plans with their software that cover the cost of these incremental releases.
Specifically, MBS’s approach in 2004 is designed to accomplish the following:
(For a quick look at the 2004 roadmap for MBS, see the illustration "MBS Roadmap at a Glance".)
Core ERP Features Step Forward
The second half of calendar year 2004 will see updates of the core MBS ERP systems, relatively mature products that have all been in the market for more than five years. As it has done in the past, MBS will make the new Great Plains, Navision, and Solomon releases available at the same time as their respective Standard Editions.
Although specific details are still emerging, Microsoft has hinted at the following highlights in 2004:
Great Plains 8.0, expected in the third quarter of 2004, will contain over 100 feature enhancements focused primarily on giving users better access and control of financial data and improving the efficiency of certain common business processes. For example, the product’s letter writing assistant, which works with Word, will make it easier to identify and select specific customers for targeted mailings such as promotional offers. Microsoft has also indicated it will enhance Great Plains’ manufacturing and distribution management capabilities, although it has not released details.
Solomon 6.0, expected in the third quarter of 2004, will see improvements in the product’s already strong project management features. Specifically, users will have more granular control of resource assignment in the Project Controller module, which could help project managers more accurately determine resource availability and track and manage project costs. Other improvements are aimed at government contractors and construction companies. For example, Solomon 6.0 will add capabilities that help contractors comply with government accounting regulations and improve product support for American Institute of Architects invoice formats, which are frequently used by construction companies. The release will also step up Solomon’s distribution capabilities—Solomon 6.0 will make it easier for companies to create invoices for orders with complex shipping requirements, such as those involving multiple shipping companies.
Navision 4.0, also expected in the third quarter of 2004, will focus largely on operational improvements. Microsoft has suggested that customers will get user interface improvements, overall improvements in product performance, and easier setup and installation. (Particulars have not yet been discussed.) In addition, customers will see better XML import and export capabilities in Navision 4.0.
Axapta 4.0, expected toward the end of 2004, will offer enhanced functionality for manufacturing and for project and service management. For example, Axapta 4.0 will introduce a new service management module for manufacturers that offer on-site service operations at customers’ sites. Combined with improvements in Axapta’s project accounting module, the new module will help manufacturers schedule and track the costs of on-site installation, repair, and maintenance services. In a further effort to strengthen its project management capabilities, Axapta 4.0 will be integrated with Project 2002 and 2003. A new expense module will help companies better account for employees’ travel and other expenses accrued during field service calls.
In addition to the aforementioned updates, the Great Plains, Navision, and Solomon Standard Editions are being updated to run on Small Business Server (SBS). SBS offers SQL Server and other potentially useful servers such as Exchange. (For more information on SBS, see "Microsoft Luring Small Businesses to Servers" on page 19 of the Nov. 2003 Update.) Because of its relatively low cost and simple infrastructure requirements (SBS runs multiple server applications on a single physical server, simplifying setup and ongoing management), SBS is a good option for smaller MBS customers with limited budgets and IT skills that have other technology needs (such as a mail server), and that want a more full-featured server for business data storage.
Finally, in Oct. 2003 Microsoft announced Demand Planner, a new tool for forecasting demand. Demand Planner was made available to customers of Axapta and Navision in Dec. 2003 (for an additional license fee); Great Plains customers will be able to license the tool in the first quarter of 2004.
Other Product Updates Planned
MBS is also updating most of the other products in its portfolio in 2004:
MSCRM. With the Dec. 2003 release of MSCRM 1.2, Microsoft addressed some of the deficiencies in its customer relationship management software. Further integration with the MBS line and an international push could help spur sales.
In the first quarter of 2004, MSCRM 1.2 will support integration with Great Plains 7.5 and Solomon 5.0 and 5.5. (The initial release of MSCRM 1.2 integrates only with Great Plains 7.0.) Also in the first quarter of 2004, Microsoft will make MSCRM available worldwide in Brazilian Portuguese, Danish, Dutch, French, German, International English, Italian, and Spanish.
The next major release, MSCRM 2.0, is slated for the first quarter of 2005. Support for multiple currencies and international tax calculations will make that product more attractive to companies doing business in more than one country. MSCRM 2.0 will also integrate with Navision.
Microsoft Business Portal (MBP). MBP, Microsoft’s solution for browser-based access to Great Plains and Solomon data, may get two 2004 releases. MBP 2.0, announced in Jan. 2004, brings the product’s underlying technology in line with Microsoft’s most recent portal technology—Windows SharePoint Services (WSS). Initial versions of MBP were built on Microsoft’s aging Digital Dashboard Resource Kit, which uses Web Parts based on Active Server Pages technology rather than the newer ASP.NET. Along with the increased security, performance, and stability inherent in ASP.NET-based Web sites, moving to WSS gets the MBS group on track with the rest of Microsoft, whose corporate portal strategy is based on WSS. Features in MBP 2.0, however, will be largely the same as those in MBP 1.2. (For more information on MBP 2.0, see "Business Portal Moves to WSS".)
