To the Middle: Big ERP vendors haven’t done well in the midmarket. Can Microsoft do better?

Information Week: The competitive landscape for business-applications software is changing. To understand how, get out an atlas and look for Vedbaek, Denmark, then Fargo, N.D. What do those outposts, 4,300 miles apart, have in common? The answer is in Redmond, Wash. Microsoft officials have been racking up frequent-flier miles for the past year, methodically acquiring and developing products aimed at a large and still largely fragmented market: business applications for small and midsize companies. A year ago, Microsoft acquired application developer Great Plains Software for $1.1 billion, and two weeks ago, it snapped up Navision for $1.3 billion. Related to it all, the company has been working internally to develop a suite of customer-relationship management apps that’s due later this year. (full story)
My spin: There’s no reason why Microsoft can’t succeed in this market – while its competitors do well also. The pie is huge and the stakes are hi. Failure for Microsoft means losing a few million – billion but they’ve got a lot more where that comes from. Failure for a smaller company may mean a lot worse though.
Another thing MS has going for it – is that zillions of offices both small and large use Microsoft Office applications and by tightly integrating back office applications into its flagship products, half the battle may be won already.