SAP AG 2003

Microsoft Business Solutions

Sage Worldwide

Contents:

SAP and the Competition

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Characterize the competitor products of Microsoft Business Solutions and Sage and describe their advantages and disadvantages

At the conclusion of this unit, you will be able to:

SAP and the Competition: Unit Objectives

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Describe Microsoft's strategy for the SMB market

List Microsoft's products for the SMB market

Point out weaknesses in the strategy and product lines of Microsoft Business Solutions

At the conclusion of this topic, you will be able to:

Microsoft Business Solutions (MBS): Topic Objectives

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Microsoft Strategy Messaging

Become Market Leader in the area of standard business software targeted to small and medium sized companies in 2004

Achieve $10 Billion Revenue in 2007

Get the best in class regarding Return on Investment (ROI) and Total Cost of Ownership (TCO)

Add value to the existing solutions

Lower the Cost of Application Integration .NET reduces the need for custom integration, minimizing complexity,

speeding deployment, and delivering a low TCO .NET as a standard platform makes investments in Software safe.

Pay what you use and best value for money

Threefold investment strategy Expand and enhance today’s Solution Surround solutions with new product offerings (PSA, Retail etc.) Deliver a single global solution built on the Microsoft Business Framework

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Partner Concept with MBS (1)

The Navision Solution Center (NSC) is responsible for thefollowing tasks:

Sale of MBS solutions to end customers

Development of industry-specific functions

Adjustment of its industry standard to the individual needs of the customer

Implementation and support

Maintenance of tailored customer solutions

Project management and outsourcing

100% indirect marketing

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Partner Concept with MBS (2)

According to Navision, only partners that have at leastfive employees with the status "Navision certifiedprofessional" (NCP) are permitted.

Industry business solutions are developed by the partners themselves (in some cases with financial backing from Navision) and certified by Navision.

Sales are effected completely independently of that of thebasic packet.

All sales revenues go to the Navision Solution Center.

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Microsoft Business Solutions Product Overview

Main Solutions MBS Navision MBS Great Plains MBS Axapta MBS CRM

Smaller Solutions MBS Small Business Manager Microsoft bCentral MBS XAL MBS Solomon Apertum MBS Enterprise Reporting MBS Professional Services Automation MBS Retail Management

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MBS Strategy

All products will be developed further (statement after Navision transfer) Example MBS Great Plains: Will no longer be marketed in Germany. Support

for existing customers is provided by two partners. Version 7 is the last German version!

Example Siebel: Great Plains Siebel Front Office (GPSFO) will be withdrawn from the worldwide market. Collaboration to be cancelled!

New functions are planned for all products. These functions include customer relationship management, business intelligence, Web services, mobile solutions, and reporting.

Statement that “all products are to be replaced by a common .Net product" is not clear!

The .Net product won’t be available until 2005!!! The first version will not contain all functions yet. Existing products will be continued in parallel. Solomen, eEnterprise, Small Business Manager, Attain, Axapta, XAL, MSCRM

are all to be placed on the .Net??? For Germany, Microsoft has announced its intention to invest in the training of

Microsoft partners so they can also sell ERP + CRM. Will they do that in all countries? Conclusion: Competition among partners will increase.

Microsoft sells financial services via Microsoft Capital, thus binding customers.

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MBS

MBS Partner Customer

Sold to customer

Margin goes to partner

0 % financing 1st installment after 3 months Period: 1 – 3 years (flexible)

Customer pays

3. 3.

2. 2.

1. 1.

MBS Financing Model

Also available for partner industry solutions.

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How to Beat Microsoft Business Solutions: Weaknesses

The trust placed by partners in the sales strategy is in jeopardy. For example, Microsoft has hired 500 sales employees for direct sales in the USA. Is MBS to be sold there directly to commercial customers?

Every industry solution is changed in the source code.(update problems!!).

MBS Navision has changed the database structure.All partners now need to adjust their industry solutions(high costs, increased likelihood of errors occurring and so on).

MBS Navision is not easily upgradeable (no tool available). (extra costs)

MBS offers only low-performing search functions(context-sensitive).

MBS Navision and MBS Great Plains are not as user-friendly as SAP Business One (usability study).

Customers have expressed doubts about their ability to cope with the new portal.

