Microsoft's Plans for Its Small Business Accounting Software

REDMOND, WASHINGTON--Microsoft designated September as the release date for its Microsoft Office Small Business Accounting software, which is designed to help small businesses operate better. The software is expected to be a competitor to Intuit's QuickBooks, Best Software's Peachtree Accounting and Simply Accounting, and others.

Microsoft will sell Office Small Business Accounting, or Office SBA for short, as a stand-alone product and as part of a new Office bundle called Office Small Business Management Edition, it announced today at an event for independent software vendors. It currently is available in a beta test version.

The software was developed jointly by Microsoft's Office group and Microsoft Business Solutions (MBS), the Microsoft group that sells business applications to small and medium-size businesses and divisions of large enterprises. It will offer an easy migration path to MBS products, Microsoft has said.

Highlights

The new Office bundle will include the familiar Office 2003 applications, along with an updated version of Outlook 2003 with Business Contact Manager, Microsoft has said. Office Small Business Accounting was first announced in November. At that time Microsoft said it planned to ship the product in late 2005. Pricing has not yet been disclosed.

With the new product, small businesses will be able to manage customer, financial, and business processes, according to Microsoft. Payroll functionality is offered through integration with services from outsourced payroll services provider Automatic Data Processing.

Microsoft is aggressively going into this new market, gunning for millions of customers. There are over 70 million small businesses worldwide, 40 million of which have PCs and about 20 million of which are in the United States, said Orlando Ayala, senior vice president of Microsoft's Small and Midmarket Solutions & Partner Group.

Reaction

During a presentation at the event, Ayala pitched the new Office SBA as an opportunity for Microsoft partners. Microsoft will provide basic business accounting and management functionality, and independent software vendors can offer applications tailored to specific industries and tasks on top of the new Microsoft software, he said.

"Going for 40 million customers is not an easy thing to do," Ayala said. "Clearly, Microsoft alone cannot get it done."

That message resonated well with vendors attending the event, including current Intuit partners. Atlas Business Solutions (ABS) of Fargo, North Dakota, currently offers seven applications that work with Intuit's QuickBooks, but is examining the Microsoft opportunity.

Microsoft is serious about conquering the market for small business accounting, said Paul DeGroot, an analyst at Directions on Microsoft in Kirkland, Washington. "Microsoft's message is that they intend to own this market," DeGroot said.

Office SBA will be available in the United States first, with other countries set to follow about 18 months later.