Microsoft’s move into small business segment a worry for competitors

Microsoft’s move into small business segment a worry for competitors

World’s largest software company Microsoft recently announced plans to enter into the small business segment with discounted offerings for small and medium sized business people. They call this initiative Windows Server System promotion and it is a software-based solution for small IT staffs that require a self-contained software system. The package includes Windows Server 2003 operating system, Microsoft Exchange Server 2003 application server, and Microsoft Operations Manager (MOM) 2005 Workgroup Edition to manage the system.

This initiative is worrying news for the businesses already involved in providing solutions to such customer base. Entry of the software giant itself would result in declining business and profits. However, Microsoft boss Steve Ballmer believes that it will not matter in the long run. He spoke to the media about their entry into the small business segment: “We do believe that the business application market will continue to get consolidated.”

Many of these companies include Microsoft partners who would soon probably be competing against the company itself to provide software solutions to small businesses. These companies develop customized software solutions using Microsoft applications to suit individual businesses and Microsoft itself is eyeing the same market. They have already hired more than 200 professionals including doctors, bankers, and plant managers to help it write software for specific industries.

They plan to launch these applications as part of a program called Small Business Accounting this fall that will compete with accounting programs such as Intuit’s QuickBooks. Representative of one such company, which expects to face Microsoft as a challenger said in a statement to a media group: “It will definitely take business away. We used Microsoft as a platform until now, but with the launch of this small business accounting program, we will become competitors.”