Looking for the Key to SMB

SAP, PeopleSoft and Microsoft go after the vertical-industry SMB market.

Some of the biggest names in the software business—SAP AG, PeopleSoft Inc. and Microsoft Corp.—are chasing SMB customers with offerings that provide capabilities configured for specific vertical industries.

But to win over a substantial number of those potential small- and midsize-business customers, each will have to work out its relationship with channel partners, which are usually the face of IT for smaller companies.

SAP, of Walldorf, Germany, is beefing up its SMB software suite, called Business One, with specialized capabilities for vertical markets, with the first versions designed for the manufacturing industry, officials said. The company is also working to build out its partner channel to provide more modules with vertical capabilities and some horizontal features. SAP has 75 Business One reseller and solution provider partners.

Meanwhile, PeopleSoft this week will announce its World Express suite, which is designed to let SMB customers deploy the software quickly. The Express offering uses code from World—an application suite developed by J.D. Edwards & Co., which PeopleSoft acquired last year—to provide predefined business process templates for four industries.

Big fish swim downstream

Developer Initiative

Adding capabilities for manufacturing and other verticals to its Business One suite


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Overall, PeopleSoft, of Pleasanton, Calif., has preconfigured 31 industry-specific processes for the industrial manufacturing, home-building, warehousing and distribution, and construction industries. The processes address procure to pay, order to cash and new-product introduction. The Express offering, due this quarter, is optimized to run on IBMs iSeries platform and will leverage that companys huge reseller channel.

For its part, the Microsoft Business Solutions division is extending its offering for the public-sector vertical market with an enhancement of its Great Plains software suite, due this summer. It will use technology Microsoft acquired last week from Encore Business Solutions Inc. to add modules for fund accounting, grant management and public-sector financial management, said officials in Redmond, Wash.

Microsoft Business Solutions has been working on its reseller channel, according to the vendors latest quarterly statement. In the latest quarter, the unit was the only one of Microsofts seven divisions to post less than double-digit revenue growth, which the vendor attributed to poor execution of its U.S. business.

David Hurwitz observed Microsofts approach to SMBs firsthand when he oversaw the installation of Great Plains software as chief technology officer of Super Discount CDs & DVDs Inc., of Irvine, Calif. Microsoft needs to improve the way it provides incentives to resellers rather than simply focusing on upfront sales, Hurwitz said.

"They need to make sure people understand how to sell the software and how to evaluate the needs of customers," said Hurwitz, who is now CEO of Xfactor Consulting, in Laguna Beach, Calif. "These systems are hard. Its a long-term project. [Microsoft] needs to focus on making partners for the long term as opposed to selling all the software they can upfront, sticking it in there and then leaving."

PeopleSoft and SAP may have a better understanding of building customer relationships through partner channels, said Hurwitz, since they are used to long implementations.

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