Axapta for Life Sciences, a special life sciences edition of Microsoft’s high-end business management package, will ship in the first quarter of 2005 in North America and Europe. Based on Axapta 3.0, the release could reduce burdensome manual work that companies such as drug and medical device manufacturers expend to meet government regulations. In addition, the release opens opportunities for Microsoft Business Solutions (MBS) and its partners in a well-funded, technology-savvy industry. However, the product is not an out-of-box solution, and company-specific solutions and customizations will need to be implemented by specially certified Microsoft partners.

Special Requirements

Companies in the life-sciences industry, such as pharmaceutical companies and medical device manufacturers, must comply with a set of manufacturing, processing, and documentation requirements referred to as Good Manufacturing Processes (GMPs), which are mandated by the United States Food and Drug Administration (FDA). For example, the GMPs include a byzantine specification referred to as "Part 11," which outlines rules and restrictions governing the use of electronic records and electronic signatures in FDA documentation requirements (such as the documentation a drug manufacturer must maintain to track production lots).

Compliance with these requirements is often a manual process. Companies frequently hire consultants to produce and maintain FDA-required documentation or do so in-house. This overhead increases the time and cost of bringing products to market and is thus a substantial business risk.

Easing Regulatory Compliance Efforts

Axapta for Life Sciences aims to reduce the overhead of complying with government regulations. It builds on Axapta’s strengths in manufacturing and distribution, adding capabilities to satisfy the unique needs of manufacturers and distributors in the life sciences industry.

For example, the product adds support for electronic signatures to meet requirements spelled out in Part 11. The release also tweaks some existing Axapta features to make them GMP-compliant—Bills of Material (BOMs) in Axapta for Life Sciences cannot be edited after they have been approved, for instance. In addition, the release includes documentation that validates manufacturing processes implemented with Axapta for Life Sciences adhere to practices mandated in the GMPs.

The life sciences sector offers a compelling opportunity for MBS products. Unlike many of the businesses that MBS targets (construction companies, for example), life sciences companies are technology-oriented—they already budget for technology expenditures and do not need to be convinced of their value. Consequently, Microsoft could see quicker adoption here than it does in less tech-savvy sectors.

Partner Opportunities, Risks

As it has done with its other forays into specific verticals, Microsoft is taking care that Axapta for Life Sciences is portrayed as a partner opportunity rather than a Microsoft land-grab. Essentially, Microsoft positions Axapta for Life Sciences as the least common denominator in a life sciences solution: it says partners will supply the specific applications and customizations for a complete solution.

Nonetheless, the announcement reinforces a general approach followed by MBS and more traditional Microsoft product teams (such as the SQL Server and BizTalk Server teams) that could threaten some partners. While the company positions these teams’ products as broad, horizontal platforms, and generally engineers them to be industry-independent, it will not hesitate to add features that are industry-specific, particularly if those features are broadly applicable within that industry or could drive substantial product sales. This approach often benefits partners by making those products more suitable platforms for building industry-specific custom solutions. However, it could put at risk partners that play too close to the platform-application boundary, which is indistinct at best. For example, the Part 11 compliance capabilities in Great Plains were provided by a partner, Merit Solutions, Inc., but the Axapta team built their own compliance capabilities for the Life Sciences product.

Pricing, Availability, Resources

Axapta for Life Sciences will be available in Canada, European Union countries, Switzerland, and the United States in the first quarter of 2005. Microsoft has announced no plans to make the product available in other markets. Pricing has not been disclosed.

Before Microsoft partners can sell Axapta for Life Sciences, they must be certified on the product. As of Dec. 2005, Microsoft has arranged with NNIT, a subsidiary of Danish pharmaceutical company Novo Nordisk A/S, to certify other partners on Axapta for Life Sciences.

The Axapta Web site is www.microsoft.com/BusinessSolutions/Axapta/default.aspx.

The home page for NNIT is www.nnit.com.