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Thursday, November 17, 2005

Burgum pushed aside as head of Microsoft Business Solutions

The other shoe has fallen at Microsoft. Doug Burgum--former CEO of Great Plains, who remained in the top spot when the Microsoft Business Solutions group was formed from Microsoft's acquisition of Great Plains--is being replaced.

Microsoft is dressing up the change as a promotion of Burgum to a newly created "Chairman" position. But make no mistake: the new position is a figurehead. Burgum will continue to report to Jeff Raikes, head of the new Microsoft Business Division. But they will now be recruiting or identifying a new head of MBS who will be responsible for the performance of the unit going forward.
Doug Burgum
Microsoft reorganized itself last month into four divisions, and Burgum moved to report to Raikes. He had been reporting directly to Microsoft's CEO Steve Ballmer. At the time I said that there was no way to interpret the move except as a demotion for Burgum. Today's move reinforces that interpretation.

In an interview on Microsoft's website, Burgum was asked whether he was satisfied with the performance of MBS over the past five years. He replied,
From a current year standpoint, we are absolutely pleased. From an overall growth perspective, at US$181 million this quarter, Microsoft Business Solutions is up 16 percent compared to where we were last year. In terms of software revenue during the quarter, we are up 18 percent thanks to our solid, dynamic line of enterprise resource planning (ERP) and CRM solutions and services. License growth is up 21 percent and enhancement revenue has jumped by 16 percent compared to last year.
Note that Burgum talks revenue, not profit. In a market where Oracle and SAP--even smaller players like Lawson, SSA, and QAD--are profitable, MBS has never shown a profit in the five years since its inception.

Here's some free advice for Raikes. Don't consider anyone you know from your past life selling shrink-wrapped Microsoft products. And don't stop with replacing Burgum. Go outside to recruit some of the best talent that has been displaced by Oracle's acquisitions. Look at some of the former PeopleSoft and J.D. Edwards executives. Sure, the best of them already have new jobs, but they'll still be open to your offer. Don't forget the Siebel guys. Find some that know how to develop and sell enterprise business software. Find some that know how to build a VAR channel for enterprise systems that have long sales cycles and complex implementation requirements.

CNet has more on the story.

Related posts
Reorg highlights troubles at Microsoft Business Solutions
Microsoft: selling enterprise software is a "humbling experience"

by Frank Scavo, 11/17/2005 02:14:00 PM | permalink | e-mail this!

 Reader Comments:

From one hand: A somewhat naive and wordy chap, who just happened to become an ERP entrepreneur by chance in the early (and near-bankrupcy) days of Great Plains got honoured with a couple of years in Vice Presidency and is now retired as appropriate.

And the other: The packaged software developer in its search of new revenue streams has stumbled upon a supposedly (?) profitable line of activity, trying to apply its obsolete development, deployment and marketing models to a business that is in re-making under our own eyes.

Bringing in ex-JDE-QAD-Oraclee-s does not solve the problem, because it does not change Microsoft and it does not change the old buddies in business. Besides, who can boldly predict the ERP business model say, in year 2015? The buddies may be as much a reason as the mergers are a consequence.
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