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Microsoft Targets Small Business With Financial Software

New software package is targeted at companies with fewer than 25 employees and less than $5 million in revenue--a key market dominated by Intuit.
Microsoft is shipping accounting and payroll-management software for small businesses that incorporates technology it acquired in its $1.1 billion acquisition of Great Plains Software. Microsoft Great Plains' Small Business Manager software package is targeted at companies with fewer than 25 employees and less than $5 million in revenue--a key market dominated by Intuit Inc. Intuit has about 6 million small-business customers using its Quicken and QuickBooks accounting software.

Microsoft's attempt to serve the small-business market with this new software package is overkill, says Allison Mnookin, director of product management for Intuit's QuickBooks. "Microsoft is taking an enterprise solution, putting it on a diet, and claiming that it's appropriate for small businesses," Mnookin says. Marketing an application to small businesses that don't readily equate Microsoft with small-business financial-management software is going to be a challenge for the company, she adds.

The new software, which incorporates features from bCentral, Microsoft's online E-business, customer-relationship management, and marketing service for small businesses, replaces Finance Manager. The new software is built on an SQL server database, which offers greater reliability and makes it easy for third-party developers to link products to small businesses via SQL, says Karen Engel, a team leader for Microsoft Great Plains business solution product-development group. The new software also includes payroll, direct-deposit, and financial-reporting capabilities. Pricing for a single user license starts at $1,500, and a multiuser license starts at $2,000. A single software license that includes payroll and direct-deposit features will cost about $4,000. Pricing for a multiuser license with payroll and direct deposit is $4,500.

Microsoft still must prove itself in the small-business market, says Yankee Group analyst Helen Chan. Enterprise resource management systems are the backbone of large businesses, but they are too costly for small businesses, she adds. With the release of Small Business Manager, says Chan, Microsoft is trying to establish a strong presence in the small-business market by targeting the backbone of most small businesses: financial software.

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