And Your Host Is...

Microsoft and Oracle serve up new online tools

Geisel Inc., a plumbing supply house in Elyria, Ohio, is like a lot of small businesses moving onto the Web. Geisel markets and sells products online. But the 65-year-old store can't run its entire $4 million-a-year operation over the Internet. Its most critical software application--a database program customized for the plumbing and air-conditioning industry--still runs on a local-area network.

Microsoft (MSFT ) and Oracle Corp. (ORCL ) would like to change that. The perennial combatants dream of the day when all small businesses will tap software hosted on the software giants' computer servers--rather than on the businesses' local-area network or desktop PC--to run the guts of their companies. The hosted software would be extremely flexible, and customized by users in nearly any industry.

For now, it's a pipe dream, for plumbers or anyone else. Still, Microsoft and Oracle have made remarkable progress. Both now offer integrated Web-based applications that--while hardly indispensable--can make running a business easier.

When they were launched two years ago, Microsoft bCentral and what is now Oracle Small Business Suite were very limited. BCentral was a collection of disparate programs that could be opened at the same Web address. Oracle Small Business Suite (then known as NetLedger Inc., which has now partnered with Oracle) provided just an online accounting program. That intrigued a lot of business owners, says Stephen Wolfe, the Oracle vice-president in charge of the small-business suite, but didn't win many customers.

Now, following separate overhauls this spring, bCentral and Oracle Small Business Suite offer more than a half-dozen integrated applications, including customer-service and Web-site-development programs. Since last year, 65,000 small businesses purchased bCentral subscriptions. Oracle says 5,000 small businesses had paid for service as of August.

Should you join them? Consider two things: your computing needs and the price of meeting them. Neither service offers every application you're likely to want (table). For example, if you use human-resource software to track employee benefits, or supply-chain software to track product distribution, you'll need to stick with what you have; neither service offers them.

VIRTUAL MEETING ROOMS. What about price? If you're building a simple Web site, then bCentral--sold à la carte, starting at $29.95--is your best bet. It's cheap and easy. But if you're looking to do more, Oracle might be better. It offers a monthly flat fee of $99, with a la carte rates starting at $9.95 per user per month. Do the math, and you'll find that a small business with five bCentral users pays $2,103.65 a year for e-commerce, accounting, customer-relations management, and Web-site administration software. For roughly the same features, but including payroll software, Small Business Suite would cost the same business $1,188. Geisel, by the way, expects to pay $2,400 to $3,600 in the next 12 months for its bCentral services, and to generate $60,000 in incremental sales electronically.

While Microsoft hasn't announced any changes in bCentral's pricing, it is trying to improve the service. The first step is the introduction of Microsoft Great Plains Small Business Manager, planned for later this year. The new program, the result of Microsoft's $1.1 billion purchase last December of Great Plains Software Inc., will offer features unavailable in bCentral's Finance Manager, such as payroll services, advanced financial analysis, and account balancing--which Small Business Suite already has.

Other improvements scheduled for the next 18 months include further integration of Microsoft's popular Office suite. BCentral users will be able to send and receive data between desktop versions of the software and bCentral, turning the Web service into a companywide network. Already, bCentral can be used with three programs: Microsoft Outlook, an e-mail and contact management module; Excel, a spreadsheet program; and FrontPage, a Web-site management tool. A fourth, intranet software called SharePoint, was made available on bCentral in late May. Using SharePoint, small businesses can create virtual meeting rooms and upload data directly from Office XP, the most recent version of Office.

WORK IN PROGRESS. For now, bCentral still has some kinks. For example, you can upload--but not download--an Excel spreadsheet to bCentral. And you can import lists--but not transactions--from Intuit Inc.'s QuickBooks, the most widely used small-business accounting program. Also needing help is the online help desk. Submit a question as prompted, and there's a good chance you'll receive an automated request to resubmit it. And SubmitIt!, a service that allows small businesses to submit the name of their bCentral Web site to search engines, "is a little unpredictable," concedes Satya Nadella, vice-president of bCentral at Microsoft.

Oracle has work to do, too. Its software to keep customer profiles updated is little more than a contact manager and calendar. Oracle says it will be replaced in October by an expanded program that will include an automated sales program that tracks whether a prospect has become a customer, and easier-to-use payroll software. Next year, Oracle plans to add human resources software and a supply-chain-management module--and you'll probably pay extra for them.

When all these improvements are complete, will you be persuaded to turn an old-line business into an online one? Maybe not. But rest assured, with Microsoft and Oracle hosting, the party has just begun.

By Kevin Ferguson

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