Bill's Excellent Adventure

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The smallest businesses probably don't have a PC network or even a professional info-tech employee. These start-ups can benefit from Small Business Center (formerly bCentral), a set of Web-based services hosted by Microsoft on its own computers. The pitch is that it's like hiring Microsoft to be your info-tech department for a monthly or annual rental fee, usually after a 30-day free trial. First developed in 1999, the services -- aimed at businesses with fewer than 25 employees -- have quickly become popular, attracting more than 2 million users in the U.S., Microsoft says.

One of them is Jack Marshall, president of Pastry Chef Central in Boca Raton, Fla. His small family business sells baking and pastry tools through pastrychef.com. "It's supercheap," Marshall says of Microsoft's "shopping-cart" services, which cost only $249 a year (excluding credit card verification fees, which are billed by a third-party partner). "You can't beat it." And even though Microsoft can't give the little guy all the powerful features of an Amazon, "they're moving toward that," he says. Marshall particularly likes the new "order status link" that sends e-mail purchase confirmations to customers with Web links so they can check on delivery without having to contact the company: "That's been a fabulous timesaver for us." Besides time, there's the money: Microsoft says that the top 100 customers for Small Business Center's e-commerce service averaged $43,000 in revenue last December.

Small Business Center also offers ListBuilder, which enables companies to send mass e-mails to customers to let them know about sales or other news. Microsoft handles the mailing, then tracks who opened the messages and were inspired to visit the sender's website. The cost: $29.95 a month or $299 a year. Microsoft surveyed 100 ListBuilder clients and found that businesses sent e-mails to an average of 30,000 customers, though some had amassed lists of more than 100,000 names. (Microsoft says it does not keep e-mail addresses for its own use.)

One of Microsoft's most useful hosted Web services is SharePoint, which allows colleagues to share information and collaborate with one another and their customers. SharePoint is sadly underused by small businesses, but it's a smart idea. In a Microsoft case study, Jeff Williams, president and owner of Carolina's Choice, a furniture manufacturer in Rocky Mount, N.C., says SharePoint allowed his company to make up-to-date sales information available 24 hours a day to a network of 700 furniture dealers (the cost: $19.95 introductory price, then $39.95 monthly).

As fledgling companies grow, Microsoft wants to wean them from paying monthly rental fees to investing in licensed software installed on PCs (which is how Microsoft has always made most of its money). The staple of the desktop PC has long been Microsoft Office (Word, Excel, Outlook, and PowerPoint), which boasts 400 million users worldwide. "Everyone I hire out of college can use it," says Eric Meslow, president of Timbercon, a 30-person, $4.5 million fiber optics manufacturer in Portland, Oreg. That gives Microsoft a big advantage over Linux, which often requires training.

The latest twist: Last October, Microsoft introduced Office Small Business Edition 2003, which lists for $449, while earlier Office users can pay an upgrade price of $279. The prices are up to $50 higher than the standard version, but Microsoft throws in two compelling programs. First, Business Contact Manager consolidates all the information you have about a customer, a dramatic improvement over the haphazard data silos discovered by Nelle Steele that could spell lost leads or missed sales opportunities. The program can identify long-neglected sales accounts or alert you to what's coming up in the pipeline in the next seven days. Timbercon's Meslow says that before his salespeople had this "sales funnel" feature, it took them an hour a day to monitor their accounts. Now it takes "about two minutes," he says. Meslow figures that saves a total of 20 hours a month for his typical salesperson, who generates an average of $150 to $200 an hour.

Office's other addition, Publisher, is a tool for creating websites, e-mail newsletters, and other marketing materials so you don't have to hire professional design firms or printers. Timbercon saved $72,000 in the first year by designing portions of its website and product data sheets. "Publisher was one of the larger surprises of the new line for us," Meslow says. "Five years ago you could tell if something was created in Publisher. Now it looks professionally done, and it's relatively easy to use." It's also fast, he says. A project that once took three weeks for outside firms to design and print can be created in-house within a week.

"Five years ago you could tell if something was created in Publisher. Now it looks professionally done."

Terry Szpak, VP of marketing and sales at Telesystems West, an 18-person, $2.5 million company in Bellevue, Wash., that sells and installs phone systems, estimates sales rose $5,000 to $10,000 a month thanks to Publisher. Over its first dozen years, Telesystems had put together a database of 5,000 customers, but employees were too busy to create or manage promotions to sell additional products. With Publisher they were able to turn out flyers and e-mails. "It's hitting people who already trust us," Szpak says. "Marketing to our existing customer base has been a boon."

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