Sept. 28, 2005--On Sept. 21, Microsoft announced that it had reorganized its corporate structure to streamline product development and compete with nimbler rivals. This complements Microsoft's broader effort to brand itself a partner to small businesses. To find out what this means for small businesses, interviewed Doug Leland, general manager of the company's small business division.

Q: How does the management reorganization help Microsoft respond to the needs and desires of small businesses?

A: With Microsoft's Small and Mid-market Solutions and Partner group part of Jeff Raikes' Office group, we'll be able to reach more customers with software the makes business processes, such as financial management and teamwork, easier. We think about offerings as integrated solutions, starting with the base level infrastructure, the basic plumbing of office networks. This means things like networking, storage, and remote access. Moving up a level there's the teamwork component that we address with the Office suite of tools. Moving up another layer, we get to business applications like the accounting and Business Contact Manager. Through the reorganization, we're trying to improve how the applications at each of these levels talk to each other.

Q: What do small businesses need most in terms of software and solutions?

A: We've heard four top business priorities. The first is all about sales and marketing. How do I attract new customers, and how do I make sure existing customers keep buying from me?

Number two is how do I manage my business. This has a lot to do with financial management. Smaller businesses need applications for core accounting functions like inventory management, processing purchase orders, managing payroll, and integrating banking and financial reporting with third party applications. Also, these functions have to be integrated with Office and other office applications.

The third thing businesses are talking about is teamwork. How do I get productivity our of my employees? How do I get them to work closely together, and to work collaboratively on projects?

The fourth concern has to do with mobility, and specifically giving a mobile workforce the tools they need to be productive. Microsoft's Small Business Server allows mobile a workforce to dial into their company's system and get access to critical information in an easy and secure manner. With Microsoft's Business Contact Management, they can access contacts, records of interactions (phone calls, emails, and meetings), and also sales data and outstanding invoices. Basically, we provide them with access to that information whether they're in or out of the office.

Q: What kind of research are you doing to identify these needs and concerns?

A: There are a number of different activities happening all of the time. We have cultural anthropologists that go out and sit down with small businesses and just watch what they do from dawn to dusk. Based on this research, we develop personas of the owner/manager and office manager, and design systems and solution to meet their needs and work habits. On our campus, the engineering groups the product groups spend a lot of time working with customers to conduct usability tests.

Q: A key rationale behind the restructuring is to make computing solutions available over the Internet, rather than as part of an off-the-shelf package of desktop software. How appropriate are such solutions for small and medium sized businesses?

A: There's no question that small and mid-sized businesses can gain value out of these types of services. Currently, Microsoft and ADP have a partnership to allow small businesses to subscribe to a service that automates payroll processing over the Internet. Businesses can track employee timecards with Microsoft Small Business Accounting, and them upload them to ADP to process the payroll. Business is clearly moving toward this type of hybrid environment with some systems hosted on corporate services and others offered over the Internet.