Coverage of
The 2002 Microsoft Stampede Conference
By J. Carlton Collins, CPA 

General Session

The general session provided a very good executive overview of Microsoft’s strategies. Lynne Stockstead and Jodi Uecker Rust kick off the fact-filled presentation.

He Microsoft confirms the number of Team members (3,000), Partners (4,000), Solution Developers (900), and Customers (250,000).  

With these confirmed numbers, it is easy to see that Microsoft has a well established distribution channel with in-roads into many larger companies. If Microsoft plays its cards right, it can leverage this distribution channel in the future to deliver other Microsoft technologies to the existing 250,000 customers as well as anticipated new customers. Consider for a moment what it might take to empower this distribution channel to also market, sell, implement and train customers on products such as Microsoft CRM, BizTalk, SQL Server, .NET applications, Windows XP, Office XP, FrontPage, CE-based hand-held devices, MSN Internet Access, bCentral Web Hosting, Outlook XP, NetMeeting, Project, Visual Studio, Visual C++, Visual J++, business credit cards, and much more.

Thinking Out Loud - When you compare the 250,000 customer base to Best Software’s reported 2.9 million customer base, it puts things in perspective. Best Software’s customer base consists of many large businesses, but is primarily consists of smaller businesses that use entry level solutions such as Peachtree Complete Accounting, DAC Easy, and BusinessWorks. This comparison suggests that Microsoft’s current accounting software customer base consists of larger companies – which obviously an incredible strength for Microsoft. However, these numbers also tell us that Microsoft still has a long way to go to penetrate the accounting software market for small businesses – hence the push for SBM. However one could argue that Microsoft already has tremendous in-roads into the small businesses through Windows, Office, and other Microsoft solutions. If Microsoft did want to penetrate the small business accounting software market, it might do so by purchasing ACCPAC – a company with reportedly 500,000 to 600,000 customers – many of them users of the ACCPAC Simply Accounting entry level product. This purchase would give Microsoft the added opportunity to shift the ACCPAC product away from the pervasive, oracle, and DB/2 database solutions towards the SQL Server and MDE solutions. It has been no secret that ACCPAC has intended to go public for many years now – therefore it seems reasonable to assume that the company might be open to an acquisition by Microsoft.

Back to the General Session Coverage:

In this slide we see where Microsoft announce plans for the future for a single accounting software code base built upon the Microsoft frame work – the general idea is that 5 to 10 years into the future, a new stronger product will emerge with even greater capabilities. I can only imagine what this product might look like – but here are some ponderings:

