Microsoft’s SME Focus

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.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.