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FRANKFURT (Germany):
Microsoft is to invest $10 billion over the next five years to
develop its software offerings for small and medium-sized
businesses, according to Germany's Euro am Sonntag Sunday
newspaper.
SMB sales strategy chief Orlando Ayala told the paper in an
interview Microsoft was taking a long-term view of the sector,
which consists of some 40 million companies around the world,
and expected its investments to turn profitable in 2005.
Microsoft is the operating software on more than 90 percent of
desktop computers around the world but is now pushing into the
market for more powerful and expensive computers as growth in
its core Windows business slows.
It aims to sell up to $10 billion in software to smaller
businesses by the end of the decade and is investing two
billion dollars in research and development for SMB software
this year.
Asked about his R&D spending plans for the future, Ayala told
the paper: "It should remain in this order of magnitude for
the next five years."
He confirmed that meant a further $10 billion by 2008.
Microsoft's move into server software that it says gives
smaller firms the ability to run big-business computer systems
for a fraction of the cost will bring it increasingly into
competition with such firms as SAP (SAPG.DE) and Oracle.
German giant SAP, which specializes in so-called enterprise or
ERP software to help big companies rationalize processes and
integrate departments such as customer relations and human
relations, is also looking to smaller firms for expansion.
SAP's finance chief Werner Brandt told Reuters this week he
saw no reason to be worried about competition from Microsoft
as the largely untapped market was big enough for both of
them.
Ayala said: "We're not aiming to oust SAP or Oracle from their
core ERP business."
"In the next five years, we will concentrate on the market for
companies with 2,000 to 5,000 employees, or maybe up to
8,000."
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