Microsoft moves from the massive to the masses

Looking to establish a foothold in the small- and medium-sized enterprise market, Microsoft recently released two new editions of its BizTalk Server 2002.

The Partner and Standard editions, announced last month, and the previously released Developer editon, carry the same features that the much larger Enterprise editions has, but are scaled to fit the requirements of a smaller company.

According to Carol Terentiak, senior product manager of Commerce Server and BizTalk Server for Microsoft Canada Corp. in Mississauga, Ont., the launch of these two business-to-business products represents a new focus for the company.

“Years ago, Microsoft and our partners were focusing on targeting the larger enterprise. Small businesses often get left out of the integration scenario, but our Partner and Standard editions are for the masses rather than the massive,” she said.

Terentiak said Microsoft recognized the gap in this market after dealing with its own issues in connecting with partners. Like most large enterprises, Microsoft has a number of trading partners and suppliers of every size, and found that integrating with its smaller suppliers was a bit of a headache.

“How do you get them to play the integration game if they don’t have the IT staff? There are a couple of ways that it can be done,” she said.

One way would have been for the hub, or the main enterprise dealing with smaller partners, to purchase a product such as BizTalk Server 2002 Enterprise Edition and distribute licenses to partners, Terentiak said. While still a possibility, Microsoft narrowed in on the little guy and moved BizTalk into every level of the enterprise, she said.

“We’ve taken the technology and made it fit into every area, which is brand new for us,” she said.

This strategy, according to Rob Helm, an analyst at Directions on Microsoft in Kirkland, Wash., is a smart one for the company to take.

“In general, Microsoft sees small business as a way to the big time. It would like to make itself a big enterprise software vendor like Oracle, SAP or Siebel, but there already is an Oracle and SAP and a Siebel, so Microsoft’s nefarious plan is to sneak in at the bottom level and move on up,” Helm said. “Microsoft sees it as a big opportunity to get a foothold at the low end of the market, get itself into position and then compete with the big ones.”

Shawn Willett, an analyst at Current Analysis Inc. in Sterling, Va., agreed. “[Microsoft is] slowly but surely catching up with the functionality of the more established players,” he said.

BizTalk binds its messaging and business process automation facilities with other Microsoft technologies, including Windows 2000’s COM+ and XML services, SQL Server, Exchange Server and Visio, none of which is included in BizTalk’s purchase price.

“There is a huge demand for bringing smaller customers into the fold of integration. It’s almost to the point with some organizations that if you’re not trading electronically, you’re out of the picture. This is bad news for small businesses that don’t have this up and running,” Terentiak said.

The Partner Edition is priced for one CPU and allows integration of two internal applications with up to two trading partners. The Developer Edition comes included with a subscription to the MSDN developer program and provides developers with the tools to integrate applications and trading partners and to orchestrate business processes. Both editions are priced at under US$1,000. The Standard Edition is priced at US$6,999 for one CPU and allows for the integration of five internal applications with up to 10 trading partners.

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