Microsoft signalled its aim to move into the business applications market with a £747m offer for Great Plains before Christmas. The move followed six months of discussions. It is expected the deal will be sealed in mid-February following government approval in the US.
Great Plains and Microsoft have enjoyed a close relationship for several years and in Great Plains’ 1998 annual report, Microsoft chief Bill Gates, said: ‘The relationship is an example of a real partnership that demonstrates how technology companies can work together for the true benefit of our mutual customers’.
However Sage and Great Plains have also enjoyed a long and successful relationship – but Microsoft admitted this week that although it hoped it would continue to work with Sage, the acquisition may not make that possible.
It is not yet clear exactly where Sage and Microsoft will now be able to work together or where they will be competing against other.
Paul Tollet, Microsoft small business director, told AccountancyAge.com: ‘We notified Sage prior to the announcement of our intentions due to the professional relationship we have with them.
‘We are hoping our relationship with Sage will continue – both parties are digesting the developments to find out exactly what it means, there will remain many opportunities for us to work together.
‘We are going to be competitors in certain areas but it’s not clear yet where,’ he added.
Sage would not comment on the situation, but its relationship with Microsoft includes the use of it’s technology and development tools when developing its software, particularly with its Enterprise-sized products.
The deal has already attracted controversy in the US after a Silicon Valley start-up filed an anti-trust letter with the US Department of Justice calling for an investigation.
Several years ago Microsoft pulled out of a deal with entry level vendor Intuit after bowing to pressure from rival vendors.
Basda chief executive Dennis Keeling said anti-trust pressures may become evident again. He said: ‘Many of our members are heavily dependant on Microsoft technology and it is likely there will be objections to the move over the coming weeks’.
The proposed deal will see each share of NASDAQ listed Great Plains exchanged for 1.1 shares of Microsoft stock.
Until recently, Microsoft’s plan for the business market focused on supplying business customers a platform and letting them choose ‘best of breed’ solutions from among the many different applications available.
But this move could help Microsoft create its own suite of applications to help small and medium-sized companies run their businesses.
Microsoft also hopes to integrate Great Plains into its much-hyped .NET platform, which will provide a new generation of business applications across the internet.
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