Microsoft hooks into small business accounting

Microsoft is making a play at the low-end accounting software market with plans to introduce a new member to the Office desktop suite family codenamed Magellan.

Magellan and an updated Outlook with Business Contact Manager would be added to the core of Office 2003 applications, said Steve Guggenheimer, VP of small business for Microsoft.

The software is due for release in the United States by the end of 2005, but won't hit Aussie shelves until late 2006 or 2007.

It would take 18 to 24 months to hit here mainly due to the work that had to be done on localising it for this market so it's in accordance with Australian tax rules, said Kerstin Baxter, director of Microsoft Australia's partner group.

ISVs would have access to a developer kit and local OEMs could use it as a useful add-on to their existing offerings, Baxter said.

The target audience was very small businesses with owners or managers who handle the company's finances.

The suite would build in integrated workflow so that a manager, for example, could create an invoice using Word and then route it appropriately. It also runs on an integrated Microsoft SQL Desktop Engine (MSDE).

While there were plans to offer the software bundled with Office and as an optional extra in the US, it was too early to tell what the packaging would look like on launch here, said Baxter.

Accounting software alliance partners MYOB and Quicken Australia had been briefed on the plans, said Baxter.

In this market segment, the accounting functionality would take on Quicken's QuickBooks application. QuickBooks, as great as it is, "runs out of gas" as businesses grow, solution providers said. Some US-based ISVs were on board with this release, developing their own add-ons.

The exact naming and pricing of the software has not been determined, but it likely would be called Office Edition For Small Business Management.

"We want to provide more differentiated value with Office editions for certain sets of customers," said Chris Capossela, corporate VP for Microsoft's Information Worker Unit. "We've had SBE [Small Business Edition] for a while and we put in Outlook contact management on steroids.

Magellan's a perfect example of taking it to the next level," he said. "There are some people in small business that do pretty deep accounting things as well as account management. We think we can bring them great value," Capossela said.