Microsoft's slow growing business apllications division, one of its seven business units is announcing a new CRM package. It'll need to be strong to stand up to the powerful competition from SAP, Oracle and Salesforce.com.
By tying the software closely to Outlook, the e-mail and calendar software included in Office, the launch also marks a new attempt by Microsoft to win over more users by drawing on the broad use of its desktop software. There are 400M users of Office.
However, the factors that have held back Microsoft’s growth so far in the applications business, where it competes with giants such as SAP and Oracle, could continue to hamper it. Apparently “Microsoft’s biggest problem is its [sales] channel,” according to Bruce Richardson, chief research officer at AMR Research.
Since it sells mainly through partners, the company does not have the close links with customers that rivals enjoy, he said, adding: “The good news is, it has a lot of people selling software; the bad news is, it loses its relationship with the customer.”
Revenues at Microsoft Business Solutions, one of the company’s seven business divisions, grew by only 5% last year, to $793m, or 2% of the company’s total revenues.
This is an interesting tack by Microsoft. They seem to be launching applications where the core benefit is tight integration with Office and an ease of use and GUI similar to Office. I'm not sure yet whether this strategy is more designed to benefit Microsoft or the users.
And it feels to me like these application moves may be better designed to serve the SME market than large corporates. Interestingly so are Microsofts sales channels. Maybe they should take advantage of this focus and worry a little less about the corporate market that SAP, Oracle and IBM serve so well. Just a thought.
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