Continuing its push to grab larger chunks of the SMB (small and midsize business) markets, Microsoft Corp. on Friday confirmed it will ship a low-end accounting package -- code-named Magellan -- with a new version of Office, and the two will work in concert.

Expected to be available late next year, the upcoming version of Office will include the usual lineup of applications, but will now include Microsoft Small Business Accounting, described by company officials as a "financial management solution." The company will also include in the bundle improved versions of Outlook 2003 and its Business Contact Manager.

Together the bundle is intended to help smaller shops with managing sales, marketing, and a number of financial processes, according to company officials. The new offerings figure to go up directly against those of the long-time market leader Intuit Inc."s Quicken and Quickbooks applications.

Microsoft worked with Automated Data Processing"s Small Business Services unit in creating the upcoming SMB version of Office, a developer of integrated outsourced payroll and human resource services. The two will offer users an integrated self-service and full outsourced payroll services, including signature ready tax forms and integrated checks, and support for direct deposit.

Just last year Microsoft launched Microsoft Office Small Business Edition 2003. The new edition, however, is designed to broaden the range of solutions for smaller companies, company officials said.

"More and more of these guys (SMBs) realize that effective contact management is like stuffing dollar bills in their own pockets. The key is to make the process as efficient as possible, especially in firms that may still have some staff keeping leads on 3-by-5 cards in a show box," said Ray Boggs, vice president of SMB research at IDC.

More information about the upcoming product can be seen at http://www.microsoft.com.