MS executives tout Dynamics suite for midsize firms

Microsoft Corp. executives Wednesday outlined a product road map for midsize companies that includes a new server software infrastructure package and a suite of role-based business applications that will be branded Microsoft Dynamics.

Company executives, including CEO Steve Ballmer and Chairman and Chief Software Architect Bill Gates, took the occasion of the first Business Summit at the company’s Redmond, Wash., campus to unveil a long-term vision for companies with 50 to 1,000 employees.

The server package, code-named Centro, will bundle upcoming versions of Microsoft’s Windows Server operating system, Exchange messaging server, System Center management software and security tools. Centro is expected to ship in 2007 or 2008, after the release of the next major version of Windows Server, code-named Longhorn, according to Bob Muglia, senior vice president of Microsoft’s Windows Server division.

Microsoft Dynamics is the new brand name for the company’s ERP and CRM products, which were formerly grouped under the Microsoft Business Solutions product line. The Dynamics brand will also encompass Microsoft’s Project Green, the code name for its initiative to integrate various lines of business applications with its Office, SharePoint Portal Server and SQL Server Reporting Services.

As it transitions to the more integrated business application strategy, Microsoft later this year plans to release new versions of its Great Plains and CRM products, to be called Microsoft Dynamics GP and Microsoft Dynamics CRM. New versions of its Axapta (now Microsoft Dynamics AX), Navision (Microsoft Dynamics NAV) and Solomon (now Microsoft Dynamics SL) are expected next year.

In addition to rebranding the products, Microsoft executives detailed plans to tailor the Dynamics business software for 50 specific user groups at midsize businesses. For instance, one user interface might be aimed at an operations manager, while another view might be created for managers in the finance department.

Gates said the company interviewed employees at more than 750 midsize companies to study how they work and how IT could make a difference for them. He said the employees want business software built around their job roles, and if they hand off work to someone else, they want the workflow “modeled into the system.”

James Utzschneider, general manager of strategy in the small and midmarket solutions and partners group at Microsoft, said few companies in the midsize-business segment have software designed specifically for them, and Microsoft will focus on building software that maps to the way people work.

John-Mark Tucker, information technology manager at Seattle-based Red Dot Corp., which manufactures heating and air conditioning products for the heavy vehicle industry, questioned whether the software would be able to truly encompass users’ roles.

“The role-based idea just wouldn’t fly here, because I can guarantee you that every person you define — salesperson, executive — is going to want some feature that’s not in their role” that’s built into the software, Tucker said. He noted that his company recently purchased Oracle Corp. business applications after taking a serious look at Microsoft’s Navision.

Tucker said the midmarket Centro server bundle is a great idea, but he doubts his company would buy it. Red Dot, which has about 500 employees and 200 PC and laptop users, already has 26 Windows servers that run the company’s Exchange messaging, file-and-print, Web applications, databases and electronic data interchange software.

He said he would give Centro a second glance only if the price break is significant and Microsoft makes a strong case for the package.

Several analysts said they think Microsoft’s midmarket offerings will appeal to those companies with limited IT staff who need products that are easy to configure, maintain and support.

Mika Krammer, an analyst at Gartner Inc., said Centro could help midsize companies transition to Longhorn, and it will also help Microsoft compete against vendors such as IBM, which have products focused on the midmarket. “It’s a positive step, but they will need to execute and finely tune the message,” he said. “Microsoft still has some work to do to get to know this market.”

Muglia said midsize companies are the most “underserved” in the IT space. He said the Microsoft engineers that build products such as Windows Server and SQL Server think about the needs of high-end Fortune 500 enterprises, because their environments are so demanding, and then assume the products will, in turn, meet the needs of other customers.

But Muglia said midsize businesses have different issues, and Microsoft realizes its software hasn’t been as targeted at the midmarket segment as well as it should have been.

Muglia likened the Centro server package to Microsoft’s Small Business Server offering, which has been successful among businesses with fewer than 75 users. Centro is aimed at midsize companies with one to five “IT generalists” who are typically so busy as “firefighters” that they don’t have time to learn more about server products in depth, Muglia said.

Although Microsoft’s existing product line meets the needs of medium businesses, “they’re too tough to use,” Muglia said. Centro will be easy to purchase and use, saving time for the IT generalists to “focus on what drives business advantage,” he said.

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