A second MBP release, likely available in the third quarter of the year, will add several new features on the improved base technology. For example, it will streamline common processes such as requisitioning equipment or services. This second release will also have a new self-service application for project management, adding to the human resources self-service application that shipped with MBP 1.2 in Aug. 2003. However, MBP will continue to be a Great Plains- and Solomon-only solution: Navision and Axapta ship separate business portal functionality and will continue to do so for at least the remainder of 2004.
Microsoft Business Network (MBN). A new version of MBN is slated for release in the second quarter of 2004 and will likely address two of the most obvious weaknesses of the product’s first version: lack of a browser-based interface for sending and receiving business documents, and integration with Electronic Data Interchange (EDI) systems. Today, MBN consists of a combination of on-site software and a Microsoft-hosted application; users interact with these components using Outlook 2003 and Excel 2003. Allowing browser-based access to the MBN could inspire smaller suppliers to join the network by allowing them to participate without upgrading to Office 2003 or installing the on-site components required for MBN 1.0. EDI support is critical to gaining support for MBN among mid-size manufacturers and distributors, who use EDI-based trading networks extensively.
Although MBN support for Axapta, Navision, and Solomon is on the drawing board, it will likely wait until 2005.
Microsoft Business Solutions for Analytics—FRx. FRx works with Great Plains and Solomon today, and starting in the first quarter of 2004, it will integrate with Axapta, addressing weaknesses in that product’s financial reporting capabilities. The integration will allow, for example, businesses to use FRx to directly access the Axapta general ledger for detailed financial analysis and reporting. MBS will make Axapta integration available initially in North America, the United Kingdom, and Australia and follow with additional countries later in 2004.
The next version of the FRx reporting software, FRx 6.7, is expected in the first quarter of 2004. It will add features that help users build report books containing collections of Excel, Word, and PowerPoint documents related to a specific reporting event, such as a quarterly executive financial review. In addition, FRx 6.7 users will be able to automatically generate Excel pivot tables based on FRx reports, giving them a familiar and powerful interface for analyzing financial data. These new capabilities will translate into benefits for Axapta, Great Plains, and Solomon customers in the third quarter of 2004 when FRx 6.7 is integrated with them.
Microsoft Business Solutions for Analytics—Forecaster. Although Microsoft has not signaled a new version of Forecaster, a Web-based budgeting tool, the product will better integrate with the MBS ERP line in 2004. For example, Forecaster’s wizard-based ExpressLink will allow automatic import of general ledger data from Navision or Axapta, a capability that has been available for Great Plains and Solomon.
Retail Management System (RMS). Although details are sketchy, minor updates are in the works for the RMS point-of-sale software. RMS 1.2 will be available in French, German, Italian, and Spanish in the second quarter of 2003. In addition, an incremental release (RMS 1.3) is slated for the second quarter, but Microsoft has not hinted at what that release will contain or when a more significant release (RMS 2.0) will appear.
Consolidation Still in the Future
Although Microsoft has made efforts to simplify branding and differentiate MBS products since acquiring Great Plains and Navision, there remains considerable functional overlap in the portfolio. The group will not do much to reduce overlap in 2004, deferring this work to a longer-term effort called Project Green. Project Green will introduce a new set of entry-level business management applications using the forthcoming Microsoft Business Framework platform and tools, which will be built atop the .NET Framework. Although Project Green will ultimately simplify the product lineup and enable Microsoft to tightly integrate MBS products with the next version of the Windows desktop (code-named Longhorn) and other Microsoft applications, it could cause concern among existing MBS customers and unsettle MBS resellers who want to see continued investment in the current products.
The challenge for MBS is to maintain its existing customer base (and revenue streams) and to continue to create opportunities for its partners, the real key to the group’s future financial success, while it builds this next generation of business software. Microsoft has said it will maintain today’s MBS product lines through 2012. Although this is undoubtedly welcome news to those using and selling MBS products today, it implies a burden of inefficiency for Microsoft. The company will continue to employ multiple groups to develop, market, and support products with similar functionality and target markets. This burden will only increase as Project Green moves from drawing board to code development. Given that one goal of Project Green is to reduce costs and streamline the MBS product lines, there is a risk that Microsoft will decrease the attention given to the current MBS products once equivalent functionality is available from the Project Green products.
The MBS product line is described at www.microsoft.com/businesssolutions/default.mspx.
MBS ERP releases in 2003 are described in "Great Plains 7.5 Combines Products" on page 14 of the June 2003 Update, "Solomon Improves Project Management" on page 14 of the July 2003 Update, "Small Business Manager Updates Features" on page 9 of the Sept. 2003 Update, and "Navision Improves Modularity, User Interface" on page 24 of the Nov. 2003 Update.
Other MBS releases in 2003 are covered in "Portal for Business Solutions Applications" on page 13 of the July 2003 Update, "Business Network Improves Supply Chain Management" on page 22 of the Nov. 2003 Update, "FRx Forecaster Improves Budgeting Process" on page 11 of the Oct. 2003 Update, and "MSCRM Goes International" on page 10 of the Feb. 2004 Update.
Background on the MBS group’s longer-term plans for business management applications is in "New Generation of MBS Products Planned" on page 16 of the Dec. 2003 Update.