Microsoft bosses Bill Gates and Steve Ballmer have drawn
up battle lines in the enterprise software market with its
announcement of the Microsoft Dynamics initiative, and it is likely
to have profound effects for users.
Last week, the company rebranded ERP packages bought from
Navision and Great Plains under the Dynamics brand. With the next
release of Office, due in 2006, Microsoft will integrate these
products and its CRM software with Word, Outlook and Excel.
Microsoft believes this can deliver productivity gains by, for
example, avoiding the need to re-key data or train staff on new
systems. IT departments will be able to define their own business
processes in the software and offer users tools based on their
business roles, it said.
Although Microsoft is initially targeting medium-sized
businesses, the same integration strategy will apply in big
business, said Natalie Ayres, Microsoft senior director, small and
medium solutions and partners.
Microsoft has a track record of conquering new markets, such as
networking software, server operating systems, e-mail and web
browsers. This has sometimes created integration issues with
existing software.
Owen Williams, IT director at property agency Knight Frank, was
not worried by this. "Microsoft's roadmap fits into my view of
where we need to go," he said. "We have just finished Office 2003
and we intend to sit on it for a while and see how successful
Microsoft's strategy is. I do not think compatibility will be any
more of a problem than if it was not going into this market."
Teresa Jones, senior analyst at Butler Group, said many
businesses would be reluctant to rely solely on one supplier. "Most
large organisations like the idea of choice." She predicted such
firms would prefer a dual-supplier strategy for enterprise
software.
One area Microsoft will have to address is long-term support,
said Jones. "Users will not upgrade unless they have to as it takes
too long. People who upgraded their ERP for Y2K will not want to
switch again swiftly," she said.
David Bradshaw, principal analyst at Ovum, said the move into
business applications would present new challenges for Microsoft.
"I think it is a very different proposition with business
applications. Microsoft has to get into vertical business
applications more strongly. It is easy to configure the software,
but medium-sized businesses do not have the business analysts to
know how to do it."