1. User Interface – Microsoft’s futuristic solution might provide a single user screen provides users with access to accounting, reports, e-mail, Word processing, spreadsheets, CRM stuff, HR stuff, inquiries, etc – all tailored for that particular user depending upon their needs. A simple wizard will ask the user a series of easy questions about their tasks and preferences, and the resulting screen they see will be built to accommodate that specific user – and this screen will pop up any where in the system whenever that user logs in.
2. Microsoft’s futuristic solution might provide built in supply chain capabilities for companies of all sizes. A few simple wizards will ask the company about their preferences for supply chain operations and the web address of their suppliers and customers. From here, the Microsoft Futuristic solution will automatically create secure connections to all suppliers and customers. Thereafter purchase orders, sales orders, invoices and payments will flow swiftly and effortless back and forth through the supply chain based on preferences controlled by the companies in the supply chain. Control features will allow the companies to configure supply chain transaction behavior by individual supplier and customer. For example, favored and trusted suppliers might receive PO’s and SO’s automatically as they are entered into the system, while PO’s and SO’s intended for lessor known suppliers and customers are held up awaiting periodic approval and release.
3. Microsoft’s futuristic solution might include preconfigured hand-held devices – all in one units that serve as telephones, pocket organizers, data entry terminals, CRM devices, etc. I can picture in my mind a series of these hand-held devices – one for executives configured with digital dashboards serving up critical information such as cash balance, days in inventory, days in receivables, interest expense, budget variances, top customers, suppliers, etc. The sales representative hand-held series might be pre-configured to serve up customer sales histories, matrix pricing by quantities and customers, inventory quantities on hand by warehouse location, etc.
4. Microsoft’s futuristic solution might include strategic relationships and unprecedented levels of integration with large service companies such as UPS, Bank of America, American Express or Northwestern Mutual. For example UPS’s systems integration might be set up in such a way that they are automatically notified of shipments including quantities, weight, sizes, hazardous materials, bonding needs, etc and in return, UPS might automatically send back relevant information regarding scheduled pick up times, insurance coverage, anticipated delivery dates, special instructions. Bank of America might make arrangements to extend loan balances with fluctuate daily based on the customer’s cash balances – thus allowing companies to operate with the cash they need with minimal administration, and yet maintain loan balances at the lowest possible levels. Additionally, Microsoft’s futuristic accounting system might have built in algorithms that shift money around between investments on a weekly, daily or even hourly basis based on company cash balances, anticipated collects and payments, and other factors – all in the name of maximizing interest earnings.
5. Microsoft’s futuristic solution might provide a built-in “CFO to Go” (so to speak) in which key balances and ratios and monitored continuously and deviations outside of standard tolerances would be immediately reported to the appropriate personnel. I further envision a Microsoft agent (animated talking head) would pop up on a computer screen or hand-held device to alert parties of pending problems, milestones, or suggestions for better running the company. Users would be able to tailor the agent in appearance, voice, language – you name it.
6. Microsoft’s futuristic solution might actually provide the type of workflow companies really need such as tracking of all transactions through the transaction process – complete with approval level limits at every step of the way. Data warehouses might actually tabulate, organize and store every know possible report for every known period and in every known format so that users can access these reports at will (permissions willing) from their computers or hand-held devices.
7. Microsoft’s futuristic solution might address the heavy demand many companies have for resource centric solutions that treat all assets, personnel and even raw materials as strategic resources that must be mapped on a calendar, scheduled, and utilized as efficiently as possible. Such a system should accommodate real world activities such as vacation time, sick time, training time etc for personnel, and maintenance time, repair time, setup and break down time, and delivery time for assets, etc.
8. Microsoft’s futuristic solution might provide a supply chain solution that automatically takes advantage of trading exchanges to help companies who use the system find and purchase the goods, materials and services they need based on a variety of factors such as price, availability, reported quality, location, ancillary services, etc. In this case I am predicting that tiny little web bots may become tomorrow’s purchasing agents.
9. Microsoft’s futuristic solution might provide extensive “drillability” not just down and around in one’s own accounting system to scanned in bitmapped images of purchase orders and handwritten notes, but perhaps reaching further into the suppliers or customers accounting system as well. I can foresee where this would be beneficial to many companies.
10. Microsoft’s futuristic solution might data entry by voice, as well as voice translation on the fly. Who knows, maybe there is a cerebral Cortex module in the works that will simply suck the transactions right out of the data input operators head and populate the accounting system accordingly.

Again, I digressed – my apologies – back to the Microsoft General Session coverage.

The above slide is actually a very good slide, but is difficult for you to read (I was seated on the front row and the slide was 20 feet above me). This slide suggests some of Microsoft’s vision for a new product in the future and suggests that a core solution will become the glue that ties dozens if not hundreds of separate applications together. Microsoft’s point is that they are laying the ground work for developers to create specialized solutions that will fit the Microsoft model. Additionally resellers will be able to carve out their own special niches as well.

Above we see Microsoft simplify their strategies into 5 general changes that we will see in the near future. These strategies will are discussed below:

Lynne Stockstead shown above is one of my favorite people at Microsoft. About 12 years ago I met Lynne at her desk in Fargo North Dakota, where her office was filled with just about the same competitive accounting software code as my office back in Atlanta. At the time, Lynne was the only other person in the US that I knew of that tackled as many different accounting software products as I. Lynne has done very well, she is one of the most knowledgeable and likeable person on the planet. She is one of the reasons I believe Microsoft Business Solutions will soar in the years to come. It was great to see her on the main stage. You go girl.

