The £890m acquisition will add Navison's business applications to Microsoft's portfolio of business applications aimed at small and medium-sized businesses.
Microsoft senior vice-president Doug Burgum said the acquisition would complement the company's Great Plains ERP product family. He said, "Eighty-six per cent of Navision's business comes from Europe, and 80% of Great Plains business is in the US."
The plan, eventually, is to integrate the two products through the company's .net architecture for web services. Burgam said, "Our vision of the future is one where business solutions are seamlessly interconnected, where specific functionalities communicate across platforms and servers, across continents and cultures."
Tony Lock, a senior analyst at Bloor Research, said the deal should benefit Navision users, as Microsoft was more financially secure. Lock sees the acquisition as a way for the software giant to build a European user base for its line of business applications. "Navision is widespread across Europe, offering supply chain, customer relationship."
Navision's users include Anglia Railways, which threw out an SAP R/3 implementation in 1998, and a number of Ikea franchises.
Starting with the £750m acquisition of Great Plains Software in April 2001, the company has steadily built a suite of products based around its bCentral portal. In February, for example, it announced it would be offering a Customer Relationship Management system through bCentral.
As the company continues to build and acquire ERP technologies, experts feel that with the economy still tight, second-tier suppliers will find they will become increasingly squeezed by Microsoft's marketing clout and strong channel partnership programmes.
As Microsoft announced its acquisition of Navision, mid market ERP manufacturer Lawson Software announced a profits warning.
Jay Coughlan, Lawson chief executive officer, said, "customers in certain verticals (markets) are buying single suites, or what they can implement immediately, instead of making large multi-suite purchases."