Forbes writes Is Microsoft’s Business Solutions the next Windows? The next Office? Or just a small unit with outsized expectations?
Microsoft (nasdaq: MSFT – news – people ) Business Solutions (MBS) is the second smallest, by sales, of seven operating units at the $37 billion company. But Microsoft will spend $10 billion over the next five years in the hope that the division can grow by more than a factor of ten, to $10 billion, in less than ten years. There are plenty of opportunities for the unit, but Microsoft might be hoping for too much.
It needs something to look forward to though: Microsoft’s annual growth, at 14% for fiscal 2004 ended in June, is half of what it was five years ago. Sales for its flagship Windows and Office products are still growing–primarily from its large base of business and home users–but don’t appear to be creating new markets or attracting new customers. But with MBS, Microsoft is snagging new customers. Its accounting, finance and human resource software helps small customers run their businesses.
MBS is headed by Douglas Burgum, who was chief executive of Great Plains Software when Microsoft bought that company in 2000 for $1.1 billion. The acquisition gave Microsoft its entry into the business applications market. Two years later it bought a Denmark-based company, Navision, which helped open up the European market.
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