Lynne discussed the new product positioning for the Microsoft product lines. As you can see in this slide above, this is where these products have been previously positioned, and the slide below show where those products will be positioned in the future.

Lynne explained that Dynamics and eEnterprise will be merged into a single Great Plains product, and that Great Plains, Navision, Solomon, and Axapta will be scaled into different editions – allowing all of these products to meet the needs of small and large companies alike. Solomon will be positioned as a project and professional services solution, Great Plains will be positioned as a financial solution, Axapta will be positioned as a high-end manufacturing and distribution solution, and Navision specific niche is yet to be decided. Of course SBM plays at the bottom and is targeted towards small businesses.

From here, Microsoft overlays the CRM solution across all of these applications to suggest that this solution will be tailored for virtually all companies of all sizes, regardless of which Microsoft product they are using.

The slide below address Microsoft’s strategy concerning brand loyalty and brand name awareness. As you can expect, Microsoft plans to leverage it’s name and establish the names Solomon, Great Plains, Navision, Axapta, and Solomon as household names.

Next Microsoft discussed changes to its pricing strategies. Microsoft announced that they would be simplifying the pricing across all product lines. Now, the same modules and user licenses for Solomon are identically priced to that of Great Plains. This allows customers to choose products based on features, not pricing. The pricing for Great Plains was actually reduced by approximately 40% in order to achieve uniformity.

Marketing

Next Nigel Burton discussed Microsoft’s aggressive plans to generate leads for their partners. It was obvious to all that Nigel has developed a strategic plan that will result in the marketing of accounting software at unprecedented levels in our industry. Nigel’s plans and strategies, more than any others, should send shivers down the spine of Microsoft’s competitors. Likewise, Nigel’s efforts put smiles on the faces of the Partners in the room. The following morning Geni and I had the pleasure of having breakfast with Nigel and I can tell you personally, based on our discussions, Microsoft has the right people, the right strategies, the financial resources, and the commitment to achieve it’s goals. Nigel has been able to consolidate the marketing personnel from five different companies (Microsoft, Great Plains, Solomon, Navision, and Damgaard Axapta) in order to select the cream of the crop as his army of marketers. Talk about talent. Microsoft is now loaded with marketing talent that is very experienced in the accounting software arena.

Microsoft’s marketing strategy is summarized in the slide below:

The slides below shows that Microsoft plans to generate 15,000 leads in 2002 through 7 million direct mail pieces, CFO summits, executive briefings, more than 1,200 events, and a pile of telemarketing. Nigel announced plans to double the number of leads to 30,000 in 2003.

Also impressive was the support web site that Microsoft unveiled in which leads are handed out to Partners and resellers along with recommended tools (various letters, articles, etc.) designed to make it easier for the reseller to pursue the lead. These letters and articles are all provided in a Publisher format, and to make sure everybody was prepared to use these tools, Microsoft handed out free copies of Publisher to everyone who attended the conference. You can see a sample letter in the slide below:

The screens below show sample lead screens.

The screen below shows a sample lead screen, along with 4 recommended letters for Partners to use in pursuing that lead.

I am not sure what this screen represents – I must have been distracted during this part of the program.

Below is a picture I took of Geni Whitehouse (Accounting Software Advisor) and Susan Thompson (Microsoft) at the General Session with the main stage in the back ground. These are two of the finest people you will ever meet.

Presented below is a picture of Doug Burgum descending (repelling) from the rooftop of the Minneapolis convention center onto the main stage.

I hope that you enjoyed this coverage. If you have question, please e-mail me at carlton@accountingsoftwareadvisor.com. Thank you.

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