Microsoft ups R&D spending on mid-market

Microsoft founder Bill Gates has outlined the software giant’s commitment to
revolutionising its financial software products, as the company looks to the
mid-market as its biggest revenue driver in the future.

Speaking last week at Microsoft’s first Business Summit, Gates revealed that
the company was looking to ‘revolutionise’ the business software sector and had
spent ‘record levels’ on R&D to gauge the requirements of medium-sized
businesses, a slice of the market that he claimed had not been catered for

‘There are opportunities for bigger growth for us in mid-sized and smaller
business. We want to drive business productivity,’ Gates said.

Its main finance software products, including Navision and Great Plains, will
converge into a single technology during the next decade, allowing resellers and
Microsoft partners to tailor the product to suit particular markets.

This move has been known as ‘Project Green’, but the next versions of each
individual product will be prefixed with the term ‘Dynamics’. Great Plains will
be known as Dynamics GP and Navision as Dynamics NAV.

Microsoft CEO Steve Ballmer admitted that the integration of Great Plains and
Navision into Microsoft had been more complicated ‘than even we anticipated’.

The products were acquired in 2002, as the company looked to make its mark in
the business software marketplace.

The hugely anticipated US Small Business Accounting 2006 product, an
off-the-shelf software package, was officially launched at the event. The
company revealed that the UK version should be available in autumn 2006.

‘We are currently working with both accounting standards organisations and
professional firms in the UK to ensure the product is best aligned to the UK
market,’ said Paul White, product group director, Microsoft Business Solutions.

Microsoft launched a ‘professional accountants’ network’ in the US earlier
this year in a bid to build up advisers to recommend the software to clients. It
has been unable to clarify whether an accountants’ network will be set up prior
to launch in the UK.

Jerry Rihll, MD of accounting software supplier Digita, said that the US
launch had already had a ‘massive impact’ in the US and claimed ‘the same will
be true here’.

‘They start with the competitive advantage that most businesses already use
Microsoft products as their basic business tools and therefore have an existing
relationship with them.’

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