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Microsoft – How to Compete Weaknesses

Navision Weaknesses

No multi-currency management in the Accounting module (limited to third party accounting9

Limited integration of numerous „add-ons“ developed by Navision distributors in the standard software package

Addition of fields and screen customization more complex than in SAP Business One

Weak support by the software editor to the distributors in some countries (including France)

Lack of information about Microsoft strategy (future positioning of Attain vs. Axapta)

Additional costs in case of upgrade to „Microsoft standards“

More complex set up methodology and heavier implementation costs

Less usable solution

Business One Strengths

Approval workflow

Potential developments with SDK tool

SAP support to Distributors

SAP brand image

Recent technology solution, large investments from SAP

Synergy with subsidiaries of Groups running SAP

Simple set-up methodology, limited set up costs

Ergonomics, usability for a key-user, ans end-user, a system administrator

The products currently have an architecture with limited deployment (thick client)Lack of functional depth in B2B ProcurementMicrosoft CRM integration into MBS

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How to beat Microsoft Business Solutions: Threats

In spite of all the statements made, the product strategy for integrating MBS products in a .Net product is unclear. Investments do not appear to be secure!! Uncertainty, dissatisfaction

The schedule for developing the .NET infrastructure and the products which are based on it is constantly being postponed!! Uncertainty, doubt

When the .Net arrives, migration will require a lot of time and effort. Even if the new software is free of charge (maintenance contract), high costs will be incurred on implementation. Uncertainty about amount of effort and costs

When will partner modules and industry solutions be available on the .Net? Uncertainty about time and costs

Microsoft has a poor image as a monopolist and poor press coverage (court appearance in the USA). Uncertainty, doubt

The partners will be consolidated; it is known that the remaining NSCs will not beabove 200 in the medium term. Uncertainty, doubt

MBS passes on the pressures of the market immediately to the partners.Prices will be forced down because the partners have to make a sale. Dissatisfaction, uncertainty

Can a decision for MBS at the moment be a secure decision?

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How to beat Microsoft Business Solutions: Arguments

MBS plays down software costs.

MBS plays down hardware costs.

MBS promises software technology, which is still virtually unknown.

Strategy: Point out that additional features could have a high impact on the

total costs. Point out that security of investment is an important factor in

decision-making today and a new, previously unknown technology with all its possible teething problems is currently not able to offer this.

Point out that software that is not easily upgradeable (or only at extra expense) is not in keeping with the times and is an insecure investment.

Microsoft's financing scheme could be only a decoy in view of the uncertainty in the product environment.

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Prices for Service and Support

16% of the license costs

18% for the basic service program (with a guaranteed response time of three hours)

28% for unlimited support with a guaranteed response time of one hour

Quantity discount: 2% with a license priceof $100,000 – $199,000

Quantity discount: 4% with a license price of over $200,000

Premier Services: Additional $35,000 – includes 100 hours technical support, 100 support cases, on-site training, including travel

expenses

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User License Fees for MBS Navision

Session/each

Session/10 users

Session/25 users

Session/50 users

Web user/each

Web user/25 users

Web user/100 users

€ 1,559.75

€ 14,817.59

€ 36,069.13

€ 70,188.77

€ 620.35

€ 9,925.66

€ 35,448.77

(5% discount)

(7.5% discount)

(10% discount)

(from Navision presentation dated December 4, 2002)

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Navision: Composition

A Navision solution comprises the following:

Licenses for the application: (depending on scope of functions)

User/session (€ 1237.35)

Services (depending on scope of functions)

Training (depending on customer requirement)

Cost of license to cost of service (1:1 to 1:1.5)

Currently this calls for an overall budget of € 25,000 and higher.

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Describe the product lines of Sage worldwide

At the conclusion of this topic, you will be able to:

Sage: Topic Objectives

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Sage – Worldwide

Sage Australia

Sage New Zealand

Best Software

Sage France

Sage KHK

Sage Spain

Sage UK

Sage Middle East

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Sage – Company key findings

Founded in 1981 in Newcastle upon Tyne, England Floated on the London Stock Exchange in 1989 Over 900,000 customers with an annual support contract Over 5,500 employees Annual revenues of £551.7 million (Financial Year 2002) Profit before tax of £135.2 million (Financial Year 2002)

More than 3 million customers worldwide, thereof more than 40,000 outside Europe, mainly throughout Africa and Asia excl. Best

