Tuesday, June 29, 2004

Microsoft: selling enterprise software is a "humbling experience"

PeopleSoft's antitrust lawyer Dan Reback summarizes the videotaped testimony of Microsoft senior VP Orlando Ayala, regarding Microsoft's experience in selling enterprise applications, such as Great Plains and Axapta.
Orlando's testimony hammered home the points the Government has made about Microsoft's effect on the high-function software market for HR and financial services. The witness testified:
  1. Non-established vendors have no sales opportunities with the largest customers, as it takes many years and substantial investment to enter the up-market, even if the vendor has a technically capable product;

  2. On the other hand, Oracle, SAP, and PeopleSoft, which are established in the up-market, have substantial opportunities;

  3. Microsoft's Axapta product is not capable of meeting the needs of multinational customers;

  4. Microsoft has scaled back its marketing messages in order to avoid overselling its product and producing failed implementations;

  5. While Microsoft may occasionally get a large customer, Microsoft's offerings are not suitable for all such customers;

  6. Microsoft has over-emphasized its business software, and its real-life experience in trying to break into even the mid-market as an application vendor has been "a humbling experience."
Over two years ago, I first begain writing about the difficulty Microsoft would face in selling major enterprise applications (see related posts below). It's interesting to see this now confirmed directly by Microsoft.

The DoJ lawsuit to block Oracle's takeover of PeopleSoft is bringing out all sorts of interesting information about the dynamics of the enterprise systems marketplace--stuff that you won't read in vendor press releases. I'll write more shortly, if I can find time to dig through all the documents.

Related posts
Microsoft Business Solutions is setting the stage for big-time channel conflict among resellers
Microsoft’s move into enterprise applications may have unintended consequences
First look at Microsoft's Axapta ERP system

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