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Microsoft Eyes Public Sector 'Encore'

UPDATE: Microsoft's business solutions group Tuesday said it has acquired several pieces of accounting software from Encore Business Solutions that are focused on public sector organizations.

The assets will be rolled into Great Plains 8.0, Microsoft's enterprise applications suite, the Redmond, Wash.-based software vendor said in a statement.

Thanks to an existing OEM agreement with Encore, Microsoft already included Encore software modules for not-for-profit accounting, inter-company payables management and requisition management applications in its Great Plains suite.

Owning the code simplifies things for partners and customers, said Glenn Bray, director vertical strategy for Microsoft Business Solutions. "There are fewer people at the table, so the whole process is smoother." As well, he told internetnews.com, "It's a credibility builder among the SI [software integrator] and ISV [independent software vendor] communities to have the right foundation."

Dan Duffy, president of ePartners, an international Microsoft Business Solutions provider, said the IP acquisition was a positive thing for his company.

"It's a testament to the stability of the technology and their commitment to the vertical, " he told internetnews.com. "It shows that when it's appropriate, Microsoft will build important vertical solutions or, when it's appropriate, acquire leading technology solutions in the marketplace."

Duffy's company was today appointed to several Microsoft Partner Advisory Councils (PACs): the United States PAC, Global PAC, Microsoft Customer Relationship Management PAC and Retail Management Systems PAC.

Great Plains 8.0 is scheduled for release this summer, adding such non-profit functions as grant management, fund accounting, and encumbrance, the process of tracking and monitoring third-party funding commitments.

"The 8.0 release of Great Plains is a substantial leap forward," Duffy said. "I got an early peek, and it's some pretty sexy technology."

Microsoft aims to give ISVs a platform to which they can connect their own products, either by extending the core functionality of the Microsoft business application or by embedding it in the customer's own application.

Bray said Microsoft Business Solutions has a three-layer model of application functionality in vertical markets: Horizontal functions like accounts payable are standard, while "deep verticals" are highly specific applications such as the software needed to run a small law firm or manufacturing plant. In between is the "industry enabling layer," Bray said, and that's where the Encore modules fit in. Filling in the industry-enabling layer enables partners to focus on features that will truly distinguish them to customers.

"We'd like to be pure about horizontal and vertical," he said, "but we have to recognize that there are a set of fundamentals across industries."

Duffy said the inclusion of Encore's non-profit sector modules in Microsoft's platform shouldn't step on any ISV toes. Because Encore is a market leader, and ISVs typically build products where there are gaps, he said,

"If an ISV was building code that's an overlap to Encore's, I'd argue that that ISV had failed to build a differentiated product. [The code acquisition] positions everybody a little better for succeeding in that vertical."