SageKHK: over 250,000 small to medium sized companies

throughout Germany Sage US/Peachtree: 1.2 million small to mid-sized businesses

in North America ACT!: more than 4 million professionals and 13,000

corporations world-wide SalesLogix: Over 4,000 companies worldwide

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Sage – Worldwide Acquisitions

The company‘s growth strategy is through aquisition

1991 DacEasy (US)

1994 TimeSlips (US)

1999 Peachtree (US)

1999 Best (US)

2001 Interact Commerce and Platinum (US)

2001 Coala SA

2001 Connectsuite SAS

2002 Gandke & Schubert

2002 Dynalog SA

2002 JSI FundRaising Systems, Inc.

2002 CPA Software, Inc.

2003 Concept Group

2003 Aquisition not yet finalized. Timberline Software Corporation

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Sage Worldwide – Best Software Enterprise Strategy

In April 2003 Best Software reorganized it‘s six divisions into two

Mid-market Division: MAS 90, MAS 200, MAS 500, Business Works, Platinum for Windows

Small Business Division: Peachtree, Timeslips, DacEasy

Specialty Products Division: Abra, FAS, Carpe Diem and TimeSheet Professional

Nonprofit and Government Division: MIP, Paradigm, Millennium

CRM Division: ACT!, SalesLogix

Accountants Division: CPASoftware, Best Software Accountants Network

The Small Business Division

The Mid-Market Division

CRM Division: ACT!, SalesLogix

ACT!

CRM Division

SalesLogix

Best Software‘s strategy is to provide one face to customers and partners.

The company is independent in his decisions from Sage Group plc.

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Sage – Partners

Customization and local support is provided by partners who provide a pre-sales and an after-sales consultancy service.

Network of over 400 distributors in more than 60 countries and more than 20.000 active resellers worldwide

more than 30 local distributors in Europe more than 75 local distributors in Africa more than 6,600 VARs in America

Best Software: Products are sold by a network of Value Added Resellers (VAR‘s). The Small Business Division is primarily sold through retail. ACT! has a network of certified consultants in 19 countries and a

network of partners. The Mid-Market Division is sold through Best‘s partner channel. SalesLogix is sold through a reseller channel (that includes more

than 500 business partners).

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Sage – How to compete – Strengths

Strengths Large Customer Base

Strong product brands

Extensive partner network

Strong financial position

Core competency in Sales Force Automation

Strong CRM division with ACT! and SalesLogix

Has the resources to be a major force in the SMB market

Offers well targeted applications to meet the needs of small and mid-sized businesses

Fast Implementation

Implementation with other third party application is possible.

Applications offer good up sell and cross sell opportunities.

Subsidiaries are independent in their sales strategy, because they have better insights on the markets in their areas.

IBM Alliance to deliver leads

Key Influencer and consultant program

Channel Improvement Program

IBM/Indirect model

Development of vertical solutions makes the integration between front and back office application a key priority.

Good Mobile Support

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Sage – How to compete – Weaknesses

Research and Development (R&D) is under invested. Line 50 program is 20+ years old. Lowest investment in industry.

Line 100 product is migrated to SQL.

Integration of CRM business (Interact) is poor. Lack of integration

Lack of or no inter-country strategy KHK, Sage UK, Ciel and Best Software all act independently. No global strategy

Vertical solutions are mainly targeted for accounting applications.

Not ready for .NET

Limitations in functionality (Sales Force Automation capabilities are more evolved than marketing and customer service)

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Sage – How to compete – Opportunities

Acquisition of Timberline (business management software vendor) to expand products and services for verticals

Timberline will become part of US business and will expand Best‘s product range in construction and real estate industries

Independency of Sage subsidiaries Subsidiaries know their market best and are able to recognize

further growth potential for the company

Large customer base to cross sell products

Partnerships Microsoft:

Adopt Microsoft‘s technology, because own products are not ready for.NET. Take over Great Plains/Navision customer and reseller base to help Microsoft manage the transition

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Sage – How to compete – Threats

Sage wants to rationalize channel – Potential for new SBO partners?

Unclear contract status with partners

Sage sell their products partly direct to corporate and strategic customers (channel conflict)

If SAP goes after Sage business partner in each region this could have an impact on Sage business (SAP already has the business partner for Sage Line 500 in the UK)

Microsoft as a competitor in the SMB market Microsoft has a hughes install base to cross sell products

No Inter-Country product strategy Sage subsidiaries act independently and so are the products.

