If you run a small business, good news - you won't need a database. Perhaps you think that's unlikely - there are customer and supplier records to be kept as well as product data, information on your personnel and any other data you might wish to organise.
Nevertheless, if you buy Microsoft Office Small Business Edition, you won't get Microsoft Access, the company's flagship relational database. Instead you get a tailored program that manages your contacts, as well as an email and organiser program, some small business tools, a spreadsheet and a word processor. That is what the typical small business wants according to the Gates dynasty.
It gets better. Not only do you not need a database but later this month Microsoft is launching the new version of Small Business Server, the cut-down version of Microsoft Exchange that manages and administrates an entire network. A company's own network supervisor can do this, as can a dealer or an application service provider.
This isn't suitable for everyone, however. Matt Jones, technical director of Banxia Software, says he won't use Microsoft SBS simply because it is overkill. "And if it goes wrong you lose the lot unless you are prepared to spend a few days of expensive technical time sorting it, and working without your server," he adds. Charles Pearmain, head of Select Systems, sells software to small businesses but queries the cost of Microsoft Office: "By the time the MS operating system and application suite have been purchased the cost of a business system has been increased by 50%. A database development tool can add another £100 or more."
It is easy to spot what those two small business managers share in common, though - they are both in the IT field and therefore know what they're doing when it comes to setting up their own systems. Presumably the purveyors of the packaged "small business system" would rather help the person who doesn't understand the technology but has a business issue to solve. This is the logic behind materials such as the disk that can be had from www.clearlybusiness.com. This contains a strategy builder, a time and money saver (or "planner" as the rest of us call it) and a demo of the company's website. This is aimed at the real beginner, as are many of the office suites. Still, ask someone who knows about small business what the managers actually want and the answer tends to be none of the above.
David Hands, a spokesman for the Federation of Small Businesses, is all in favour of the Microsoft Office approach - give someone a word processor, email, contact manager and spreadsheet and let them tailor the rest for themselves - and acknowledges the difficulty of pitching a package at the right level. "Around 95% of businesses in the UK have fewer than 10 employees and it's the owner manager who decides what gets bought," he comments. "Larger firms have someone to look after that side of things." And one way of getting to the owner manager is presumably to stick "small business" on the box and hope someone will pay attention.
Arriving at what a small business will actually need is far from easy. Hands sees a real need for payroll functions in the very near future. Family credit rules are changing and stakeholder pensions come into force in October. "There will be a lot of time and expense getting those together, so you'd need some help in there," he says. Help in this area is more likely to come from the niche players - the people who specialise in accounting and financial systems, and who look at the smaller end of the market. Companies like TAS Software, Intuit with its Quickbooks offering and Sage with Instant Accounts all serve companies at the two employees plus level, while Microsoft and Intuit offer Money and Quicken respectively. These are personal financial packages with "deluxe" or "pro" versions, with invoicing elements for the self-employed person wanting to keep their business and personal financial data in the same place.
Financial and payroll data is one area in which companies can aim their systems clearly at the smaller enterprise. Start-up company My Business (www.mybiz.co.uk) aims not only to offer a book-keeping package to its clients but also an organiser including contact data and calendaring outside the financial framework. Co-founder Mark Searles says the company spent serious money on researching exactly what the market would want, and agreed that the disparate sorts of small business was a potential problem. "We found that although you could take an architect and a plumber and put them in a pub together and they'd share nothing in common, there were areas they could talk about in business." These included the frustration of admin tasks, hence the book-keeping and calendaring functions in the My Business system are tied together: "When an invoice is 30 days old, the book-keeping part tells the calendar and you get a reminder to chase it." Microsoft, currently readying Office 2001 for release, also offers the small business a financial planner and a business planner but no payroll or book-keeping function outside of a straightforward spreadsheet.
Not all customers believe the small business version matches their needs. Nick Moon, director of ABS Cases, says there is often too much in it and he still uses a years-old system for his core business activities: "In fact, the main reason we have these tools is because everyone else does and we need to be able to exchange documents." Microsoft's Small Business Server differs from Office in that it handles underlying technologies rather than the applications themselves. Instead of offering a word processor it will allow you to share a database across a network, and other elements of it will allow people to share an internet gateway or a fax system. Simon Husbands of Richardsons Accountants explains that the benefits aren't always easy to quantify, but that working practices have changed as a result of installing the system. "Being able to put internal and external emails together was helpful, and in terms of connecting every desktop to a single internet connection rather than having a modem attached to each individual computer - well, we wouldn't have done it." Husbands' view of the advantage of putting all the internet, fax and other servers into the same package is simple - it costs less if you buy them all at the same time. Jane Peirce Jones, director of the Council of Museums in Wales, has noted improvements using SBS even in an organisation with only 10 employees. Using an ISDN link and SBS the organisation can treat its two offices as one. A side benefit was the team-building spirit during the training period.
The Microsoft offerings will be joined by increasing amounts of dedicated small business packages as the market gains steam. Figures from the Department of Trade and Industry suggest there are 3.7 million businesses in the UK, 85% of which employ five people or fewer, so from a purely commercial point of view this is a market the hardware and software companies won't want to miss - which is why there is a constant stream of hardware manufacturers describing their computers as "ideal for small business" when they actually mean "a working computer whose graphics and sound aren't good enough for teenagers". And there remains the question of how necessary all the extras are. There is duplication within individual packages - Microsoft Office has a contact manager in Microsoft Outlook and another in the small business services section of Office; Outlook is in Office as well, and although the address books can be made to talk to each other it is unlikely that many customers will need both.
Richardsons' Husbands says the price of SBS was low enough he didn't feel he ought to try every component for the sake of it. Chris Sharp, managing director of accounting systems house FourFront, suggests people could be making more of the technology they already have: "Many of the ideas and processes behind e-business can be transposed or transferred into most companies' existing technology infrastructure. The rationalisation of processes and the improvement of communication up and down the supply chain can easily be achieved using automated faxing, email and simple internet browsers."
