Microsoft, Intuit, Google and everyone else battle for small businesses

Small business is a topic I write about elsewhere — as in my day job, so typically I eschew it here. However, as small business technology seems to be getting lots of attention today, I’ll wear my professional small business marketplace watcher hat and make a few observations about today’s announcement from Microsoft regarding Office Live, a tiered suite of online services for small businesses. Coupled with the announcement yesterday of a free accounting software product for the small business market, this is a major escalation in the arms race between Microsoft and Intuit — with other deep pockets like Yahoo!, Google, eBay and Amazon also in the fray, along with an endless array of other players focused on niche small business technology and online opportunities and specialized needs. (I guess, in a big-tent way, this includes me, but here I’m focusing on the tech-provider giants.)

First off, Microsoft’s announcement is impressive: a three-tiered “freemium” product (free plus two pay options with additional services and features). One of the major advantages Microsoft has in the small business market is an army of resellers and Small Business Specialists. These folks are, in most instances, small business owners themselves who have the relationship and trust of their clients. How these “middle” players direct their small business clients in adopting the new online services vs. selling them desktop software and servers is a mystery to me.

Here is some context for today’s announcement — most are things I have blogged about in the past:

  • Like Microsoft, Intuit has a major off-line advantage in the market with the accountants and bookkeepers who are “professional advisers” for clients who use Intuit products. For example, one of the most impressive company-sponsored wikis I am aware of is Intuit’s TaxAlmanac.org which it hosts primarily for this professional (and referral) community. Intuit has also launched a “social network” site for small businesses called Jump Up.
  • Intuit and Google have teamed up on the next version of QuickBooks. This is big news as the installed base of small business Quickbook users is dominant. At the time of the announcement, it appeared that there was room for both parties to work with other players.
  • Recent announcements by Google of services aimed at the small business market, including today’s acquisition of JotSpot. Google is also beta testing a version of G-mail that allows a business to use its own domain name instead of “GMail.com.” It now has an ecommerce transaction engine. With a few tweaks, the Blogger platform could be the simplest way a small business could set up a website. Wrap all that up with a branded product (most likely product name: Google Office) and you’ve got an impressive (and, more important, simple) solution for many small businesses.
  • Amazon has been announcing all types of services in the data and fulfillment arena designed for small and medium-sized businesses. Their web hosting services may compete with the other players, but the fulfillment service is unique and could be integrated into the offerings of others.
  • eBay is a major player (remember, it owns PayPal) in certain segments of the small business world and its acquisition of Skype has led the company to work on developing something Meg Whitman calls, “click to call.”
  • Most important point: This is not a new battle. It has been taking place for at least a decade. What’s new is the shift of the battle from the desktop to the browser; from boxed software to web applications. It’s now a Web 2.0 thing. It’s really fun to watch.

    Disclosure: Most of the companies mentioned in this post have advertised in magazines published by Hammock Publishing, but none are clients — but, hey, my e-mail address and phone number are easy to find.

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