Microsoft Does The Math

Microsoft plans to add a low-end accounting package, code-named Magellan, as well as an updated Outlook with Business Contact Manager to the core Office 2003 applications, said Steve Guggenheimer, vice president of small business for Microsoft Small and Midsize Solutions and Partners. CRN first reported on Magellan last December.

The target audience is very small businesses with owners or managers who handle the company's finances, he said.

The suite will build in integrated workflow so that the manager, for example, can create an invoice using the familiar Word application and then route it appropriately. It also runs on an integrated Microsoft SQL Desktop Engine (MSDE).

In this market segment, at least the accounting functionality will take on Intuit's popular Quicken and QuickBooks applications, solution providers said. But Microsoft may not offer Magellan as a stand-alone product, Guggenheimer said.

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QuickBooks, as great as it is, "runs out of gas" as businesses grow, these solution providers said. Some ISVs servicing small businesses are on board with this release, developing their own add-ons.

Thomas Fanelli, vice president of sales and marketing at Coastal Computer, Fort Myers, Fla., said he is building vertical capability atop this new offering--as well as QuickBooks, and Peachtree Accounting--for his clientele of electricians, plumbers, pool maintenance people and other service providers.

"These people need to schedule and bill. QuickBooks has limitations on the number of users supported, and while the enterprise version of QuickBooks can handle up to 30,000 customers, if you've been in business for 20 years, you may not service that many people actively, but you could well have that many or more in the database," Fanelli said.

Jay Stocki, vice president of business development at B2P Commerce, a Chicago-based solution provider, plans to build versions of his company's software for non-profit organizations for this suite as well. B2P, for example, can build fund accounting, templates for filling in the IRS Form 990 tax forms and multiyear accounting onto the base, he said.

Payroll automation leader ADP also is working on a payroll add-on for this product, Guggenheimer said. The exact naming and pricing of the new Microsoft offering has not been determined, but it likely will be called Office Edition For Small Business Management.

Microsoft has to be clear here, and also carefully parse the channel, because it already fields an Office Small Business Edition, which adds Publisher, and Outlook/Business Contact Manager to the other Office SKUs.

"We want to provide more differentiated value with Office editions for certain sets of customers," said Chris Capossela, corporate vice president of Microsoft's Information Worker Unit. "We've had SBE [Small Business Edition] for a while, and we put in Outlook contact management on steroids. Magellan's a perfect example of taking that to the next level," he said.

"There are some people in small business that do pretty deep accounting things as well as account management. We think we can bring them great value," Capossela said.

For more Office plans, see CRN.