What next for Microsoft in the Accounting/Payroll space?

It wasn't my intent to discuss this topic today, but having read this news about the Payroll module in Microsoft Office Accounting for the UK, it got me wondering about where to next for Microsoft. Microsoft has now released Microsoft Office Accounting in the US and the UK, so I suspect the established leaders, being Sage (UK) and Intuit (US), will be working on how to fend off the M$ challenge.

Interestingly, the news reporter interviewed George McHamish of Moneysoft, who was quoted as saying: "It's a worry when a new competitor arrives, but we already compete with Sage, which is a huge company compared to us. So another competitor like that doesn't worry us." I was surprised actually, that he starts by saying it is a worry, and ends saying it isn't a worry. Perhaps he was misquoted? Anyway, I digress a little (which is not unusual for me), so back to the point ...

What next for Microsoft in the Accounting/Payroll space?

I don't claim to have any insight into Microsofts plans, but as a Product Manager, Software Developer & general IT geek, I have learnt that first and foremost, you need to look at the market to determine what opportunities really exist. And the size of the market is often a critical component. The cost to develop, market, sell, support and train software is far greater than a lot of people might think. And in the commercial world, it is important to be able to demonstrate that you can attain a reasonable return on this investment. With a significant number of small businesses that are also employers in the UK (over 1 million) and the US (over 5 million), it is reasonable to expect that Microsoft will be able to attain a reasonable market share, and subsequently a good return.

So what other markets are as viable. Interestingly, looking at Australia (500,000) and New Zealand (125,000), the numbers might not be as favourable for Microsoft. I guess time will tell, but I believe the same reasons apply for Microsoft as I gave for Google not entering this space, in that customising and maintaining a solution to meet the particular unique needs of a region is not an easy task.

Here's an interesting thought though ... What if either Google or Microsoft (or both) could team up with some Open Source advocates, who may be willing to volunteer their own time to maintain the region specific needs of their solutions, while Google/Microsoft deliver the rest?

What would you like to see happen?

Stuart