Microsoft has announced that it"s targeting smaller businesses (fewer than 1,000 employees). Though Microsoft is no stranger when it comes to making deals with bigger businesses it is with smaller businesses. Here Microsoft is hoping to bring in another cash cow. In other markets Microsoft"s products have dominated, but not in this smaller market. Microsoft is hoping to change this, but in the past they haven"t had much luck.
News that Microsoft Corp. discussed a merger with business software giant SAP AG has focused new attention on Microsoft"s limited success in a market it would love to conquer.
Microsoft is rejiggering plans to cater to the more specialized needs of small businesses, part of a wider effort to find new revenue streams to augment its traditional cash cows. The hope is to score with accounting and other software that Microsoft is not traditionally known for. The target customer: companies with fewer than 1,000 employees.
The most recent changes -- including putting the Microsoft Business Solutions unit under the direct control of chief executive Steve Ballmer -- come as the company concedes it has not been able to beat the competition as it hoped. Microsoft made its first big push in the market several years ago, with the $1.1 billion acquisition of Great Plains Software Inc., a longtime player in a fragmented sector lacking a dominant leader. Microsoft believes the market includes as many as 40 million companies worldwide.