Microsoft and SMEs

From a NYTimes article:

Microsoft has identified business software for small and medium-sized companies as a market ripe for growth. The idea is to use software to make e-commerce easy and affordable for these companies in the Internet era, much as the electronic spreadsheet gave them a tool for financial tracking and modeling in the personal computer era.

New versions of Microsoft’s small-business server products will go on sale this fall, starting at less than $1,000, including the computers from Dell, Hewlett-Packard and others. The goal is to make Web sites, online brochures, sales, billing and customer service as easy and automated as possible for small businesses, with the final customization often done by the local technology consultants who are Microsoft partners.

Today, this software business generates about $500 million a year in revenue, but the target is a $1 billion rate a year from now. “That is what attracted me to this business,” said Mr. Ayala, who became the executive in charge of the small-business software group in March. “There are very few businesses that can grow 20 percent or 30 percent a year. This is one. We believe this can be a $10 billion business for us someday.”

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In October, Microsoft plans to start selling its Windows Server 2003 and its Exchange Server 2003 together for $599, the software maker said Wednesday. That price includes a license for up to five PCs, with discounted pricing on additional licenses available to companies that have up to 75 computers. The two-part bundle will be part of an update to Microsoft’s Windows Small Business Server line.

The existing product in that line is a larger collection of server software for $1,499. That bundle is slated to be updated in October, when it will go on sale as the “premium” edition. It will include Microsoft’s SQL Server database and another program that allows companies to set up a complex firewall to protect corporate data, according to the company.

Affordable solutions for SMEs is also what we want to focus on – the difference being our primary targets are the emerging markets like India. Affordability in our case means solutions that cost a tenth or less of what Microsoft charges.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.