The massive, global build out of cloud computing data centers by major IT vendors continues with the news that Microsoft will spend half a billion dollars to construct a huge, modular facility in southern Virginia.
Virginia Governor Bob McDonnell announced the Microsoft data center last Friday in a press release that boasted about winning the facility over competition from North Carolina and Texas. But the win also underscores the hoops that local governments must jump through to get the mere 50 new jobs that the facility is supposed to create.
"The company’s search process was long and competitive, and a great team of players came together to show Microsoft that Mecklenburg County was the right fit for its new version of a state-of-the-art data center," McDonnell said in a statement. "This project represents the largest investment project in the history of Southern Virginia."
Here’s what it took to bring Microsoft to the site near Boydton, Va.:
- A $2.1 million grant from the Governor’s Opportunity Fund.
- $4.8 million from the Virginia Tobacco Indemnification and Community Revitalization Commission.
- A promise of training from the Virginia Department of Business Assistance through the Virginia Jobs Investment Program.
Other major requirements by Microsoft were bandwidth and power from public-private partnerships and utilities. The Mid-Atlantic Broadband Cooperative is providing open access to its 800-mile fiber optic network that "will provide diverse fiber routes for connectivity to major carrier interconnection points in the Eastern United States," the release noted.
Meanwhile Dominion Virginia Power worked with Microsoft to assure the company of an "extremely reliable electric supply and competitively priced electricity from environmentally responsible generation sources." Dominion has access to electricity generated by a dam at Kerr Lake, which straddles the Virginia-North Carolina border only a few miles from Boydton.
Public officials in southern Virginia obviously hope that Microsoft’s decision to locate in Mecklenburg County will mark the first raindrops in a flood of high-tech jobs to the region. The county of nearly 32,000 people has slowly lost population this decade and only 12 percent have bachelor’s degrees or higher, compared to about 30 percent for the state as a whole, according to the U.S. Census Bureau.
"Microsoft’s decision to locate in Mecklenburg County is a huge investment in the area that will bring much needed economic activity and development to the region," said Delegate Terry Kilgore, chairman of the commission that provided the $4.8-million piece of the investment.
Virginia’s $7-million-plus investment could wind up buying some short-term construction contracts and 50 high-paying jobs, or it could spark the next Research Triangle Park, N.C. But some local economies are a lock to be stimulated by the Microsoft Gen4 data center project -- Silicon Valley and Round Rock, Texas. By resuming its spending spree on massive data centers, Microsoft will be buying custom servers from Hewlett-Packard and Dell, along with storage and networking gear aplenty.
Posted by Scott Bekker on September 01, 2010 at 5:55 AM0 comments
A lot of the 40-or-so Microsoft National Systems Integrators are companies with a presence across several U.S. regions. But as an announcement today by Sapient that it is expanding its presence in Bangalore, India, illustrates, some of them are super-national companies that haven’t quite reached the scope of a Microsoft Global Systems Integrator -- yet.
Sapient is a 20-year-old, Boston-based company with 7,822 employees and nearly $640 million in 2009 revenues that specializes in financial and government services. The Microsoft Gold Certified Partner firm has its own Microsoft Center of Excellence with 1,000 employees and Microsoft competencies in SOA and Business Process, Custom Development and Information Worker, according to the company Website.
The NASDAQ-listed firm has been growing fast. It was just ranked 45th in Fortune Magazine’s annual fastest-growing companies list and ranked second on the magazines list for profit growth. Second quarter revenues were up 36 percent year-over-year.
Sapient will nearly double the size of its Bangalore facility to about 100,000 square feet, an area which will include a fitness center and an expanded employee cafeteria. "The company plans to nearly double its workforce in Bangalore by the end of 2010, as well as continue expansion in its two other Indian markets: Gurgaon and Noida," Sapeint said in a statement.
The size of that workforce isn’t precisely spelled out, but Sapient’s Asia-Pacific delivery staff has been expanding rapidly over the past year. According to a document for investors, Sapient added 1,813 employees in the 12 months ending June 30. Of those, 395 were services delivery employees in North America, 74 were in Europe and 1,230 were in the Asia-Pacific region. Sapient also has Asia-Pacific offices in Singapore, Australia and China.
Of those Asia-Pacific offices, the Indian locations are clearly the most strategic to the firm’s multinational operations and employ the bulk of the Asia-Pacific staff. According to the company’s 10-K filed with the Securities and Exchange Commission in February, “During 2009 (the twelve months ended December 31, 2009), we continued to utilize our India-based effort on our Global Distributed Delivery (“GDD”) projects.
