Microsoft's acquisition of Great Plains changes at a stroke its relationships with software vendors the world over. Although none of them have ever trusted Microsoft as a partner, they could always take some comfort from its traditional stance of only directly competing in the desktop productivity market. Now it has thrown down the gauntlet; it no longer stops at the desktop. Now it is prepared to offer any application at all.
Why should any software vendor or developer work with Microsoft if it might at any moment buy up a rival and become a competitor itself?
Well, one answer might be, because the alternative is to work with Oracle, a vendor that always has competed openly and vigorously in the enterprise applications space. It has never been much of a handicap for Oracle. Microsoft has evidently decided the costs of not owning and operating its own applications in this space — and the expertise and knowledge it acquires thereby — outweigh any disadvantages.
Of course other vendors are less directly competitive than Oracle and Microsoft. IBM, for instance, has a credible platform. It doesn't compete with software vendors. But its Global Services arm does compete with their hosting providers and systems integrator partners.
Sun with its iPlanet division perhaps offers a less conflict-ridden choice. But then iPlanet is half owned by AOL, which must surely harbour aspirations of its own to one day enter the online business applications market in direct competition with Microsoft's bCentral services.
It's only when you come down to the size of niche platform providers such as Progress Software that you find a company that doesn't compete with its customers. Though even that may change. Progress recently snapped up the remains of ASP startup X-Collaboration, for purposes as yet undisclosed.
Microsoft's purchase is certainly a departure from tradition. But at a time when computing is moving onto the Internet, nothing stays the same. There are several factors in this emerging new landscape that make sense of Microsoft's move on Great Plains, and which also give some pointers as to who might be next on its shopping list:
Application platforms are becoming part of the infrastructure.
Many of the basic components of common business processes — such as finance, customer account management, sales and purchasing, and information exchange — are standard across all companies. They effectively become a new layer of the computing infrastructure, on which developers and integrators can layer the specific functionality that relates to individual industries and companies. Several vendors that are already working closely with ASP and online partners are transforming their application suites into platforms or engines, which partners can tune and adapt to their specific needs. The most successful examples include Lawson Software, Onyx Software, Clarus and Documentum.
Resellers want integrated packages
When computing is delivered as a service, customers become much more demanding. They expect it to arrive fully functioning and ready to fulfil their business needs. That puts the onus on resellers and integrators to meld together all the building blocks of business process and content into pre-integrated offerings, tailored to specific industry needs and then further customised to each individual business (for more on the implications of this trend, see my previous column). There's plenty enough work to do without having to delve into low-level systems integration between multiple application stacks. Resellers are looking to platform vendors and aggregators to offer them pre-integrated service platforms that leave them free to concentrate on business-specific functionality.
Someone has to define standards
Gradually, Internet computing is going to evolve standards to simplify integration between multiple online applications and services — an evolution I've described in much more detail in the latest ASPnews premium content report, Internet Application Engines. While Microsoft has spent the past year refining its .Net vision of how this will pan out, companies as diverse as Jamcracker, NetLedger, Bowstreet and Nortel Networks — as well as several of its traditional rivals mentioned above — have been testing potential standards and mechanisms in real-life implementations. By bringing Great Plains into its bCentral melting-pot, Microsoft is sharpening its ability to take a lead in the race to establish — and perhaps control — the standards at the heart of Internet computing.
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