Douglas Burgum, a senior vice president at Microsoft and president of the Microsoft Business Solutions division, was on hand this week for the Convergence 2004 user conference in the US. At the event, he spoke with Computerworld about the future of the four ERP lines Microsoft has acquired, as well as its CRM applications. Burgum also talked up Project Green, the company's effort to integrate a variety of business process applications.
Can you give us some idea of how big Microsoft is relative to competitors such as SAP and PeopleSoft?
We're definitely in growth mode, and I wouldn't frame (our position) as relative to competitors. We see the bulk of our business today in the small and mid markets, and those companies are focused on the enterprise. The majority of our competition we see in the highly fragmented segments of the small and mid markets, where we're particularly strong and we have a growing market position.
Companies like Siebel Systems and SAP are moving into that area, though. This is a market that Great Plains (software) has been in for 20 years, and that's the market that the enterprise players (such as SAP) are entering. They are new market entrants trying to move downmarket into a space where we have established channel partnerships and have a large installed base and a strong number of ISVs (independent software vendors) and products optimized for this market.
Do you offer hosted CRM, such as Siebel does?
We have hosted CRM with Surebridge (Inc.) for some time. Those who want it are not 100 percent of the market. The customers looking for on-premise CRM are a larger part of the market.
Will the delay of Longhorn affect your product development plans?
Yes, it does affect our plans. The efforts are taking advantage of innovations in Longhorn, but the important thing is to decouple it with the arrival of Green (the next-generation software). We will be standing on the shoulders of Longhorn, which will include a new operating system, a new interface, a new file system and all the benefits of the new operating system. We're building on that, and we'll have all the tools of Longhorn Visual Studio and the .Net tool system, and that will be part of the Longhorn wave.
One area of improvement will be the ability to do rapid customization at the customer level (while retaining) the ability of upgrading that change to new versions of the product. That has been a bit of a Holy Grail. Also, the Dr. Watson (error-reporting tool) will come in Green but will also be built into the existing versions of Solomon and Axapta.
I think real-time customer feedback and dramatically improved customization capability will translate into lower cost for the customer. Today, if you have a system that handles printing and invoicing, the customer spends 80 percent of the time on the 20 percent of (transactions) that have exceptions. (Our goal) is to help small and midsize companies achieve intelligent workflow in the real world of processes at low, low costs.
There is a common misperception about Green, that somehow our economic future is built on replacing the existing product lines. In fact, ERP product lines that are mature are at their most profitable point. We have a strong commitment (to the existing lines). We are not asking our customers to move to Green.
We're not trying to get these products to become Green, but give the customer a choice with secure futures. And if new customers at the end of a decade want some new snappy Green thing, then they can have that. Customers will have 10 years to decide to switch, and when they do, it will be as smooth a path as possible. There will be no forcing. There will be one Green at some point, but it won't be a single product.
Has Oracle's bid for PeopleSoft affected you?
There are no issues whatsoever.
You've been in CRM for about a year. How do you feel about it?
In terms of the customer side, we feel great. We've released it to 1,400 customers, and if you understand the mid market, this requires they have Active Directory and Exchange, and this is a relatively complex sale. We feel good about the slope of the incline (of acceptance). Version 1 was a new code base, new technology based on great new capabilities, and it was a very strong and stable Version 1. Version 1.2 was not a small update but had a year's worth of development efforts. It also drove additional stability and performance. We're pushing hard on 2.0 coming out in 12 months, and we feel good where we're headed.
Can you comment on integration?
The state of the industry is such that it can do a better job of making its products work better together and easy to integrate. Particularly in business apps, where many customers spend postpurchase (amounts) that are still too high to get value (from the applications). So one thing we are directing research and development to is how to make the products work better together and have an intuitive interface and tighter integration out of the box.
We're getting strong feedback from customers: They want us to help them take better advantage of what we have as opposed to adding more functionality. That is what we absolutely want to address.