"Our proprietary GDD methodology enables us to provide high quality, cost-effective solutions under accelerated project schedules," the 10-K states. "By engaging India’s highly skilled technology specialists, we can provide services at lower total costs as well as offer a continuous delivery capability resulting from time differences between India and the countries we serve."
Posted by Scott Bekker on September 01, 2010 at 9:09 AM0 comments
The markets and the Fed aren't the only ones saying the recovery is slowing enough to cause concern. Warning signs are flashing all through the small business and IT markets.
The National Federation of Independent Business (NFIB) released results of its latest Index of Small Business Optimism on Tuesday. See the full PDF here.
The survey was conducted in July and the results don't show much optimism. The index lost 0.9 points in the July run compared to June for a reading of 88.1. According to the report's summary, "The persistence of Index readings below 90 is unprecedented in survey history." NFIB has been running the survey quarterly since 1973 and monthly since 1986.
"The performance of the economy is mediocre at best, given the extent of the decline over the past two years. Pent up demand should be immense but it is not triggering a rapid pickup in economic activity. Ninety percent of the decline this month resulted from deterioration in the outlook for business conditions in the next six months. Owners have no confidence that economic policies will 'fix' the economy," report authors William Dunkelberg and Holly Wade wrote.
Other findings from the survey are that hiring plans are historically weak, capital spending plans are near the record low set in December 2009 and profit trends are worsening.
Researchers at Ovum reported Tuesday that the number of contracts in the IT service sector increased in the second quarter -- but hold the applause there. Despite the 14 percent sequential increase in deals from 401 in Q1 to 457 in Q2, the total contract value (TCV) of those deals also fell by 14 percent to $30.8 billion.
In a statement, Ovum analyst Ed Thomas indicated that IT service providers dealing with the public sector were faring slightly better than their private-sector counterparts.
"Public sector demand remained steady, particularly in the U.S., which accounted for more than 90 percent of the market's quarterly TVC. This was good news for vendors with a major focus on the U.S. government sector, notably General Dynamics, Lockheed Martin and SAIC," Thomas said. "Concerns remain about the scale of outsourcing in the private sector, where TCV for Q2 slipped to only $10 billion as clients shied away from signing large deals."
In a report released earlier this month on worldwide IT spending, IDC reported that first half spending exceeded the analyst firm's expectations and raised spending forecasts for the full year to $1.51 trillion, a 6 percent increase over 2009. By segment, the forecasts are for hardware growth of 11 percent, software growth of 4 percent and services growth of 2 percent. However, the firm tempered its enthusiasm with concerns about the global economy.
"We stand in the middle of two powerful and opposing forces," wrote IDC analyst Stephen Minton. "On the one hand, the very real pent-up demand for new IT investment, which has driven the solid recovery in the first half of 2010 and which will hopefully continue into 2011. On the other hand, the potential loss of confidence in a global economy which remains extremely vulnerable to any further escalation of the European debt crisis or a deterioration in the U.S. stock market."
What are you seeing? Drop me a line at sbekker@1105media.com.
Posted by Scott Bekker on August 11, 2010 at 12:15 PM0 comments
Another Microsoft Worldwide Partner Conference is in the bag. Here are 11 key takeaways from the 2010 WPC:
1. Microsoft wants partners to be "all-in" on the cloud. Nearly everything was about cloud computing. That was a little weird for partners coming in from countries where BPOS and other offerings haven't rolled out yet, but pretty compelling for U.S. partners.
2. Keep an eye on the Windows Azure Appliance. The 900-server, private cloud enclosures are supposed to be coming this year from HP, Dell and Fujitsu -- extending Microsoft's cloud story.
3. Dynamics CRM Online. Margins jump to 40 percent in year one, and 6 percent recurring -- a huge bump from the old 18/6 mix. The offer is only guaranteed to be in place for a year. At the same time, partners are getting 250 Dynamics CRM Online seats for internal use.
4. Cloud Pack Essentials. A quick and dirty set of tools for partners to start moving their business onto the cloud.
5. Cloud Accelerate. A new badge to help born-on-the-cloud partners stand out.
6. Steve Ballmer seemed down. Kevin Turner was at the top of his aggressive game. Outgoing WPG CVP Allison Watson seemed wistful. New Worlwide Partner Group Corporate VP Jon Roskill was approachable.
7. Full speed ahead on the Microsoft Partner Network. New channel chief Roskill has no plans to pause the implementation. New benefits and requirements go online in October, barring technical complications.
