Business Software Category Profile

Microsoft is making noise. And channel partners are hearing it. That's one reason the Redmond, Wash.-based company fared better in the 2006 VARBusiness Annual Report Card (ARC) survey than it did in years past.

"You can't open a magazine without seeing a Microsoft ad. They're everywhere," says Sean Fullerton, president of eMonarch, a Microsoft Gold partner in Tulsa, Okla. "They've really upped the noise on the business-solutions side. And that's been good."

A push into the SMB space and a more generous investment in marketing and partner training helped Microsoft Business Solutions--whose lineup features the Microsoft Dynamics products--take the title in this year's Business Software category, with wins over Oracle, Business Objects and Hyperion in the areas of Product Innovation, Support and Partnership.

Microsoft's overall score was 71, allowing the vendor to eclipse Oracle by 2 points and pull ahead of its remaining two competitors by a comfortable margin of 10 points.

What's more, the noise Microsoft is making has started resonating with end-user customers.

"Microsoft has done a much better job of communicating its value proposition to customers," Fullerton says. The most notable thing the vendor has done in that regard: improving its product line, especially Microsoft Dynamics CRM.

"CRM is a hard sell in the small-business space," he says. "But it's easier now that I can say the product offers full marketing functionality and mail merges. Everything is automated, and [customers] can see how much ROI they're getting from a marketing campaign."

Bob Crissman, general manager of partner enablement at the Microsoft U.S. Partner Group, says the key was investing in the "enablement" phase--that is, helping partners succeed with better marketing, demand creation and product-strategy execution. "We've invested more in training and general business-readiness for partners," Crissman says.

Linda Erickson, co-owner of San Diego-based Pointivity, another Microsoft Gold partner, says the vendor's heightened focus on partners is evident. "We now have more people than ever dedicated to supporting us," she says.

Erickson adds that Microsoft's push to bring partners together through strategic relationships and networking has been key to improving business. "It makes sense, and it helps partners grow," she says. "It encourages us to stick to our core competencies instead of trying to do a little of everything."

But VARs do have one beef with Microsoft: They'd like to see the company become more solution-centric. Crissman acknowledges their concern and says the company is working to improve in this area.

"Customers don't want us to come in and talk about this application or that application. They want to talk about solutions for their business needs," he says. "It takes time to do that. We have a history as a product-focused company, but I think we're hitting the right mix now, and customers are responding."

It's worth noting, though, that Microsoft's victory in Business Software didn't span all four areas. The software giant's score of 80 in Loyalty put it in second place behind Oracle, which earned an 82.

Rauline Ochs, group vice president of North American Alliances and Channels at Redwood Shores, Calif.-based Oracle, says the company's continued investment in partner-only spaces and all-partner territories was key to the Loyalty win.

In addition, Oracle has made a commitment to protect customers that have invested in any of its applications, including those inherited from Siebel, JD Edwards and PeopleSoft.