As part of its Industry Builder initiative Microsoft and partners have delivered five new business management solutions based on Axapta, a high-end enterprise resource planning (ERP) product from Microsoft Business Solutions (MBS). The solutions cover a range of industries, including retail and professional services, and are the first to carry the Industry Builder designation, which certifies the financial stability of solution providers and the quality of their custom code (such as add-on modules). Although Microsoft intends to expand the Industry Builder program to other products, such as Great Plains, it has not announced solutions for products other than Axapta.

Program Assuages Customer Concerns

Although the MBS ERP products (Axapta, Great Plains, Navision, and Solomon) offer relatively broad business management functionality, the products typically require customization to fit the needs of specific companies and industries. Partners have traditionally filled this gap, building industry-specific solutions on top of the MBS products. This approach minimizes Microsoft's overhead, allowing it to focus on broadly applicable features, and creates a niche for partners. However, it raises concerns for some customers. For example, customers have questioned whether third-party customizations are held to the same quality standards as Microsoft products and have expressed concern that lack of a single point of accountability could cause problems in resolving technical problems.

The Industry Builder initiative, launched in Mar. 2005, is designed to assuage many of these concerns. For example, the program verifies the financial stability of partners, thus ensuring that these partners are able to provide ongoing support for their solutions. The program also attempts to address customers' concerns about the quality of third-party software: Microsoft personnel review code and assist in testing of Industry Builder solutions. Furthermore, Microsoft offers support for certified solutions, including both the software it creates and the custom software created by its partners.

The first Industry Builder—designated solutions cover a range of industries. For example, Manhattan Associates offers an Axapta-based solution for managing complex supply chains. Among other capabilities, the solution adds modules that help companies better manage product shipping and transportation. Foliodev's Professional Services for Axapta adds capabilities such as advanced project accounting and self-service time and expense entry to Axapta's core feature set. A third Industry Builder partner, Fullscope, offers manufacturing features for pharmaceutical and food and beverage companies, among others.

Other Solutions, Products Promised

The success of the initial Industry Builder solutions could provide a barometer for future success of the program, which carries incremental costs for participating partners. (Microsoft has said it hopes to add 12 to 20 additional partners by the end of 2006.) For example, partners bear the costs (such as those associated with code reviews) of achieving the Industry Builder designation. If those costs are not offset by the broader visibility (and thus increased sales) given to partners' add-on modules and solutions, as Microsoft expects, additional partners will naturally be reluctant to sign on.

Similarly, the degree of success of the first Industry Builder solutions could dictate whether Microsoft expands the program to include other MBS products (such as Great Plains, Navision, and Solomon). While the company has indicated that other products will eventually follow Axapta's lead, none have yet done so. However, if the program proves beneficial to Axapta sales or reduces the product's sales cycle, this could change. If the program is adopted by other MBS products, it will most likely focus on partners targeting larger customers, since those customers will be most willing to pay a premium for Industry Builder—designated solutions.

Resources

The Axapta Industry Builder initiative is described at www.microsoft.com/businesssolutions/axapta/product/industrysolutions.mspx.

The new Industry Builder solutions for Axapta are described at www.microsoft.com/presspass/press/2005/nov05/11-30IndustryBuilderInitPR.mspx.

For more information about the Industry Builder program, see "Certification Program for Axapta Solution Providers" on page 21 of the May 2005 Update.