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Is Microsoft leaving the small business market?

I notice that Citydesk is aimed at the small scale user, a market which used to Micorsoft's bread and butter.  It is suprising that Microsoft never released such a prodcut themselves.

It strikes me that all of Microsoft's efforts are now concentrated on the enterprise, with the needs of the small scale users becoming more and more marginal.

The recent evolution of Office seems to reflect this.  For example, Access was an extremely useful database that could produce easily installed standalone applications.

Now Access is dependant upon the SQL Server desktop edition.  Deployment is so much harder.

Another example is the lack of linker supplied with .Net.

Would you agree with this?  More importantly, is this opening up the market for small software houses like Fog Creek?  What is the best way to exploit this?

Ged Byrne
Tuesday, March 16, 2004

I doubt if they are making anything like a conscientious decision to focus on enterprise at the expense of small business. I'm sure they're more than happy to sell to small businesses. But they have become a little bit tone-deaf to small business because their thousands of sales reps only deal with large corporate accounts -- small businesses are abandoned to the channel for selling. And they're such a big company themselves, full of big company corporate types recruited out of college who have never worked in a small company that they don't really know what goes on in small businesses.

The best way to avoid competing with Microsoft is to stick to verticals. Microsoft always does horizontal applications, never verticals. You'll never see Microsoft Tire Warehouse 1.0.

Joel Spolsky
Fog Creek Software
Tuesday, March 16, 2004

The way big corporations work is that they have a threshold for new business sales potential. When I was at GE about 10 years ago they used to say that any new product had to eventually produce about $100 Million in annual sales to be worth even getting into.

The group I worked with had software which was technically advanced but after doing a market study found it would only garner about $3 to 5 Mil per year. GE spends more than 3 million a year on paper and pencils. It just wasn't worth their trouble to even consider further development. The other players in the field were safe from
any GE competition because they were likewise below the radar.

Jack
Tuesday, March 16, 2004

Ged,

Since when is Access dependant on MSDE?

dmooney
Tuesday, March 16, 2004

"The recent evolution of Office seems to reflect this.  For example, Access was an extremely useful database that could produce easily installed standalone applications.

Now Access is dependant upon the SQL Server desktop edition.  Deployment is so much harder."

I agree with dmooney.  What are you talking about?  Certainly Access 2002 is better integrated with SQL Server than any version before when you're doing an ADP, but that doesn't mean you can't do Jet-based MDBs anymore.

Kyralessa
Wednesday, March 17, 2004

It seems someone noticed the gap in their market hence the Great Plains software acquisition.  (Now part of Microsoft Business Solutions.)  I'm still not convinced they can pull it off successfully and make huge inroads but MS is attempting to build products for midsize businesses.  I'm not sure where the difference between small and midsize really lies in this case.

But as Joel has mentioned so many times, they're interested in building horizontal apps like CRM rather than vertical market software.

Jeremy
Wednesday, March 17, 2004

Read "SAP and Microsoft fight for place at bottom" from IHT:

http://www.iht.com/articles/510690.html

George Illes
Wednesday, March 17, 2004

Access 2002 doesn't have to use MSDE?

Somebodies been wasting my time when they could have been using Jet!

That is really annoying. >-(

How wonder how much more blame Microsoft take for other people.

Ged Byrne
Wednesday, March 17, 2004

Microsoft may be thinking that small businesses are a lock to buy Windows, and as such, don't require much attention.

You don't see many U.S. companies with 25 people on anything but Windows.  If Linux threatens this position, I'll bet you'll see MS strike back in a big way.

Bill Carlson
Wednesday, March 17, 2004


  How wonder how much more blame Microsoft take for other people.

Repeat after me, never trust anyone telling you the limits of the technology YOU program with.  They are wrong more often than they are right.

As for msde, I disagree with you, it is a better fit than .mdb for embedded applications.  Mostly because it requires more up-front knowledge, and keeps more of some people away:  those people who don't know the differences between a file, a database and a table, especially.  I'm eager to see them gone

Eric Robibaro
Thursday, March 18, 2004


Current State:

  Microsoft is trying to scale .net up to the enterprise ("BIG") market.  IBM is trying to scale J2EE to the mid-size market.

Prediction:
 
  Microsoft will have some success in larger organizations, but will never get into DoD / GM / GE sized organizations for enterprise applications. (IE: The expense reporting software used by every single employee)

  IBM will generally fail to enter the mid-size market, which, Ironicially, is a market they pretty much owned 10 years ago with the AS/400.  WHY?

1) Java "Enterprise" projects tend to automate things that save 10 cents per employee per month.  When you have 100,000 employees, the ROI looks really good.  When you have 1,000 employees ...

2) What medium-sized companies want is ALLMOST shrink-wrapped software they can customize, and they want it cheap.  You don't get that from IBM global services - you get an army of consultants charging $200/hr.


Right now, the biggest gap I see in the market is consultingware that is vertical in industry for  medium-sized  companies.  The gap is small enough that microsoft and IBM don't want it, and would prefer to compete for horizontal apps for medium sized companies --- at which neither of them will really succeed.

JMHO.  MS will continue to own the small business market, but continue to ignore them to focus on "growth opportunities."  IBM will continue to own the large buisness market, and continue to pay attention to them because of the size of the fees they are able to generate.

regards,

Matt H.
Friday, March 19, 2004

We can only hope.

Mike
Friday, March 19, 2004

"Microsoft will have some success in larger organizations, but will never get into DoD / GM / GE sized organizations for enterprise applications."

So we should stop?

http://www.microsoft.com/net/momentum/

http://www.microsoft.com/resources/casestudies/CaseStudy.asp?CaseStudyID=13331
http://www.microsoft.com/net/business/businessbenefits.asp
http://www.microsoft.com/resources/casestudies/CaseStudy.asp?CaseStudyID=11626

Sincerely,
Philo, your local Microsoft lackey

Philo
Friday, March 19, 2004

I've also seen Microsoft shift from the fewer shrinkwrap developers to the more numerous enterprise developers.

From what I've seen, MFC is poised to be dethroned by wxWindows or QT.  Many shrinkwrap developers are stuck at Visual C++ 6.0 or 7.0 and see .NET as something completely useless for traditional software.

Anonymous
Wednesday, March 31, 2004

Not sure about the US, but over on my side of the planet (New Zealand) MS is incredibly focused on the small business.  The majority of companies here are very small, in fact, we barely have any corporations.

There are great products like small business server and office integrates really well with that, so do most of their other stuff.  It also helps that they are quite flexible with their pricing.

Andy Watson
Thursday, April 08, 2004

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