Goutam Das

HYDERABAD: In less than a year since it has been around in India, Microsoft's ERP offering for SMBs has found more than 300 takers. In the next one year, the growth for Microsoft Dynamics, as it is called, may well be in triple digits, MD of Microsoft Corporation India, Neelam Dhawan, projected.

The fast customer acquisition in this segment can be attributed to the ground-up engineering of the product as opposed to customization of an ERP solution meant for large enterprises, as many high-end vendors seeking greener pastures in the SMB segment now do. The top tier market is now saturated with the number of large enterprises not having ERP counted on fingertips.

The traditional Indian small market - which till sometime back probably had not felt the need for an ERP - is undergoing a change - companies in the Rs 5-50 crore range had automated their accounting practices but had not automated anything beyond that. In cases where this had been done, the solutions came mostly from local unorganized vendors who implemented 'home-grown ERP'. With many companies in this segment competing internationally now, the need for having better processes in place has been felt.

Microsoft's advantage: It could perceive the opportunity in the small market and start at the bottom of the pyramid. “Our software requires even less hardware to run on it because it is meant for a smaller environment. It does not have overheads. Any other software, which comes from 'enterprise downwards' (the large enterprise), will have overheads on the hardware that is high. Our solution needs smaller servers and the application is efficient,” Dhawan said, on the sidelines of a media conference here.

It is easy to use because the ERP links into Exchange and Office. The implementation time is less at three weeks to a month. And it is potentially a complimentary solution to SAP - you can have SAP at the backend and Dynamics in the front - for a company having a huge network it doesn't make sense to have SAP everywhere - the MD felt. The hub and spoke model, as this approach is called, is also being eyed by accounting software king Tally, who is entering the mid-market ERP space. With 300 customers, Microsoft already has headway in the game and it will be interesting to watch the battle here when Tally goes full blast, again with a ground-up design meant only for this market.

Disputing the perception that customers are moving towards an integrated suite as opposed to stand alone products, Dhawan said in India, and particularly among the SMBs, the modular approach is the one that is popular: “The customer here wants to start with something small. If it works and he sees his investment protected, he would go in to implement the next module. Most of Microsoft Dynamics' roll outs started modular.”

Therefore, she is not overtly worried about certain parties calling CRM and BI as standalone products dead. “BI or CRM is so complex that whoever says its dead may be right if they don't make it simpler. Why are we excited about this space? Whether it is CRM or BI, we link it back to Outlook and messaging to your Office. When a customer is in the CRM, it is like he was in Office. We will be successful because we are providing a framework which every person is used to,” she said.

Secondly, in BI, her confidence stems from the fact that one can give commands in spreadsheet or Outlook and need not get a software person to write it. “If you are deep diving into your dealer network to find out which dealer is buying the most and you required a software guy to come and do it for you every time, it will not work. That's where we are confident to win.”

While Microsoft is certain to run into SAP even if it pitches its ERP as SAP's complimentary product, the two companies are also collaborating on the much talked about Mendocino project – which may be a turning point for SAP. Report writing, the biggest customization that happens in SAP, will be the most simplified thing to do once Mendocino happens. “If you have SAP at the back end and want to cull out some information and report, today, you have to call in one of the big implementer who will then write a program to do it. When Mendocino comes, you will go into Office, the Excel Spreadsheet, define the rows and columns you want and it links into SAP and pulls it out. This will make the front end of SAP very attractive to customers,” Dhawan said.

In the consumer segment, where affordability is an issue, Microsoft is coming up with a 'good, better, best' product line up to cater to all categories of buyers. At the low end is the upcoming multi-lingual Windows XP Starter Edition, especially created for first time users, and at the top end is the Media Center, which is doing great business. Announced in July 2005, it has so far sold more than 30,000 and till June this year, Microsoft predicts the figure to be 80,000.

Also coming up is the Windows Vista, priced specially for the government and education sectors as also volume buyers in select program. It will have easy payment plans through partners.

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