Probably the best current vantage point can be had from the standpoint of MBS' growing partner base. While there's a lot stirring inside MBS, particularly with respect to Project Green -- the new technology platform for MBS that has recently been pushed back to 2006 -- much of the recent action has taken place in the wings. That's because the prospects for success turn out to be as much in the hands of partners as with Microsoft itself.
The recent deal with Autodesk to link its product life cycle management software to the MBS product line is just one of the many ways in which MBS is seeking to expand the functionality of its products into key verticals, like manufacturing. The Autodesk deal will add a key piece of functionality to the MBS line that will help it land deals among larger companies that see the need for linking design and engineering data directly to their ERP systems.
Other plans to compete with the big boys are coming. Demand planning functionality was announced last month, courtesy of Italy's TXT Software. Lean manufacturing now is being provided by eBecs in the UK. Etc. Etc.
MBS has been alternatively pushing and applauding its channel partners, trying to get them to consolidate and acquire the skills to move upscale at the same time that MBS is increasingly counting on top integrator partners, like Aston and Tectura to do the heavy lifting at the customer site. Aston, last summer, landed a key role in MBS' biggest deal to date, a massive 20 ERP system consolidation for global office products provider Esselte. Tectura was honored by MBS with a partnership award for its reseller efforts, and the company recently completed a $12 million round of funding to finance the acquisitions MBS is pushing.
This high degree of dependency on partnerships for sales, implementation, and functional enhancements makes MBS unique in the market, particularly as its competition is increasingly made up of companies like SAP, Oracle, and PeopleSoft, among others, that rely more on core functionality and direct sales. The strategy lets MBS move more quickly than it would otherwise. It's much easier to build interfaces to products like Autodesk's Inventor and Vault than it would be to recreate the code internally. And it's also a lot easier to place the burden of sales and support growth on companies like Tectura and Aston than retain that responsibility inside MBS.
The near-term future of MBS is intimately tied up in how far it can go with its integration and product partners. The strategy is hitting some important limitations. Right now, big integrators still have to bring other partners and even Microsoft on board in order to handle global accounts. And, while larger software partners, like Autodesk, are not likely to have problems serving the anticipated numbers of very large customers, there's a limit to how well smaller software partners can quickly scale up to handle more than a few customers the size of Esselte.
The long-term relationship of Microsoft and its partners won't necessarily get any simpler.
Looming on the horizon is Green, a massive code re-write that many fear will disrupt the technology strategies of customers, implementers, and developers alike. The fact that Microsoft would be better off if Axapta, Great Plains and Navision were all based on a single is indisputable. Whether this is better for the partners who have to relearn a new code base, recode their software and upgrade their customers is still an open question.
Customers are wary too.
Microsoft bought Great Plains and Navision for their channel, and have made the channel the cornerstone of the MBS strategy. So keep an eye on Redmond, but don't take your eye off the channel partners.
There's only so much Microsoft can do on its own.