Last week we reported Microsoft's latest announcements around their strategy for mid-market business applications, such as Great Plains , Navision and Axapta. We learnt that "Project Green", Microsoft's much trumpeted integration project designed to deliver a new ERP system out of the hotchpotch of mid-market accounting systems it acquired, is to be replaced by the "Microsoft Dynamics". The umbrella brand, "Microsoft Business Solutions" is to disappear altogether. So is Microsoft just shuffling the deckchairs or is there real purpose and business benefit behind this brand change? Gary Simon, FSN's managing editor reports.
Not surprisingly, Jon Hughes of Microsoft, points out that there is real progress behind the name changes. Speaking to FSN he said, "If you go back to our announcements around September last year we clarified our intentions for project green and made clear that our developments would be evolutionary rather than revolutionary. So we would gradually move to a single product environment. The name change is an articulation of that strategy and we are moving all of the products forward with tighter integration, roles based processing, a common business intelligence platform and better facilities for collaborative working."
"Core business logic will not change for maybe two to five years but you will see significant changes within the Dynamics products. You have to remember that we aren't working from the ground up. Much of the functionality we are going to employ already exists in Microsoft and all of the project teams are working together closely to embed this functionality. It's not going to be a big bang approach but, for example, you will see significant changes in the next release of Navision, now called, Microsoft Dynamics NAV, next year".
Competitors are naturally not convinced. SAP UK 's Director and General Manager, Ciaran Rafferty told FSN that he believes Microsoft is struggling with their mid-market business strategy. "They really don't have a clear view or strategy for the mid-market business segment. They have to integrate at least five applications that have been built completely differently and a name change and some new portal technologies aren't going to convince the market place that real progress has been made."
Rafferty believes the announcement will drive more Microsoft sellers into the arms of SAP. "Microsoft Business Solutions Partners still have no clear sense of how Microsoft is going to integrate all of these different accounting products or move to a new platform. I should think they are getting pretty worried about their investment in Microsoft and many are going to talk to us because we have a very clear road map with none of the integration problems that Microsoft are facing. Our channel to market has grown 30% in the last six months."
Systems Union , another key player in the mid-market also expressed surprise at Microsoft's announcement. Damian Traynor, Global Marketing Director, told FSN, "It is very surprising that Microsoft have made this name change given that MBS (Microsoft Business Solutions) has only been in existence a few years. I think that they are trying to give the impression that they are more co-ordinated but in reality they have a portfolio of accounting products."
However, Traynor was interested in the emphasis that Microsoft has placed on "roles
based" development within mid-market accounting software. "It's something we are more accustomed to in the business intelligence space, for example, giving the CEO his own dashboard on performance. Technology improvements are making it easier to support and deploy roles based software and I think that a lot of business applications will go that way."
Microsoft's Hughes told FSN, "We have researched thousands of customers and found that even in mid-market companies there are clearly defined roles although these are sometimes merged in smaller organisations. So there is definitely room to improve productivity by supporting a roles based approach to functionality. Also, something we didn't stress in our announcement is the benefit of allowing users to define and change business processes within the application. At the moment, a lot of implementation effort goes into bending the software to fit existing processes".
The name change to Microsoft Dynamics, also caught the market by surprise because of its historic association with Great Plains Dynamics brand which has disappeared. However, Hughes stoically defended the name, "I agree that it could be confusing for a short while but we genuinely believe that the word 'dynamic' reflects what we are trying to achieve. We think that we can make businesses much more dynamic using our products in the same way that Microsoft Office does. So we believe it's the right name."
Whether Microsoft is seen to be successful in blending their business applications and delivering a superior system could come down to whether they live up to the name change. Microsoft is going to have to display some of the dynamism that they hope to instil in their customers if the new branding is going to be judged a success.
