Microsoft Customers Impatient for Midmarket Products

Reporter's Notebook: Microsoft customers say they are pleased the company is finally addressing the needs of midmarket customers. But they expressed impatience that it will take several more years for the company to flesh out its strategy.

REDMOND, Wash.—Microsoft customers who attended the companys business summit here Wednesday said they are pleased the company is making a major commitment to the midmarket segment.

However, they expressed impatience that it would take several more years for them to see the full results of this strategy.

Microsoft has been hard-pressed to bump up its midmarket support, which has been generally underserved, said Paula Paul, senior vice president global architecture with Scottish Re (U.S.) Inc. a reinsurance company based in Charlotte, N.C.

Microsoft made its first tentative move with its Small Business Server three years ago, but it really didnt serve the needs of midmarket customers, she said.

Scottish Re has between 300 and 400 desktop computers and an IT staff of about 35 to support the hardware and applications, she said.

Wednesdays midsize business products announcements show Microsoft is making a major commitment to serve the market, she said.

"They still have a long way to go" to provide the breadth of systems midmarket companies need.

"But they have the patience and tenacity to do it, and they can afford to take their time," Paul said.

Paul noted that some customers are impatient that they have to wait for the midmarket servers and Dynamics enterprise resource planning products until Windows Vista is delivered in late 2006.

Customers are asking "what do we do in the meantime," she said.

Microsofts answer that customers should work with their partners and get ready to deploy the products when they are ready isnt helpful to companies need the products now, she said.

Microsoft CEO Steve Ballmers disclosure that the company is going to give customers the option of acquiring some products as hosted subscription services as well as installed premises is an important development, she said.

Companies such as Salesforce.com, Salesnet Inc., Siebel Systems Inc., and Ketera Systems Inc., which sell all or part of their product lines as hosted subscription services, are providing increasing competition for software companies that have long licensed their software for installation at the customers offices.

Paul questioned whether a subscription service would be the right option for most midsize customers.

"They are going to have to provide the economic justification for them" to move in that direction, she said.

/zimages/1/28571.gifClick here to read more about Microsoft CEO Steve Ballmers thoughts on the midmarket from the business summit.

Its really a question of whether its the kind of application that must be managed in house by the IT staff and whether there are compelling economic reasons for using a subscription service.

Microsofts announcement that it will market the "Project Green" customer relationship management, supply chain management and financial applications under the "Dynamics" brand name, provided little new information about the future evolution of these products, noted Paul J. Connolly Jr. CIO with Oakhurst Dairy Inc. in Portland, Maine.

The 250-employee dairy company is actively moving into Great Plains accounting software and is keenly interested in seeing how the Dynamics products develop the next three or four years, said Connolly.

Next Page: Left out in the cold.

John Pallatto

John Pallatto

John Pallatto has been editor in chief of QuinStreet Inc.'s eWEEK.com since October 2012. He has more than 40 years of experience as a professional journalist working at a daily newspaper and...