Microsoft addresses need for small business software.

The Microsoft Office Small Business Accounting 2006 (MOSBA) product launch in Redmond, Wash., in September featured all the Microsoft top executives--including Steve Ballmer, Doug Burgam and the big guy himself, Bill Gates.

The launch of MOSBA was first announced in May 2005, and uses existing Microsoft Office products, including Excel, Word and Outlook, to perform accounting and business management tasks. Bob Lewis is the senior marketing manager of Accountant Relations in the U.S. Small Business group assigned to the task of making accountants aware of the product, including giving it away at several accounting trade shows. We met up with Bob and his team in both cities, and traveled to Redmond twice to stay abreast of this development in small business accounting software.

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Bob described MOSBA as being, "... more than accounting. It's a business management product that works how the small business manager works." He referred to a four-year study of the daily movement of the small business manager by a team that included, of all groups, anthropologists. "We studied 1,000 small business managers and found several friction points," he says. "For example, the business manager did not have the right customer information, like credit limits."

Cindy Bates, Microsoft's general manager of the product, addressed a standing room-only crowd in Chicago. Later she told me that she was, "happily surprised that 2,500 accountants had already signed up for the Microsoft Professional Accountant's Network (MPAN)." A line of accountants that approximated 2,000 waited to obtain their complimentary copy of MOSBA.

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Doug Burgam, senior vice president of the Small- to Mid-sized Business Group. said that MOSBA, "represents a great stand-alone product and a long-term feeder system (for Microsoft Business Solutions) like Great Plains in North America. There are holes in the QuickBooks product in audit trails and double-entry, and MOSBA aims to fill those holes. It also will bring users up to date on whatever version of Office they may still be using."

I reminded him of the earlier Microsoft accounting effort, "Profit." He responded that MOSBA will be marketed and supported heavily. "QuickBooks has not had a viable number two (release), and Sage has barely upgraded Peachtree since they acquired it," he says.

Orlando Ayala, senior vice president of the Small- to Mid-Sized Business Market, says that the new Microsoft business solution effort will leverage "400 million Office users and 1.2 billion Windows users worldwide. This is role-based software with Office leading the charge."

Bill Gates, chairman and founder says, "I went on a bi-annual think week (to understand the framework) by studying 750 midsized companies." Gates described the key developments, beginning with Moore's law doubling chip capacity every two years. This means that "Wintel performance will not be a factor that holds things back. This is coupled with wireless and portable phone advances. Then, adopting XML and wrapping protocols like WS (Web Services), you can connect disparate types of software. This approach is service-oriented architecture (SOA) that has evolved into a digital workstyle and lifestyle," he explains.

The objective is IT enablement, providing the ability to close an order in the field at this level. The goal is best practice enablement in the fastest way possible.

Another announcement made at the product launch event was taking the business solution products, Great Plains, Solomon, Axapta and Navision, and coordinating them from code name Green to Dynamics as of Sept. 7, 2005.

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"Dynamics speaks to unique software capabilities," says Gates. "It will have a richer connectivity to Office 12, the next stage of Office to be released next year. Microsoft Dynamics is an across-the-enterprise effort, and SharePoint is replacing server based applications especially built into Web sites."

Gates also announced that Microsoft Centro will ship along with Windows Server Longhorn next year. "Small Business Server was a runaway success," he said. "Centro is an effort to bring this success to mid-sized businesses. While it can't restrict it to one server, it will use built-in intelligence with a server based Excel."

He adds, "We are getting more productivity out of Solomon and Great Plains based on record level of research, by lever-aging the role-based approach."

I caught up with Bill Gates coming off an elevator, shook his hand congratulating him on his speech, but I'm pretty sure he didn't remember me. Bill Gates says, "Small businesses need cash flow and software that does not address it does not serve small business. Their software is not integrated. Office Small Business edition with 3 million in sales was the most successful product sold into small business."

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Rajat Taneja, general manager of Small Business Applications and Online Services, describes the 6.5 million incorporated businesses, 15 million SOHO businesses and 21 million incorporated business worldwide that they studied as similar.

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"The study emphasized the idea of converting a quote to an order, if the software spoke clearly. So, one idea was to improve on the late 80's small business accounting advancements when the prior window (on the desktop) was not available," he said. Rajat's team began in 2001 to serve small businesses and released business connectivity for Outlook in 2003.

Rajat enlightened me that when Luca Pacioli wrote his book in 1494 on math and geometry, it contained only 26 pages of double-entry accounting. "This law is followed internationally since the beginning of commerce," he says. "MOSBA has stronger adherence to accounting sanctity." The product connects accounting with marketing, for example.

"Before we allowed one end-user to use the software, we had 1 million transactions run through the system before we were ready to release the posting engine," he states enthusiastically. Eleven patents have been applied for." There are 5,000 vertical extensions to accounting products. The Software Developer Kit (SDK) for MOSBA had 20,000 downloads to produce vertical extensions. MOSBA is .NET based, with MS SQL desktop edition, so you don't need a server, and the database limitation is 2 gigabytes. An integration was recently announced with Creative Solutions Write-Up to connect to MOSBA on the client side. Microsoft supports merchant accounts with whatever bank the small business has or uses Chase bank, which is different from QuickBooks, it was explained.

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MOSBA stand-alone sells for $149 and Office Small Business Management Edition for $399 for the upgrade. Accountants get the product for $299 when they join the MPAN Microsoft Professional Accountants Network; 5,000 retailers began selling the product Sept. 7, including Best Buy.

The 6,500 Microsoft Small Business Specialists can also resell, after they receive their training on Small Business Server. Steve Ballmer notes that "five years ago, Small Business Server was introduced and had success. Probably the best thing we aspire to is to be a much more complete supplier to the mid-market business by taking out a whole level of complexity. We sent people out to observe and become more deeply involved in the business of the business. There are so many small business customers that you cannot confuse yourself into believing you can have a personal relationship, but mid-market wants a stronger relationship. They spend $20,000 to $50,000 a year on IT, so we launched Midsized Business Centers to serve this market better."

By T. Allen Rose, CPA