I remember listening to Geoffrey Moore, author of Dealing With Darwin, speak about how two of the most famous names of the 90s boom -- Dell and Wal-Mart -- were "sucking wind" in the new millenium based on low user experience quotient. According to Moore, having one trick (like always low prices) is no longer enough for today's pampered consumer -- as the user-centric market takes hold, all companies must compete on experience in order to continue to hang on to existing market share and branch out anew.
Compared to its peers in the consumer OS market, Microsoft hasn't been especially championed as a designer of captivating interfaces. However, compared to many other business software, the Office suite offers the comfort and ease of use of long familiarity. The Redmond, Wash.-based software company, which held its Convergence 2008 conference in Orlando this week to celebrate developments in its ERP suites, is therefore looking to capitalize on this user-friendliness to turn the highly competitive ERP space into a growth market.
According to Microsoft CEO Steve Ballmer, his "biggest initiative" at Microsoft was "pushing us into the business software space."
"That is, until this Yahoo! deal goes through," he clarified with a laugh.
During his opening keynote, Ballmer talked about the gap between the realm of business application platforms (such as databases and mainframes) and the realm of personal productivity applications (the paradigm of home computing), and how this gap is being quickly filled up by tools and applications that enable analysis and teamwork to happen for companies desperate to, as Ballmer put it, turn data into information, and make that information accessible.
According to Ballmer, this middle ground between infrastructure and application is the exact area that Microsoft is hoping to expand market share in with its Dynamics interface updates and Dynamics/Office integrations.
"The white space lies between the application platform and personal productivity," he observed. "There will be more value created here than any other place."
In order to create this value (and derive revenue from it), the key is winning the hearts and minds of a new generation of information worker weaned on streaming video multimedia -- no easy task, for sure. Meeting those expectations will not be easy, but the potential rewards are huge.
Ballmer believes (and anecdotal and survey evidence backs him up) that frustration with common business software extends up and down the line, and that this "usability gap" so common to enterprise software is daunting for everyone concerned, from the shop floor to the back office to the C-suite. He said, "I asked CEOs how many had interfaced directly with an ERP screen? Not many." Give them a less daunting tool, he says, and they will gladly use it.
Microsoft is also capitalizing on another trend, using personal interface customization to drive ERP application availability/usage into new places. "We love the role-based user interface," he remarked, warning the 10,000 users, partners and analysts present at Convergence to expect it everywhere in their suites in the next releases. The new release of AX, which features much of this enhanced functionality, is expected to ship in the first half of this year, with the improvements filtering into successive releases of the other three suites.
Another interesting assertion about integration between platforms has a payoff in performance as well as usability -- Ballmer stated that the Dynamics AX 2009 release shows about 40% performance improvement running on SQL Server and Performance Point 2008.
During the middle part of Ballmer's speech, Ron Rittenmeyer of outsourcing heavyweight EDS came out onstage and spoke very favorably about the new application design. Rittenmeyer said that EDS, which manages 3 million desktops, 100,000 servers and 26,000 contact center agents in 26 countries for 450 clients in 28 languages, doubtless is the repository of "a deep knowledge of user experience." During his short talk, Rittenmeyer also announced an expansion of the EDS/MSFT strategic partnership with details to come.
During the speech, Ballmer also oversaw a live demo of how seamlessly Microsoft's CRM Live can integrate with Outlook, yet another advantage available with Microsoft-on-Microsoft action. Easy, one-click portability of contacts, records and even upcoming features like Virtual Earth integration are taking usability and customization to drag/drop levels (although IT/HR managers might want to disable the Virtual Earth mapping/search function for users unless absolutely necessary; otherwise employees might just surf the rich 3-D maps all day).
In closing, Ballmer reiterated that in his plan, business applications are "mission critical" and Microsoft will continue to focus on the mid-market space and individual enterprise divisions/strategic business units; a smart strategy seeing as many division-level managers have purchasing discretion and basically operate as independent entities. And after all, once Microsoft gets its big foot in the enterprise door, there may be no holding this software giant back.
Kirill Tatarinov's keynote speech also centered around the idea of Microsoft riding its usability advantage deep into the mid-market and enterprise space by leveraging Dynamics' integration capabilities with MSFT's Office installed base. Tatarinov says the main tool to drive this change is the role-tailored experience configuration of the upcoming ERP versions. Tatarinov says that Dynamics AX 2009 actually got his customers excited about using ERP software, which as you might expect is no small feat. "They wanted to talk about how this software made them feel," he said. Customers speaking up about their ERP systems is not in itself unusual, but up until recently such positive feedback was few and far between. However, with "experience" coming into new focus, other software firms are sure to follow (and at least one, IFS, is also redesigning its main ERP interface to account for increased customization and ease of use).
Tatarinov also rolled out three examples of Microsoft's Software + Services program: a set of keyword marketing services to integrate with MSFT AdCenter (LiveSearch, MSN, Facebook were the three channels mentioned); a marketplace auction service integrated with eBay; and credit card authorization and payment services (integrated with Chase and PayPal) that he says will eventually be integrated into all four of the Dynamics ERP solutions.
Finally, Craig Dewar director of Microsoft Dynamics' marketing efforts, talked up the AX 2009 release and some of the cool, new functionality built into it. For instance, the role-tailored interface gives users a customizable portal as they allow users to drag and drop the most useful pieces of code onto a single page. Speaking as a CFO might react, Dewar said, "I'm a business guy, not an IT guy, but I still want to be able to customize what I see."
Finally, Dewar also pointed out Dynamics' sustainability dashboard, which enables visibility into carbon emissions by retrieving and importing data on the electricity production mix directly from the utility's web service. This "energy mix" data is then converted into its corresponding carbon output for companies concerned with mitigating carbon risk or complying with customer mandates.
During the event, I also got to speak with experts from Microsoft's manufacturing team like Sharon Ward and Jeff McKee, who described a few of the new release's features and improvements in more detail (look for more coverage in next month's magazine) and also talked about the ongoing integration of the eBECS lean manufacturing tools they purchased in the first quarter of last year into their ERP platform.
Finally, I was pleased to participate in helping lead an interactive discussion on the AX carbon dashboarding tool that involved a wide range of voices, from Microsoft customers Sole Technologies (an action sports apparel and footwear manufacturer) and well-known sustainable cleaning product manufacturer Seventh Generation, to senior product manager Jennifer Pollard, who has spent the last few years deeply involved in helping Microsoft determine how these new ERP releases will aid in complying with manufacturers' newest set of environmental constraints.
Between the "lean" and the "green" tools, and the customization and experience orientation discussed earlier, it seems as if Microsoft's knack for staying on trend in the consumer sphere might be another advantage that translates to the business software space.