Wednesday, December 03, 2003

Could FRx become a back door for Microsoft?

The trade press has written much regarding Microsoft's entre into the enterprise applications space with its acquisition of Great Plains and Navision, along with its development of its own applications such as Microsoft CRM. Such developments are perceived as a competitive threat to application software vendors that partner with Microsoft. But what is not often discussed is Microsoft's presence already as an application provider to over 100,000 companies due to its ownership of a widely used financial report writer called FRx.

FRx Software, which was acquired by Great Plains prior to Microsoft's acquisition of Great Plains, is probably the most widely implemented financial report writer among small and mid-sized businesses. It's a good product. So good, in fact, that a number of mid-tier ERP vendors include FRx as a complementary product or in some cases as their only option for financial reporting. Some of these vendors, such as Epicor, Ross Systems, Best Software, Expandable, Made2Manage, and MAPICS, are constantly going head-to-head with Microsoft Business Solutions (MBS) for ERP sales. Yet they turn around and offer a Microsoft application as part of their own offerings.

Once MBS has sold FRx into an account, it could use the FRx relationship as a back door into the account to sell its enterprise applications, such as Great Plains, Navision, Axapta, and Solomon. Or, they could simply mine the huge installed base of FRx users that already exist. I've not yet heard of MBS resellers attempting to exploit the FRx installed base to sell other Microsoft applications. But, if readers have any stories to share on this subject, please let me know.

Update, Dec. 4: A Microsoft reseller and a Microsoft competitor that resells FRx have both given me some feedback, and maybe my idea is just ahead of its time. The Microsoft reseller writes:
People here seem to agree that this would be a tough back door. One of FRx's selling points is that it doesn't really care what ERP system you're running, it can provide you with good financial reporting. So our going into an FRx account to talk about ERP is sort of contrary to that. As you note, FRx probably got into the account via the company that sold them their ERP system, so there wouldn't be any real MS relationship because of FRx.
My source at a Microsoft competitor has this to say:
We are also a reseller of FRx. I see no attempt on the part of Microsoft to leverage the FRx installed base. In fact I see nothing from Microsoft that would suggest using this as a tool to gain access. I dont think they have a clue on how to do this. The Microsoft application software groups are so removed from each other it is a wonder they even know each other exist. At all the Microsoft shows that I have been to, FRx was never mentioned. I know people at Great Plains and they never bring up FRx either.
Update, Dec. 9: A Great Plains reseller has confirmed what others are saying: "As a VAR we have no visibility into the FRx installed base. Also, I am not aware of any campaign for MBS to go after the FRx installs with an alternate ERP offering."

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