The purchase of software from business-management solutions provider Encore Business Systems adds public sector accounting features to Great Plains and plugs feature gaps that made Great Plains a tough sell to universities, government entities, and nonprofit organizations. The acquisition includes several modules in the Encore Not-for-Profit series and two other Encore modules that Microsoft already bundles with Great Plains today. The new accounting capabilities will be available in Great Plains 8.0, scheduled for release in the third quarter of 2004.

Encore is a systems integrator that specializes in developing custom solutions on Great Plains and Small Business Manager. It also sells software solutions and tools that integrate with Great Plains; for example, Encore offers a mass billing tool that builds on Great Plains’ invoicing features.

The Encore modules that Microsoft is acquiring provide accounting features required by many North American public-sector entities: for example, one module supports management and tracking of grant funds; another supports encumbrance accounting, the process of tracking committed funds prior to the receipt and payment of vendor invoices. The acquisition allows Great Plains to better meet the accounting requirements of the not-for-profit sector (which Microsoft estimates includes some 2.3 million entities in North America) without the need to rely on third-party products. While the move will be welcomed by Great Plains channel partners, Microsoft has not indicated whether it will extend the modules to integrate with Solomon, Navision, or Axapta, or make them available in geographies outside of North America.

Microsoft is taking care to portray the acquisition as a horizontal platform extension rather than a move into a specific vertical market. The press release announcing the deal emphasized opportunities for third parties to build vertical solutions on top of the core public-sector accounting capabilities that will be available in Great Plains. Nonetheless, the Encore deal moves the line separating platform and vertical solution; as a result, companies that offer end-to-end accounting capabilities for the public sector (such as Public-Sector Solutions, which sells Windows-based accounting software not based on Great Plains) could see opportunities dwindling as the new capabilities make their way into Great Plains’ extensive sales channel.

The acquisition involves only the transfer of code; Microsoft acquired no personnel from Encore. Financial details were not disclosed.

Encore Business Solutions is located in Winnipeg Canada; additional information on the modules acquired in the Microsoft purchase can be found on the Encore Web site at www.encorebusiness.com.