SAP‘s Business One, for example, is a worldwide solution and can be implemented in any subsidiary of a corporate company

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Sage - Product Overview I

Country Product Name Product Description

Australia/New Zealand Sage Instant Accounting (A) single-user bookkeeping solution for small businesses. Ideal for sole traders or start-ups

Sage Line 50 (A, NZ) core accounting functions

for a more established business that is still experiencing growth

Sage Line 100 (A) fully customisable business suite

suitable for a wide range of businesses in terms of turnover and number of employees

Sage Line 200 (NZ) Advanced business suite

Sage Line 500 (A, NZ)

(formerly known as Sage Enterprise and CS/3)

web- enabled, financial, distribution, services and manufacturing software designed for mid- range and larger organisations

Sagepay (A) payroll solution

available with the option of a multi user module

Sagepos (A) point of sale system designed to suit small to mid-sized retailers

Sage Job Costing (A) companies of all sizes and in all industries

able to track and evaluate all the costs of a job or project

Canada: Best Software Canada Ltd.

Fixed Asset Accounting Automating fixed asset management

Abra Suite human resources and payroll management

For companies of all sizes

no pricing information available

Best! Imperativ Analytics budgeting and planning tool

For companies of any size

ProvideX business application development environment

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Sage - Product Overview II

France Ciel Ciel Comptabilité accounting solution

CielGestion Commerciale management solution

Ciel Paye payment solution

Sage Coala Ligne Production (par Coala) applications de production, gestion interne, et pilotage administratif, commercial et marketing

Ligne Conseil (par Gescap) couvre les différents domaines de conseil aux entreprises

Ligne Relation Clients (par Sage)

CRM solution

Sage France Sage Ligne 30 business management solution for small businesses

Sage Ligne 100 business management solution for small and medium sized businesses

Sage Ligne 500 business management solution for medium sized and larger companies

Sage Ligne 1000 business management solution for large companies

Sage CS/3 ERP solution

Middle East Sage Line 500 financial, distribution, manufacturing and services solution designed for mid-range and larger organisations

Sage Line 200 financial and distribution solutions for medium sized organisations

SalesLogix mid-market customer relationship management software offering sales, marketing, support and e-commerce functionality

ACT! contact management software

Sage Line 100 fully customisable business suite

suitable for a wide range of businesses in terms of turnover and number of employees

Sage Line 50 accounting solution for small and medium-sized businesses

Sage Line Instant Simple single-user bookkeeping solution for small businesses. Ideal for sole traders or start-ups

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Sage - Product Overview III

Germany Gandke&Schubert GS - AUFTRAG, GS-AUFTRAG Professional SQL, GS – KFZ

logistics/Billing

GS-Shop Online-Shopping

GS-Fibu, GS-EAR Accounting

GS-Lohn, GS-Reisekosten, GS-Brutto/Netto

Human Resources

GS-Adressen Office Organization

GS-Verein Club management

GS-Termin Contact management

HR Software HR Personal Manager: Personal HR management solution

HR Personal Manager: Payroll Payroll solution

HR Personal Manager: Reisekosten Travel management solution

Best! Info Plan HR management solution for the Public Sector

HR Zeit Time management solution

Sage KHK PC Kaufmann commercial software

Office Line business administration software for medium-sized businesses

Classic Line modular business administration software for smb

HWP-WIN business administration for manufacturing and service industry

Sage Personalwirtschaft HR Management for all industries, public sector and health

Sage Kundenmanager CRM tool

Sage WebTrader Homepage, Shop, Content-Management-System and communication platform

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Sage - Product Overview IV

Spain Sage Contabilitad 100 accounting solution

Sage Gestión comercial 100 management solution

Sage Caja descentralizada 100 payment solution

Sage E-commerce tool for creation and administration of online shops

Sage Informes 100 tool for creation of analytical statistics

United Kingdom/ Ireland

Sage CRMsolutions

ACT! small office/home office (SOHO) as well as small and medium businesses

SalesLogix Mid Market CRM solution

Sage UK Sage Accounting&Finance Line (Sage Instant, Sage Line 50/´100/200/500)

range of Accounting Suites for different sizes of businesses

eBusiness solutions range of e-business products for e-commerce strategy

Sage Personnel(Instant Payroll/Payroll/Payroll Professional/Payroll Bureau/P11D/P11DPro)

range of Payroll and HR Suites for different sizes of businesses

Sage Forecasting/Costing (Job Costing, Job costing Pro, Forecasting, Winforecast Pro)

Forecasting and Costing Suites for different sizes of businesses.

