Last week's editorial on why application software companies should be more ready to chase the small and medium enterprise (SME) market rather than trying to delude themselves that they are the new SAP seems to have stirred up a few of you. Fortunately most of you appear to agree with my view that there are huge opportunities in chasing business in the mid-tier instead of obsessing about picking up the big enterprise wins.
But I wasn't really expecting the immaculate timing of Microsoft's declaration of war on the CRM market to substantiate my case quite so conveniently. That said - and thanks Bill, I owe you one! - my main reaction to the news that the Redmond behemoth is finally making its move was one of relief that the phoney war is finally over. Now we can focus on the hostilities themselves.
It should also put a spring back in the, at times faltering, steps of the Great Plains brigade. Ever since Microsoft bought the company, there's been an air of uncertainty about the direction of the vendor. It's ideally suited to the SME customer, but too many analysts and Microsoft people were ready to declare that in fact Great Plains was Microsoft's Trojan horse into the enterprise applications arena. So much so that many Great Plains people themselves seemed to become uncertain as to exactly where they should be positioning their products, which is a crying shame given that they fulfil a couple of the rare commodities of many apps packages: they work and the customers like them!
No-one of course should doubt the enterprise ambitions of Microsoft. Nothing winds up a Microsoft executive more than referring to the company as a desktop software firm or a PC software vendor. Much work has been done trying to convince the world that NT and Windows 2000 are robust enough to compete with Unix as enterprise class operating systems, with debatably successful results.
And there's evidence that the company is ready to tackle bigger markets. The SQL Server database was declared enterprise class by some analysts with the launch of release 7.0 a couple of years ago. This was supposed to enable the company to take on Oracle and IBM head to head. Well, if it is doing that, it doesn't seem to be doing it terribly well. How you count database marketshare is a hotly contested question, but whatever method you use, Microsoft trails way, way behind the two market leaders in the database stakes. There are some Microsoft stories that are just too tall to believe and the notion that SQL Server is as robust as Oracle or DB2 is one of them.
So it's encouraging to see that Microsoft's claims for the CRM push are more focused and grounded in reality. This is very clearly SME land they're after. Much has been made of the potential conflict with the likes of Siebel and Onyx, but on reflection I just don't see it myself. Well, not now at least. Maybe once Tom Siebel wakes up and realises that his one trick pony has run out of enterprise grass to graze on and needs to move down to smaller customers than there might be some tension, but that's a couple of years off yet.
The Microsoft offering is likely to be highly appealing to the SME customer. It's going to be cheaper than current offerings, intergrate seamlessly and conveniently with other Microsoft apps with huge installed bases, such as Office, and it will be sold by a group that understands the CRM and SME markets in the shape of the Great Plains operation. Good grief, they might even get their channel strategy right if they're not careful.
OK, it won't have all the bells and whistles of Siebel and Onyx et al, but it will probably have enough to meet the needs of most SMEs and in times of recessionary pressure, enough is what people are willing to spend money on. Most applications contain excessive functionality, nice to haves but not need to haves. On this occasion, less could most certainly be more.
So will Microsoft become a CRM champion? It's a definite maybe. The hosting option that the company is touting seems unlikely to appeal as most small businesses tend to hang on to their software internally, so that's probably an area of weakness. But anyone who writes off Microsoft's chances in the CRM space is a fool.
The last person to seriously underestimate Bill Gates determination was Jim Barksdale, late of Netscape, who when the browser wars were at their height and Microsoft was trampling all over his installed base, declared that God was on Netscape's side. On that occasion, God got it wrong. How much the Almighty knows about the CRM market remains to be seen...
Microsoft launches itself at CRM market