Eviscerating Microsoft Business Solutions

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Ventana Research believes that the lackluster performance of Microsoft Business Solutions (MBS) to date has nothing to do with the difficulties of the move towards a single code base (codenamed “Green”). Instead, it has everything to do with the gradual evisceration of Microsoft Business Solutions, as its core competencies are absorbed by other well-entrenched and profitable Microsoft assets. Ventana Research sees the ongoing unraveling of MBS to be part of a long-term strategy to lead in the ERP market based on platform dominance driving wider organizational footprint.

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The portfolio of software assets that Microsoft acquired and assembled into Microsoft Business Solutions (including Axapta, FRx, Great Plains, MS CRM, Navision, and Solomon) are experiencing a slow evisceration. It’s the kind of process that only Microsoft, with its deep cash reserves and ‘long game’ approach to the market, could stomach. In order to understand why Microsoft would disembowel these assets, it helps to understand the dynamics of today’s ERP market.

The ERP market is no longer primarily concerned with the issues that dogged these business application vendors in the past — such as functional breadth and depth, scalability, performance or channel building — although they remain important issues. The battle today is a battle about technology platforms and range of organizational footprint. The choice Microsoft faces is whether to increase footprint via the MBS applications per se or to increase the footprint of already entrenched Microsoft assets like Office, SQL Server, and Visual Studio. Ventana Research believes that the latter is the choice Microsoft is making.

Office has the potential to act as the primary front-end for a future MBS ERP application — as the forms entry system (InfoPath), the document production system (Word), the messaging and alert system (Outlook), the what-if number-cruncher (Excel) — and to provide the application entry point portals (SharePoint). With analytic, reporting, and — soon — real-time services built into SQL Server, virtually the entire business intelligence needs of MBS applications will be serviced by SQL Server. And if the new generation of vertical and horizontal business process models, which by definition incorporate core business logic, are moved into Visual Studio, then this asset will own the delivered and add-on custom code base of MBS applications.

Microsoft has been positioning the initiative, codenamed “Green,” as a gradual move towards a single code base: The consolidation of all the current generation of MBS assets into a single asset at some point in the future. Ventana Research believes that Green is essentially a smokescreen for the evisceration of MBS and its redistribution — in terms of people and knowledge — across existing software assets. Green remains important and interesting to both customers and competitors, but only as a series of “themes” for a future MBS deliverable rather than an end in of itself.

Assessment
Ventana Research does not see anything wrong with this approach by Microsoft, since it only reflects what its primary ERP competition — SAP and Oracle, not Sage and Intuit — are doing themselves. SAP is focused on extending the footprint of its NetWeaver platform, and Oracle on extending the footprint of its database and middleware platform.

But if this evisceration approach is in fact what transpires, then Ventana Research believes that it has important repercussions for MBS customers, ISV partner, and VAR partners. Customers can expect that future MBS ERP deliverables will be inextricably tied to other Microsoft software assets, which will become essentials rather than options. Utilizing Microsoft ERP will mean becoming a Microsoft “shop” from top to bottom. Both ISV and VAR partners will have to become even more committed to the Microsoft “stack” in order to understand and work with the real “guts” of a future MBS ERP deliverable.

Stewart McKie is European Analyst Director at Ventana Research.

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