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Has Microsoft given up on small business?

By November 17, 2019No Comments

(This post originally appeared on The Guardian)

Microsoft’s history with small business isn’t great. Over the years, the company has tried countless applications geared specifically to small firms. They’ve had “small business” versions of Microsoft Office. There was once a “small business” accounting package and an Outlook-based contact manager. The company had, for a long time, a “small business server” suite of applications for email, security, networking and data management that was priced and tailored for that market. There was, up until last year, an entire small business division at Microsoft, complete with its own sales, marketing, communications and support teams.

All of this has gone away. So is the software giant giving up on small businesses? Not really. The company is just trying another tactic. It’s punting for better field position.

Microsoft Office 365 is still the leading suite of collaboration and communication tools used (or in the case of many of my clients, underused) by millions of small businesses worldwide. And the company continues to add new features and automation tools to keep those customers productive and happy. But as for core applications specifically designed for SMBs? That’s not happening. In fact, the opposite is happening.

The latest example occurred just last week. According to technology site ZDNet, Microsoft announced that it was discontinuing support of both its simple invoicing and Outlook-based contact management applications that were mostly geared to small companies.

No, the software giant isn’t leaving the few customers of these applications out in the cold. It’s struck agreements with invoicing service Invoice2Go and customer relationship management provider Nimble to take these companies onboard. Both Invoice2Go and Nimble are not only inexpensive, but – like their accounting competitors which include QuickBooksXero and FreshBooks or CRM offerings from ZohoCopper and SugarCRM – are powerful and better geared to small businesses who need a simple accounting or CRM application.

Of course, Microsoft has financial and CRM tools as part of its Dynamics product suite. But these are priced higher, require a different level of implementation, and thus are geared more towards mature companies. Unlike small businesses, the companies who use these applications have the budgets and resources to pay for these applications.

Microsoft’s move away from directly selling and servicing small business reveals an obvious but little discussed fact in the tech community: we are a pain in the neck. We have very similar demands as larger organizations but we have fewer resources, less knowledge and, let’s face it: less patience. We require more coddling, more hand-holding and a higher level of support because we can’t do it all internally. And yet, we’re reluctant to pay for all of that. As such, we’re less profitable.

Of course, Microsoft’s CEO, Satya Nadella, would never say this in public. But I’m sure he took these facts into consideration when reorganizing his company in 2018 to focus more on cloud services. Instead of dealing directly with these difficult smaller customers, Nadella has politely punted the obligation to his partners – like my firm – and is investing in tools for those firms to help their SMB clients.

Whether or not small companies want to pay for that work is a matter of debate. But for Microsoft, this is not the abandonment of small businesses, it’s enablement. “We want every company out there to be a tech company in its own right, and you are the community that’s going to make that happen,” he said at a recent conference of partners and developers. “And our mission is to empower you to do that.”

Enablement? Empowerment? For me, it’s just a punt for better field position.

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