MS targets SMBs with low-cost software

By Reed Stevenson

SEATTLE: Microsoft Corp. has unveiled new server software that it said gives smaller firms the ability to run big-business computer systems for a fraction of the cost.

The introduction is part of a push by Microsoft to sell up to $10 billion in software to small business by the end of the decade.

Microsoft said at an annual conference in New Orleans that gathers the 5,500 resellers, dealers and consultants who sell its software that the Windows Small Business Server offering was designed to allow smaller businesses to implement cheap and effective corporate computer systems quickly.

Instead of dedicating different computers to different server tasks, the Small Business Server software is designed to be loaded onto one server computer with networking, e-mail, secure Internet tools, file and printer sharing, as well as backup capabilities straight out of the box.

At stake for Microsoft, which is facing slower growth of its core Windows business, is a piece of the software market for the roughly 40 million small and medium-sized businesses around the world that it is betting will account for a $10 billion revenue stream by 2010.

Redmond, Washington-based Microsoft is betting more than $2 billion in research and development on its bid to take that market share.

To achieve that goal, Microsoft's Chief Executive, Steve Ballmer sent his top salesman, former global sales chief Orlando Ayala, into its Business Solutions organization to set Microsoft's sales strategy for the fragmented small and medium-sized business software market.

"Small business owners don't want to focus on information technology, they want to focus on their business," Ayala told Reuters.

The debut of the small business server software follows on the spring launch of Microsoft's newest enterprise-grade server software for managing computer networks, Windows Server 2003.

Microsoft is also introducing a new iteration of its Office software product. Office Small Business Edition is set to be released later this month and will feature applications and tools geared toward that market.

Ayala argues that the stack of Microsoft software that can be readily implemented by small and medium-sized businesses is the software maker's most competitive edge against Linux, the open-source system that can be copied and modified freely.

While Linux is free, it requires constant upkeep and maintenance, Ayala said. By contrast, the Small Business Server software, for example, can be set up in 15 minutes, Ayala said.

"The (software) industry has underperformed in serving this segment," Ayala said, pointing to a study commissioned by Microsoft that argued that businesses can recoup the cost of setting up with its software in between a little over a month to two years.

© Reuters