If computers and other information technology drive growth, why don't more companies ramp up their IT investments?
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That question may be critical to young and established companies; but it isn't always top-of-mind for their executives. So Microsoft commissioned its own study, in which it found IT capability to have a large impact on profitable business growth in midsize businesses. The company also followed around thousands of business people to see how they worked with IT.
Microsoft CEO Steve Ballmer said a key lesson was, "Today's business software doesn't look enough like today's businesses."
Armed with the insights of their studies, Microsoft announced Wednesday it will change the way it relates to midsize firms, defined by the company as businesses with 50 to 1,000 employees or 25 to 500 PCs.
Microsoft recently had reorganized its sales force, yielding more focused efforts on the midmarket and enterprise markets; and Wednesday's announcements seem to accentuate the way that Microsoft focuses on the midsize companies. It has reconfigured its portfolio of products, rebranded several of them and has organized them around how people work.
The challenge for midsize companies is that they have to compete in the same world as the larger enterprise companies; but in the words of Orlando Ayala, vice president of Microsoft's Small and Midmarket Solutions & Partner group, "They are very cash constrained, and constrained on resources -- especially people."
Therefore, most business-to-business marketers go after the larger corporations first -- because they have deeper pockets, leaving midsize customers to get solutions from resellers, many of whom they don't know. Often it also means the products are priced for larger customers who can afford to pay top dollar. Plus, since you often have to buy installation and configuration expertise, you have an additional cost to bear.
Microsoft's Ballmer conceded, "The midmarket customer is the least well-served customer."
If you run a business in this segment, you're probably nodding in agreement. You have only a couple of IT people -- if any -- who have to be well-rounded in their computer knowledge and ready to work 24 hours a day. They have to be firefighters because when they arrive in the morning, people will be lined up at their office doors in need of personal support.
Whether you've been dealing with Microsoft or other IT vendors, you never seem to receive enough attention; you pay more than you want to pay; and you probably receive solutions that aren't always perfect out of the box.
That's changing in many places.
The Microsoft announcement includes a new financial product aimed at midsize companies that undoubtedly is meant to compete against QuickBooks. It also includes a rebranding of several business products under the common umbrella, "Microsoft Dynamics."
More importantly, Microsoft plans to re-engineer its products to more precisely fit 50 business roles common to midsize companies. So a salesperson can see his software as being sales software, while the accountant thinks of it as being accounting software. Using Microsoft Office as a "common client," users will have different views of the company data based on what they do.
There are 1.4 million companies that fit the midmarket category that Microsoft defines. They're all different, so moving to a role-based strategy makes sense. Even though the software box says the same thing, software that works like the user wants it to work could extend the benefit far beyond what we've seen so far on our PCs.
Now we have to keep Ballmer to the promise he made Wednesday, when he said, "We will make our products work out of the box."