Office Business Applications: The Pearl In Microsoft's Partner Strategy Oyster

As usual at such events there was a lot of sound and light at the 2007 Microsoft (MSFT) Partner Conference but I think one of the most significant items received just a slight mention in one of the Microsoft press releases. It is the Office Business Applications [OBA] functionality/program wrapped around Office 2007. Something like OBA does not make the press release because it’s not new; it’s a program that has been lurking in the background for a few years awaiting the Office 2007 rollout before it could be more fully promoted.

Its significance is that Microsoft desperately needed to figure out what to do with its thousands of Windows partners as its strategy migrated to Software as a Service (SaaS). Microsoft has recognized this issue since it acquired Great Plains and Navision because it also affects core ERP application functionality. In a world of Windows Live—or whatever it ends up being called—there is less need for techies to customize millions of Windows Server boxes (unless of course they live in central Washington State).

In a world of commodity accounting and purchasing (and/or delivery of those functions SaaS), there is less need for application programmers reinventing the wheel all around the world.

The idea would be to get partners filling in “the industry-oriented fan” strategy first outlined by Microsoft Business Solutions group in 2002. Many of the partners are already industry centric. Theoretically, there are 9,999 industry niches at the four-digit NAIC level and Microsoft would like to have partners offering solutions in every one of them. Aside: Microsoft has already proven that there is nothing wrong with overambitious and unreachable goals.

OBA is an enabler of that idea. Neither SAP (SAP) nor Microsoft might like this analogy but think of OBA as Duet for everyone else. I first saw it at the Microsoft TechEd 2006 conference in Boston, but I think it goes back before that, paralleling the long slow gestation of Office 2007. At the techie conference in 2006, OBA was extended with “LOBi (line-of-business interoperability) for Microsoft Office SharePoint Server.”

The LOBi capabilities and OBA are services (in the computer science sense of the word), and consisted of the following at that time: workflow; search; a Business Data Catalog; a new Office user interface that supports roles; Microsoft Office “Open XML” Formats; and the Web Site and Security Framework. Likely something has been dropped and something else added but the concept remains.

Possibly end users can even contribute to providing the thousands of industry-centric add-ons to Office (and in their case Dynamics) that the market needs. The premise is that with OBA and LOBi, enterprise software is not only easy to “program” (maybe even by power users or business analysts rather than guys with computer-science or math degrees) but somehow self-tests, self-deploys, and self-administers itself. In this new 'Live' world the developer or end user would not have to worry about the front end, because the front end would be the same front end 80%-plus of enterprise users already look at every day to do their email, document and spreadsheet creation, and so forth, reducing end-user training on your “in-house-written application” to a theoretical minimum of zero. And of course, there is no back end to worry about because it’s in central Washington State.

If this is the Microsoft tactic, as I believe it is, it’s a great play. Because unlike all but a few other companies, IBM (IBM) for sure and possibly Oracle (ORCL) and SAP, Microsoft has the resources to make the play and a marketing alternative (the Dynamics line of packaged apps in Microsoft’s case) if it doesn’t work out. OBA, like many similar programs, has its own community here.

To be fair, investors have to ask whether functionality such as OBA/LOBi, given its dependence on Office 2007 is too late to market. Despite the delay of a few years the answer is no. Even with the hype around “application exchanges” and newer buzzwords for the idea that the IT market can’t do it all, what Microsoft is essentially trying to do is no different than what salesforce.com (CRM), Red Hat (RHT), SAP (with its ESA architecture and Duet) and others are trying. None is any further along than Microsoft and none has the proven channel that Microsoft has. SAP has deeper industry coverage and salesforce.com is deep in CRM functionality but Microsoft has breadth at the 4-digit NAIC level simply because of the size of its user base.

My research says the world needs 9,999 separate ERP/collaboration suites. Let’s see who’s going to write them.