Microsoft to Ship New Office Small-Biz Release in 2005

"Magellan," which will add small-business accounting and payroll services to Office, is Microsoft's attempt to go head-to-head with Intuit's QuickBooks.

The gloves are off. Microsoft Corp. is ready to take on Intuit for the dollars of small-business managers.

Microsoft confirmed on Friday—a few days earlier than it originally planned—that it is working on a new version of Microsoft Office aimed specifically at small-business managers. The new product, code-named "Magellan," will ship in late 2005, Microsoft officials said.


The new Office release will include the existing Office 2003 core set of programs, plus a new product, Microsoft Office Small Business Accounting. It also will include an updated version of Outlook 2003 with Business Contact Manager, the personal-information-management product that Microsoft first rolled out as part of Office Small Business Edition 2003.

Microsoft is partnering with Automatic Data Processing Inc. Small Business Services to offer integrated payroll services as part of the new Office release. Users will be "presented with tightly integrated self-service and fully outsourced payroll services, including signature-ready tax forms, integrated checks and other online forms, as well as support for direct deposit," according to a Microsoft press release, issued Friday.

Microsoft is aiming the new Office SKU squarely at Intuit, a company that Microsoft attempted to acquire in 1994. Microsoft was interested in Intuits Quicken personal-finance software, and as using Intuit as a conduit to gain a larger share of the online banking/finance market. After the Department of Justice made it clear that it might not look kindly on a Microsoft acquisition of Intuit, Microsoft dropped the attempted purchase.

More recently, Intuit launched in late October its 2005 version of its QuickBooks small-business line.

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As part of its QuickBooks 2005 rollout, Intuit launched a new, in-house payroll-processing service for accountants and small businesses called QuickBooks Enhanced Payroll Plus.

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