At its Small Business Summit in Bellevue, Washington this week, the company said it is lowering the minimum transaction level required for the Microsoft Financing program from $10,000 to $3,000. Under the program, small businesses can get 36-month loans to finance their purchases, covering Microsoft software plus related hardware and services. By reducing the required spend, Microsoft is hoping to attract small businesses, such as those with fewer than 50 employees. It has also extended its 90-day deferred payment promotion which was due to expire on March 31 but will now be available until June 30.
The driver for the small business program is that small businesses in the US are expected to increase their IT spending by 9%, and Microsoft is eager to grab most of that increased spend.
At the opposite end of the market, Microsoft is also making inroads into the enterprise. It has announced several enterprise-level deals for Microsoft CRM 3.0. An enterprise deal is defined as 500 licenses or more. Kansas City-based H&R Block has signed up for 1,500 CRM licenses and has a five-year plan to deploy 6,000 seats. AGFirst Farm Credit Bank is deploying 1,500 seats, and Israeli health maintenance company Maccabi Healthcare Services has increased its investment, extending its deployment to 1,200 seats.
However, SAP and Oracle do not have anything to fear for the moment because Microsoft is still selling primarily to SMBs, while its enterprise deals tend to be for divisions within large organizations. But it is winning deals because it can offer high levels of integration with the familiar Office and Outlook environments that also enable it to address usability and user adoption issues. SAP has a strategy to deal with this: by partnering with Microsoft on the Mendocino applications. Oracle has yet to address the desktop client interface issue, other than providing its own interface.