Denmark-based company Navision has been recently acquired by software giant Microsoft. Yash Nagpal, managing director, Navision India explains to Stanley Glancy the effect this takeover would have on its Indian operations

What are the dynamics of the acquisition of Navision by Microsoft?
The Microsoft offer for acquisition of Navision was made in April while the deal was finalised only on July 11, 2002. Microsoft bought our shares at the rate of $40 each, amounting to a total of approximately $1.45 billion, which was paid for in stock as well as in cash. Subsequently, Navision has been delisted from NASDAQ and other stock exchanges and we are now the seventh new division of Microsoft, called Microsoft Business Solutions. Even Great Plains, a US-based company, which was acquired by Microsoft last year, is a part of this division.

Microsoft Business Solutions will continue to develop, market and support Navision’s business applications. These applications, which will now be known as Microsoft Navision Axapta, Microsoft Navision Attain, Microsoft Navision C5 and Microsoft Navision XAL, will join the portfolio of products currently offered by Microsoft Business Solutions.

How will the acquisition affect Navision’s India operations?
The acquisition has not changed anything for Navision India. The timing has been perfect for the Indian market, as the acquisition came through just when our solution centres were coming to the end of their training programme. The company will continue to be known as Navision India till the integration process is complete. The synergies are obvious since most of our products are based on Microsoft applications. Even prior to the acquisition we worked in tandem with Microsoft India, as a technology partner and enjoy an excellent relationship with them. The acquisition has just strengthened this bond and so there should not be any problem in the integration process. Navision has 65 solution centres in India, which will now be known as Microsoft Solution centres. We are planning to open up more solution centres and will touch the hundred mark by the end of the year. Our revenue targets for the year will remain the same but we aim to reach $15 million by the end of next year.

How will the new department function?
Customers and partners will benefit from the combined product strength and the global presence of the new division. Microsoft Business Solutions includes the businesses of Great Plains, Microsoft bCentral and Navision. The division offers a wide range of business applications designed to help SMEs become more connected with customers, employees, partners and suppliers. Microsoft Business Solutions’ applications automate end-to-end business processes across financials, distribution, project accounting, e-commerce, human resources and payroll, manufacturing, supply chain management, business intelligence, sales and marketing management and customer service and support. The combined revenue for Navision and Great Plains in the previous year was around $500 million. Microsoft plans to grow this business twenty-fold in the next few years, which shows Microsoft’s faith in the division.

What advantages has the acquisition offered to Navision in India?
The Microsoft acquisition has worked to our advantage. Navision had just entered the Indian market and though our growth has been fast, it would have taken us time to establish ourselves like we have in Europe. The Microsoft tag assures customers of the reliability of our product. Most of our products support Microsoft Windows NT, Windows 2000 and Microsoft SQL server.

The acquisition has also ensured our products a longer life cycle. All the investment we had made in the .Net platform is also comfortable. In the future many solutions will be sold and supported over the Internet and there can be no better partner for Internet strategies than Microsoft. Earlier we began developing a solution when Microsoft announced the launch of its new platform. But now we can work in tandem, thus reducing the time-to-market.

How has Microsoft benefited from the acquisition?
Microsoft will now be able to advance into the SME market with its .Net offerings at a much quicker pace. Today, Microsoft is the biggest provider of business solutions for the SME segment. Our shareholders have already benefited as they have got a much better deal than they had bargained for, considering the stagnant state of the market. This means increased opportunities for our employees as they are now part of a larger organisation.

Will there be any business conflict between Great Plains and Navision?
Although, there are concerns about overlap of products between Navision and Great Plains, both are strong in different markets. While Navision is strong in Europe, Great Plains is strong in America. The geographic share and many aspects of the product lines are highly complementary. 86 percent of Navision’s business comes from Europe, and 80 percent of Great Plains business is in the US. There will be major changes in the products in the long run. But at the moment there are no intentions of killing off any of them. In the markets in which we are present only our products will be sold. Great Plains won’t enter any market where we already have a presence.