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New Microsoft package targets Intuit

Will a new accounting tool threaten the QuickBooks maker? Or will the software giant be left "with a bloody nose"?

Taking aim at Intuit's QuickBooks, Microsoft on Wednesday announced new accounting software for small and midsize businesses.

The company?s Small Business Accounting 2006, which has been in the works for some time, comes in two flavors. The standalone accounting software sells for $179, though Microsoft is offering a $30 rebate at launch. And the Small Business Management product bundles the accounting software with Office components, including Outlook, Word, Excel and PowerPoint. For new customers, the package costs $569, after a $100 rebate. It's available for $399 after a $100 rebate for existing Office customers.

While there are plenty of other accounting programs in the market, Microsoft is touting the deep integration of the new software with its widely used Office programs. The new software can be used to allow a salesperson to turn an opportunity into a quote and then an order, said Microsoft vice president Steve Guggenheimer, who heads the company's small-business effort.

"It's the workflow aspect and how easy it is," Guggenheimer said in an interview ahead of Wednesday's launch. Microsoft is launching the product as part of its Microsoft Business Summit, a conference geared primarily to midsize companies.

Microsoft has also built the program so other companies can customize it for various industries or create additional services. For example, Microsoft has partnered with Chase Merchant Services for credit card processing, ADP for payroll and Checkfree and Deluxe Small Business Services for check writing and bill payment.

Intuit vice president Dan Levin noted that Microsoft has tried to take on QuickBooks and other Intuit products before.

"They've come up against Intuit six times in the past, and each time they have retreated with a bloody nose," Levin said.

Levin also said that Intuit's $99 QuickBook Simple Start is a better option for first-timers. "They are coming in at the wrong price point with a product that's way too complicated," he said.

In addition to QuickBooks customers, Microsoft is also targeting the 40 percent of people today that use Excel or no dedicated program, Guggenheimer said. "Competing with that, I think, is relatively straightforward."

IDC analyst Ray Boggs said that although Intuit has also built-in tools to connect with Office applications, Microsoft has the ability to bundle its products together. "That's something that Intuit is not able to do," he said.

Intuit plans to launch QuickBooks 2006, a significant update to the program, in November. Levin wouldn't say whether Microsoft's effort will influence any further price changes.

"We're not making any announcements about the pricing of QuickBooks," he said.