Business Week writes on the next big frontier for software: the 45 million small and medium enterprises worldwide.
The opportunity is huge. Even though researcher Gartner Inc. predicts that small and midsize companies worldwide will spend $420 billion on technology this year, less than 25% are using the kind of sophisticated applications Microsoft is now selling. The rest rely on basic accounting or tax packages or on programs such as Microsoft’s own Excel spreadsheet — which requires a lot of customizing.
Microsoft’s pitch to smaller companies is simple. It’s promising them the same sort of productivity and efficiency gains that big corporations realized in the mid-1990s as they automated everything from manufacturing to human resources.
The key to Microsoft’s long-term success will be its base layer of small-business technology, which it calls the Microsoft Business Framework. Every company that makes business applications duplicates each other’s work, creating such functions as sales-order processes or accounts-payable technology. Microsoft figures that if it creates that base technology, other software makers can focus on applications that cater to specific customer segments.
