Monday, January 19, 2004

Microsoft seeks its next cash cow

Microsoft seeks its next cash cow
"The rewards, risks and challenges are epitomized in Microsoft's $10 billion dream for its Business Solutions group, which produces ERP, CRM and other applications to automate business functions for small and midsize businesses (SMB), which Microsoft defines as those with 1,000 or less employees.
In the past two years, Microsoft built the group based on its largest acquisitions ever, laying out $2.5 billion to acquire ERP vendors Great Plains and Navision.
In the past year, the division publicized an 84% gain in revenue - mostly because of the close of the Navision deal - but was quiet about its 44% spike in losses.
Undaunted, CEO Steve Ballmer is pegging the division's yearly revenue potential based on selling applications, and supporting infrastructure and services at $10 billion by 2011. The goal is to draw users to the business applications and in turn sell them client operating systems, the Office suite and infrastructure servers to support the rollout.
To understand the magnitude of its ambition, $10 billion is just short of the revenue generated in 2003 by Microsoft's top-grossing Windows Client division, which produces software that sits on 94% of corporate desktops worldwide. The $10 billion would make Business Solutions bigger than current-day Oracle or SAP, longtime business application players that will compete with Microsoft, and untold others to capture a slice of more than 45 million SMBs."
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