Microsoft business software on slow roll out

While Microsoft this week mapped out a few baby steps it will take this summer to advance its current lineup of business applications, the company gave clear indication that development of the future generation of the software may be moving at an even slower pace.

At its annual Convergence Conference in Orlando, Fla., the company announced improvements and integration for three of its business applications – Great Plains, Navision and Solomon – and promised enhancements to the Microsoft Business Portal that would integrate it with the business applications. The company also said the next release of Microsoft CRM would slip into 2005.

Having built its business application portfolio via acquisition, Microsoft is looking to create a common interface for the applications modeled on Office 2003 and to integrate the applications, including Microsoft CRM, more closely with Outlook. Business Portal also will be used to integrate the applications into a single interface.

“They figured out from last year that the issue of product integration and a smooth transition among the products is not trivial and will take longer to create than they think,” says Katherine Jones, an analyst with the Aberdeen Group. Microsoft is filling in product gaps and trying to promote a “fuller product set,” Jones said.

But the company is taking a more guarded tone in regards to Project Green, its plan to develop a set of enterprise resource planning and customer relationship management applications from the ground up using a single code base.

“They are downplaying the coming of Project Green,” says Albert Pang, an analyst with IDC. “It is still a very nebulous vision and they don’t know how it all synchronizes with Longhorn.“ Longhorn is the next version of the operating system that is expected to ship sometime in 2006 or 2007.

Microsoft officials say Project Green is still several years away and announced in Orlando that the existing business applications would be supported until 2013. Under the Microsoft product lifecycle formula, which calls for five years of support after a product’s release, active development of the applications would cease in 2008 and presumably replaced by the Project Green software.

Microsoft has said that its hopes to push its Business Solutions unit to $10 billion in revenue by 2011. During Microsoft’s fiscal second quarter, which ended in December, the Business Solutions group posted a loss of $69 million on revenue of $190 million. In fiscal 2003, the group posted $567 million in revenue and $254 million in losses.

“The problems and obstacles for Microsoft Business Solutions is that it is kind of like a dragon with multiple heads,” Pang says. “Which one will lead?”