Outlining Microsoft’s business apps agenda

ORLANDO — “The biggest decision we’ve made is to push into business applications,” Microsoft (NASDAQ: MSFT) CEO Steve Ballmer thundered from the keynote stage at the Dynamics-based Convergence conference in Orlando Wednesday, where he discussed the company’s focus on integration with other Microsoft programs, spreading CRM everywhere via a new EDS (NYSE: EDS) partnership, and its recent software-plus-service offerings.

“We’re still concentrating on the small to mid-market businesses, specialty and vertical businesses, subsidiaries and departments, take CRM everywhere, and make sure it’s all really usable,” he said.

He also discussed how Microsoft stacks up against the old hands in the business application market. Said Ballmer: “We are the leading provider of enterprise software in terms of total dollar volume. SAP is sometimes a collaborator, sometimes competition. Oracle is competitive. IBM is the most interesting, as they have none of the software (power) we have. DB2, Notes, WebSphere, Tivoli-not that strong. They’re more about enterprise services,” he said.

Forrester principal analyst Ray Wang said that these statements are in line with what he has seen in the market lately. Oracle and SAP still have a stranglehold on the mass-deployment enterprise-level ERP, while Microsoft wisely sticks to the mid-market space due to the scalability of the Dynamics suite and the lack of certain large-enterprise ERP functionality such as HR plug-ins, said Wang. However, he pointed out, while it is too early to speculate, Outlook and SharePoint were once positioned as somewhat segment-specific and are now pervasive in the enterprise, both big and small.

To increase its market share within the business applications space, Microsoft announced a partnership with Plano, Tex.-based EDS to resell its Dynamics-CRM software. This, said Info-Tech Research Group senior associate analyst Tim Hickernell, could signal EDS’s abandoning of Siebel, the CRM software it has been shilling for years. Oracle bought Siebel two years ago.

Microsoft itself is heading into the service market with its new “software plus services” model. One of the first forays into this arena (Ballmer said it’s “still early”) is the previously announced Microsoft Dynamics CRM Live, which is expected to hit in the second quarter of 2008.

The product was demoed during the keynote, which showed a call centre scenario where the operator could tap in immediately to the case file of the customer but also connect to related messages in Outlook. These records can be exported to Dynamics programs. Word is also connected to the application, allowing the user to use response templates, as well as Messenger, which can connect the operator to another party who might need to consult on the call (who can also patch in to see the CRM info).

Microsoft corporate vice-president Kirill Tatarinov also presented a couple of new software-plus-services offerings from the upcoming Dynamics NAV 2009. They included a marketplace service that integrates with eBay to sell products online, and a keyword marketing service that tracks keywords and manages online advertising campaigns. (The latter, according to Hickernell, is clearly a play against the recent Google and Salesforce.com alliance.)

Microsoft executives emphasized their efforts around application integration and ease of use by creating a more familiar look-and-feel among the Dynamics applications. Ballmer touched on, for example, the workflow capabilities of SharePoint, which can also be used to search Dynamics content, along with Excel-based analysis and reporting, and tie-in with SQL Server and PerformancePoint Server.

“We do see SharePoint everywhere,” said Wang. “And all the smaller pieces are bubbling up together, so it makes sense to capitalize on that existing knowledge, from Outlook and Vista to business intelligence and SQL and SharePoint, and put it to use.”

The customer-friendliness slant continued with a couple of other announcements. The company worked with the University of Copenhagen to craft Feel IT, a new, more visual methodology to help power new Dynamics applications, including the upcoming NAV 2009.

According to Nancy Teixeira, the group manager of Microsoft Canada’s business solutions group, the methodology aims to take tech “from usable to desirable.” She said, “They worked with the end users to appeal to the emotional experience with the software, using visual cues.”

Also announced was Microsoft Connect, a new, interactive, response-guaranteed portal where users can offer feedback online for the development team, and vote on features submitted by other users.

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