Microsoft's business app plan

Microsoft's strategy seems to show that the software giant will skip shopping for vendors and shoot to be the major infrastructure provider.

3 min read
Microsoft is buying Baan. Microsoft is buying Lawson. Microsoft is buying Joe's House of ERP.

If you listen to the rumors, the world's largest software company has its eye on the enterprise resource planning market as its next big conquest.

But Microsoft's enterprise resource planning strategy seems to show the software giant is not likely to take on such an endeavor, shooting instead to be the major infrastructure provider behind the transactional and business automation software systems.

"We work with all kinds of vendors and our whole purpose in life is to help [independent software vendors] and to help them be successful on our platform," said Holly Henson, Microsoft's group manager for enterprise resource planning and applications. "We are clearly not in the business of getting into ERP or any other business. We are locked into being an infrastructure supplier."

Analysts seem to be buying Microsoft's line, saying that Microsoft's strategy and products are in keeping with its mantra that it wants to be the plumbing, not the fixtures, in the enterprise resource planning house.

"Never say never but there is too much happening at Microsoft indicating that [buying an ERP vendor] would be counter to a lot of their strategic thinking," said Joshua Greenbaum, analyst at Enterprise Applications Consulting, in Berkeley, California. "I have hammered everyone I could on this question. You could not rehearse that many people that well. Everyone says the same thing: Microsoft does not have any intention of being that kind of vendor."

Microsoft does seem to have the intention to provide the plumbing for ERP application packages with its SQL Server database, Windows NT server operating system, and Windows PC operating system. Microsoft has also launched such initiatives as Windows DNA (distributed Internet applications architecture), a framework for building reusable component-based software systems using Microsoft's component object modeling system.

Windows DNA is designed to be a foundation for other software vendors to build their products to take advantage of Microsoft's software infrastructure. Microsoft has also aligned Windows DNA along vertical markets with a framework for manufacturing, health care, and other specific industry sectors.

Baan is using the framework to build its new component-based system. SAP has also signed on to Windows DNA and is heavily supporting COM.

Other indications that Microsoft is happy where it is include the fact that it is making deals with most of the enterprise resource planning vendors to port their products to Windows NT and SQL Server. Also, Microsoft is installing SAP's products internally and standardizing its business on R/3, which would put it in a difficult position if it were selling one product and using another for its own use.

Some have pointed to the Microsoft repository project as evidence that the vendor is ready to enter the enterprise resource planning space. The repository stores component objects for later use. It is key technology necessary for deploying component-based software systems of which all of the enterprise resource planning vendors are currently developing.

But Henson said Microsoft's repository is simply a tool for other software vendors to use to build their own component applications.

"We solely want to have the repository there and enable ISVs to use it to build applications," Henson said. "There is no connection between the repository and plans to enter the ERP or any other software market."

But then again, this is also the company that denied the importance of the Internet then changed its entire business on a dime to make the Internet the foundation of everything it does.