The Microsoft Business Network (MBN) will no longer be offered as a stand-alone application, but MBN features will be incorporated into other Microsoft Business Solutions products, such as Great Plains and Axapta. The retirement announcement, posted by Microsoft to a public newsgroup, offers little detail about how MBN's functions will be incorporated into other products, or when Microsoft will do so. Microsoft will assist existing MBN customers in moving to alternative solutions.

Software, Services for Trading Networks

MBN, launched in Oct. 2003, was designed to help small and midsize businesses automate and manage supply chains. It combined onsite software and subscription-based, Microsoft-hosted Web services to help companies connect to their partners and exchange business documents, such as purchase orders and invoices. MBN integrated with Great Plains—for example, purchase orders received from an MBN partner could be moved directly into a company's Great Plains order system.

One major goal of the MBN was to help small companies with limited computer savvy participate in electronic trading networks without requiring large investments in software, infrastructure, or integration services. Companies could interact with the MBN using Outlook 2003 and Excel 2003; planned features included the ability to interact with MBN with nothing more than a Web browser.

Customers, Features Redirected

Microsoft has not said how many customers signed up for MBN, but it had a number of participants in Mexico, where MBN was first launched as a trial service. Microsoft is helping to move those companies' business networks to alternative networks or technologies. For example, several participants in Mexico will be redirected to Levicom, which offers trading networks for retailers. Other customers with more specialized networks, or networks that cannot easily be redirected to publicly available solutions, will get proprietary solutions that use the InfoPath XML forms client and BizTalk Server as a hub for exchanging documents. Microsoft is working with MBN customers such as defense contractor Northrop Grumman and insurance provider ING to build those solutions.

Microsoft says it will incorporate the functions provided by MBN into its existing line of enterprise resource planning (ERP) products, such as Axapta and Great Plains. (Members of the MBN development team will be reassigned to the various ERP product development teams.) However, the redirected functions will not employ existing MBN code, and the company only explained how it would re-create MBN's features in general terms. For example, Microsoft suggested that MBN-like functionality in its ERP products would be based on Web services and Office's XML features. However, it remains to be seen how these capabilities will address the niche requirement targeted by MBN—that is, providing an out-of-the-box solution that enables customers to participate in trading networks with minimal capital, technology, and integration investment.

Internal Competition a Factor

The demise of MBN was likely triggered by several factors, including internal competition, rationalization of the MBS product portfolio, and less interest in directly hosted services.

Internal competition. Each of Microsoft's four ERP products already provides some business-to-business features. Microsoft likely decided that enhancing those features in its widely deployed ERP products was a better investment than continuing to develop them separately in MBN, a relatively new product with limited uptake.

MBS portfolio changes. Retirement of MBN is consistent with ongoing MBS efforts to bring focus to its varied business application portfolio. For example, in Jan. 2005, Microsoft's then-Chief Financial Officer John Connors mentioned unspecified MBS products were being put in "maintenance mode", indicating that some products in the MBS lineup would no longer be enhanced and updated.

Hosted services. In recent years, Microsoft has trended away from hosted services for small businesses when a clear business case, such as driving sales of packaged software, is not evident (as seen, for example, in the replacement of bCentral with a more information-focused site called the Small Business Center). One early goal of the MBN was to drive sales of other MBS products, such as Great Plains, but the incremental sales achieved so far do not appear to justify the cost of expanding, operating, and maintaining the MBN service.

Resources

Microsoft has not yet announced the date on which the MBN will be shut down.

The announcement of MBN's retirement is at groups-beta.google.com/group/microsoft.public.businessnetwork/browse_thread/thread/39e14fe9c1468836/870079869885cb2d.

For more information on the MBN, see "Business Network Improves Supply Chain Management" on page 22 of the Nov. 2003 Update.

Replacement of bCentral with Small Business Center is described in "Small Business Center Replaces bCentral" on page 23 of the May 2004 Update.