Microsoft announced plans to purchase Great Plains Software on 21 December for $1.1 billion in a move that shook up the world of accounting software. Great Plains, which has been working in partnership with Microsoft for the last 19 years, will become the Great Plains Division of Microsoft with Great Plains CEO, Doug Burgum, remaining at the helm.
Great Plains makes applications software for e-commerce, human resources and customer service, as well as accounting. Although the acquisition of such a company directly contradicts Microsoft’s commitment to leave the applications software market to its partners, for many such a move was inevitable.
Microsoft’s leap into the application software business comes at a time when the market appears to be growing. Oracle has already established themselves in the application software business with their Oracle 11i suite, which operates via Netledger, and Microsoft have responded accordingly.
The move means that Microsoft will be able to marry its .Net platform with Great Plains' business management suite, making it well placed to provide business management applications for small and medium sized businesses over ASP. And it will now be able to serve accounting software via the Internet using its existing online service for small businesses, bcentral.
“In other words, a family-owned business that employs 35 people will have access to - and will be able to afford - the same kinds of technology purchased by a multi-national corporation,” says Jeff Raikes, group vice president of Microsoft’s Productivity and Business Services Group.
The acquisition came hot on the heels of a statement made by one of Microsoft’s European division heads that the company was considering acquiring, or partnering with Great Plains’ rival Sage Software. If that happened, Microsoft would have the SME accounting software market sewn up, so it would be unlikely to get past regulators. Instead, Sage users whose IT departments are effectively "Microsoft shops" are likely to face a renewed push for business by Great Plains and its channel partners.