By now, we all know that Microsoft (MSFT) has entered the enterprise applications space with its acquisition of Great Plains and Navision. These two acquisitions gave Microsoft four enterprise suites--Great Plains, Solomon, Navision, and Axapta--which it sells through Microsoft Business Solutions and its reseller channel. But what is not widely known is that Microsoft, at the same time, has been working on an entirely new product line, code named "Project Green," that will be tightly integrated with Microsoft server and desktop operating systems. Microsoft CRM, released in January, is an early deliverable from Project Green.
Project Green addresses one concern that I've had about Microsoft's acquisition of Great Plains and Navision--that neither vendor's products were totally aligned with Microsoft's technology. For example, Axapta, which is arguably the product with the greatest breadth of functionality, is written in a language called X++, using a development environment called MorphX, and can run on both MS SQL Server and Oracle databases--not exactly what one would call a pure Microsoft architecture. In fact, my recommendation has been that if you are looking for an ERP system built today wholly on Microsoft technology, such as Visual Studio .NET, you'll need to look outside of Microsoft to a product such as Syteline from MAPICS.
But Project Green changes all that. Microsoft clearly is not waiting for incremental upgrades to Great Plains, Solomon, Navision, and Axapta to deliver those applications under pure Microsoft technology. In parallel, it is starting from scratch and plans to begin releasing the new Green apps in 2005 in parallel with Microsoft's next-generation operating system, known as Longhorn.
Although this strategy is entirely rational from Microsoft's standpoint, it might not be so welcome if you are an existing user of Great Plains, Solomon, Navision, or Axapta. After all, if Microsoft is starting over from scratch, what does that mean for the future of your applications? Users of Axapta's CRM application might already be asking this question, after Microsoft in January launched its own CRM product. As the years go by, which CRM will Microsoft invest in: Microsoft CRM or Axapta CRM? To ask the question is to answer it.
So, why did Microsoft even bother to buy Great Plains and Navision if it was planning to write new applications from scratch? The answer, in my opinion, is that Microsoft was buying not the technology of these vendors but their customers. In this regard, Microsoft's approach is similar to that of SSA Global's: it is cheaper today to buy an existing customer base than it is create one through new sales. (See my post yesterday.)
InternetWeek has more analysis of Project Green