TAS Software TAS Books 1 Accounts, Invoicing and flexible Reporting; for start-up businesses

TAS Books 2 Accounts, Invoicing, Job Analysis, Project Costing and Flexible Reporting

TAS Books 3 Accounts, Invoicing, Job Analysis, Project Costing & Flexible Reporting with Full Stock Control

businesses where buying and selling physical products is the main focus. This includes wholesalers, distributors and manufacturers.

TAS Payroll suitable for companies with 1 to 1000 or more employees ,

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Sage - Product Overview V

United States Best Software Inc.

Abra Enterprise human resource and payroll solution for mid-sized to large middle market companies

Abra Learning Action eLearning solution for small and mid-sized businesses

Abra Online Internet-based HR and payroll service for companies with 50 to 1,000 employees

Abra Suite HRIS solution offers comprehensive payroll processing; recruiting; training and benefits administration for small and mid-sized businesses

ACT! CRM solution for small and mid-sized businesses

Advantage NonProfit Series fund accounting to mid- to large-sized client environments. The system is designed for nonprofit organizations with 10 or more concurrent users, $10M or more in annual budget

BatchMasterPFW and Platinum for Windows by Best

process manufacturing software for companies with 10-500 employees

Business Works business management solution suited for growing small and medium-sized businesses

Carpe Diem time and expense tracking system for corporate enterprises like law firms and finance companies

FAS Gov Solutions fixed asset inventory, asset accounting and depreciation, and custom reporting challenges for organizations managing 50 to 100,000 assets (government, schools, and non-profit organizations)

FAS Solutions fixed asset management tools to businesses of all sizes, managing 50 to 100,000 + assets

Government Series (Advantage/Pro)

fund accounting for mid-sized/growing/larger government agencies

MAS 90/200/500 (formerly Best Enterprise Suite)

accounting, distribution, manufacturing and e-business management software solution for small to medium-sized companies with 10 to 500 employees/enterprises with 20-1,000 employees

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Sage - Product Overview VI

United States Best Software Millenium enables organizations to manage campaigns and events, track donors and create reports quickly and easily; larger nonprofits with 25-100 employees

NPS Intro fund accounting solution for smaller nonprofits (less than $1M in annual budget, 3 or fewer users)

One-Write Plus accounting software for small businesses with 1-3 employees

Paradigm manage the entire fundraising process for smaller nonprofits with up to 25 staff members

Peachtree Accounting line of Products

(Peachtree 2003, Peachtree Accounting 2003, Peachtree Complete Accounting 2003, Peachtree Fist Accounting)

accounting, business administration and Internet presence software for small businesses from 1-50employees

ePeachtree hosted online accounting solution for small businesses

Platinum for Windows by Best financial software solution for small to medium-sized enterprises of 20 to 500 employees

SalesLogix CRM solution for smb

TimeSheet Professional accounting for time and expenses related to projects

Timeslips time & billing solution for service professionals, companies with 1 to 50employees

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Sage - Product Overview VII

United States Best Software ACT! 6.0 Accounting solution

SalesLogix sales-driven customer relationship management (CRM) solution

DacEasy this product line includes Accounting, Payroll, Order Entry, Point of Sale and Job Costing

TeleMagic TeleMagic Enterprise build a database to fit any business needs

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Sage - Product Positioning

Sage Accounting&Finance

Sage HR&Payroll

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Sage Line - Pricing

Sage Instant Line Sage Instant Accounts £109.79 (Excl. VAT)

Sage Instant Business Suite £203.40 (Excl. VAT)

Sage Line 50 Sage Accountant £395.00

Sage Financial Controller £925.00 (Excl. VAT)

Sage Line 100 available via an approved reseller only

Sage Line 200/500 dependant on functionality and the number of users requiring

access to the software

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You are now able to:

SAP and the Competition: Summary

Characterize the competitor products of Microsoft Business Solutions and Sage KHK and describe their advantages and disadvantages