To get an idea of just how well a big company can assimilate a small company, take a look at Microsoft's acquisition of Great Plains Software. Only a year ago, Great Plains was on its own, a small but popular back-office software maker. Today, the Great Plains Web site is somewhat hard to find on Microsoft's home page, and even the site's search engine doesn't offer up many answers.
So has Great Plains been completely enveloped by the biggest software company in the world?
Not exactly. Great Plains still has its own Web site and is still nestled in Fargo, N.D. But now the popular SMB software vendor obviously has stronger ties to Redmond, Wash. While Microsoft Great Plains continues to stand on its own, it has begun to leverage many Microsoft products, technologies and services, such as .NET, bCentral, and SQL Server, which could mean big business in the SMB space.
At first glance, Great Plains may have seemed an odd purchase for Microsoft. Many expected the software giant to make an acquisition in the hot CRM software market or, perhaps, in the middleware space, where Microsoft is playing catch-up to BEA, IBM and Oracle. But the $1.1 billion deal was a shrewd move for Microsoft, which traditionally does a large chunk of business in the SMB market. Now it's targeting more small and midsize customers with a strong Great Plains franchise that offers proven, cost-efficient products and a stellar reputation with both customers and partners.
It's that partner rapport that Great Plains has relied on from the get-go. "The thing we feel best about is that we've been able to maintain our channel relationships and fit well into the Microsoft organization," says Jeff Young, vice president of operations for Microsoft Great Plains. "We still have our No. 1 asset in our partners, and at the same time we've been able to invest in products and solutions with Microsoft that we wouldn't have been able to do as a standalone company."
That partnership with Microsoft prior to the acquisition made the integration process easier from a technological aspect, Young says. In addition, some 400 bCentral employees were brought to the Microsoft Great Plains team this year. The new Great Plains also worked closely with Microsoft's SQL Server and other product groups to align strategic plans last year. This year, the focus will be on bringing the strategies to life with new products and integrated technologies and services. "Now we're ready to go and take it to the next level for collaborative execution and development with these teams," Young says.
Many partners are excited about working with a breadth of integrated products and technologies from Microsoft and its new subsidiary that will let them offer customers more complete e-business solutions. I.B.I.S., a solution provider in Norcross, Ga., is a Microsoft Certified Gold Partner as well as the Great Plains 2001 Outstanding U.S. Partner of the Year. I.B.I.S. now has six different e-business solutions based on Microsoft Great Plains software, including PayAssist, a payroll add-on for Microsoft Great Plains eEnterprise applications.
"We've really had a solid, productive relationship with Great Plains over the years, and our solutions business for its products has been very good, even over the past year," says Ken Grabowski, director of marketing and business development at I.B.I.S. "Working with the two companies this year will be a key to success."
Perhaps the greatest benefit of the Great Plains acquisition is in the Web services area, namely Microsoft's .NET platform.
"Microsoft Great Plains will breathe life into .NET," says Tom Brennan, vice president of marketing at ManagedOps.com, a managed services provider and longtime Great Plains partner. Young, too, is confident that Microsoft Great Plains software will be one of the leading .NET-compatible application suites in the world.
"The .NET platform is in its final stages, and we're looking to have some of the first applications that will ship on the platform by midyear," he says. "We'll have a leadership position not only in terms of having .NET business applications out very early, but also in terms of being able to connect at a much tighter level with the .NET team, which will make for a highly tuned application set for .NET."
Brennan says he expects ManagedOps.com and other service providers to get a big boost from the combination of Great Plains and .NET because it will bring popular SMB applications to the Web services market.
"I think .NET will have a profound effect on Microsoft Great Plains, and vice versa," Brennan says. "Great Plains is going to give Microsoft some great automated-business processes to sell through .NET; I think that was one of the main reasons for acquiring Great Plains."
One of the knocks against .NET has been that it's been hard to grasp without seeing how the Web services platform plays with actual e-business applications, which have been scarce in the early stages. Microsoft has a clear advantage with Great Plains, which will push the .NET message with its customers and partners, offering them a clear and distinct vision of its e-business software through Web services.
bCentral, Microsoft's portal and services offering for small- business customers, has also benefited from the addition of Great Plains. The service had been aimed at the smallest of Microsoft customers. Now Microsoft Great Plains is bringing bCentral back to the forefront with new products and capabilities. "We've been able to take the investment Microsoft made in bCentral, combine solutions and services, and extend them to a larger audience of customers and partners beyond the small-business market," Young says.
Bolstering bCentral includes Microsoft Great Plains Small Business Manager, the newest addition to the Great Plains product line. The financial-management software suite, designed for growing SMB customers, manages payroll, sales and other financials, comes equipped with Microsoft SQL Server 2000 and is easily integrated with Microsoft Office.
Allowing For Flexibility
A hidden treasure in Small Business Manager is that it's not so small. The software targets businesses with fewer than 25 employees and less than $5 million in revenue, but allows flexibility for a growing business and connects easily to applications focused on larger enterprises, such as Solomon for midsize customers and eEnterprise for large customers. In a January report, Gartner analyst Michael Gomez wrote, "Small enterprises that aspire to aggressive growth should place Small Business Manager...on their short list." He predicted the software would gain significant market share against competing products to gain 30 percent of the small-business accounting software market by 2004.
The long-term strategy for Microsoft Great Plains is to stay nimble and allow customers to grow from small to medium to big without having to change software. Even before the acquisition, Great Plains had been hard at work on building solutions that carried over through the customer's life cycle and software that grew as the business grew.
"You can become a Microsoft Great Plains customer now early on in your business' lifetime and you don't have to move on if your business grows fast," says Tom Eide, head of the Small Business Manager product group. "Customers can easily migrate to solutions suited to larger enterprises...The [Small Business Manager solutions will work throughout the growth cycle of the business."
With such a loyal following, Microsoft Great Plains sees potential for moving upstream with its growing customers, even if some ascend to the upper echelon of enterprises. It could actually become a solid enterprise software vendor, some analysts say.
"With the support of Microsoft for Great Plains applications, the resulting suite can well succeed as a true enterprise contender," wrote Aberdeen Group analyst Katherine Jones in a recent report on Microsoft Great Plains. Jones added that Microsoft Great Plains was well-positioned for up-market movement in enterprise sales and CRM and could give larger vendors such as SAP, Oracle, and PeopleSoft serious competition.
Microsoft Great Plains, therefore, may soon make an aggressive push at larger customers with products like eEnterprise, its ERP software that controls sales, distribution, human resources and supply-chain management, while using C++, HTML, XML, Visual Basic and other technologies to provide interconnected business processes from the back office to the front office. Eide says Microsoft Great Plains is working on new releases for the fourth quarter and solutions targeted at industry verticals.
Microsoft Great Plains is still, in a sense, small. It still enjoys a tradition of tight relationships with partners and customers and a down-to-earth approach to e-business. But now, with new products and services at its disposal, the company's technology vision is larger than ever, and that may very well be what makes the little software company truly great in the years to come. n