8. Gold is back, sort of. The new Gold Certified Partner level will be out when MPN goes into full effect, but the Competencies and Advanced Competencies have been renamed Silver Competencies and Gold Competencies.
9. Microsoft is eyeing MSPs. With Windows InTune and future scaled-down Azure appliances, Microsoft is paying attention to the managed service provider market.
10. The heavy layoffs just ahead of WPC caused scheduling turmoil for partners and vendors, many of whose contacts were suddenly gone.
11. Nonetheless, partner enthusiasm was pretty high, with many partners telling us Microsoft seemed to have its mojo back. Partner attendance was huge at a reported 9,300 out of about 14,000 total attendees.
Posted by Scott Bekker on July 19, 2010 at 2:06 PM0 comments
One of the key themes Microsoft will hammer out at its Worldwide Partner Conference next week will be the opportunity to develop and sell solutions based on the new Windows Phone 7 platform for smartphones. The latest data from comScore Inc, a Reston, Va.-based firm dedicated to measuring digital usage trends, doesn’t help Microsoft’s pitch to partners.
ComScore on Thursday reported figures for total U.S. smartphone subscribers in May that show Microsoft, Apple, Research in Motion (RIM) and Palm all losing share to Google compared to February, the last time comScore released its metric. Microsoft’s loss of nearly two points of share was the steepest drop. The Google Android platform’s gain of four percentage points was both the largest change in absolute terms and the only positive movement among major players. Other losses of share in percentage points were Apple (-1.0), Palm (-0.6) and RIM (-0.4).
Overall percentage share for May was 41.7 percent for Blackberry-maker RIM, 24.4 percent for Apple, 13.2 percent for Microsoft, 13.0 percent for Google and 4.8 percent for Palm.
Coming as they did in May, the figures reflect neither Apple’s iPhone 4 problems, nor Microsoft’s Kin cancellation. The figures show Microsoft is severely struggling against Google, hanging onto a 0.2 percent lead in market share with all the momentum trending toward the Android platform. In November 2009, Microsoft’s share was 19.1 percent to Google’s 3.8 percent, according to comScore (a year before that, Android had no share as Google had yet to deliver it). Granted, much of Microsoft's sharp decline in share could be the fact that the existing Windows Mobile 6.x won't be compatible with Windows Phone 7, thereby further eroding the appeal of the company's existing platform.
Nevertheless, Microsoft's poor showing further pressures the company to deliver not only a hit, but a grand slam, with the Windows Phone 7. Are you waiting to see what Microsoft delivers for partners in Windows Phone 7, or are you moving the mobile aspects of your business to other platforms? Let me know at sbekker@rcpmag.com.
Posted by Scott Bekker on July 09, 2010 at 8:17 AM0 comments
Microsoft released its annual list of Partner of the Year Award winners Wednesday. This year’s list features more winners than in the past from among Microsoft’s 390,000-member community of Gold Certified, Certified and Registered Member partners.
A new category this year is Partner of the Year at the country level. For the United States, that honor goes to Slalom Consulting, an 800-person National Systems Integrator based in Seattle. Slalom was also named Business Intelligence Partner of the Year and Information Worker Solutions, Collaboration Partner of the Year. Avanade, the global consulting agency that got its start with a joint investment from Accenture and Microsoft, also cleaned up in the 2010 awards. The U.S. unit won three awards and the U.K. unit won another award.
The awards will be presented at this year's Microsoft Wordwide Partners Conference (WPC) in Washington, D.C., next month. We’ll provide more in-depth coverage of the awards in our August issue. But for now, you can see the complete list on Microsoft’s site.
Any feedback on the categories and choices for the Partner of the Year awards? Let me know at sbekker@rcpmag.com.
Posted by Scott Bekker on June 23, 2010 at 8:16 AM0 comments
The IAMCP, which now stands for the International Association of Microsoft Channel Partners, is coming off its first national meeting, held last month in regional offices and remotely throughout the country. The gathering featured a keynote from Cindy Bates, Microsoft vice president of U.S. Partner Strategy. As one of the top two Microsoft partner executives nationally, the Bates keynote was a good vote of confidence for the IAMCP's first national event where my colleague Jeff Schwartz attended the New York presentation (see his report).
Similarly, the New York IAMCP chapter landed a keynote from Microsoft Chief Operating Officer Kevin Turner last October. That's an impressive amount of love from one of Microsoft CEO Steve Ballmer's direct reports.
Meanwhile, the Microsoft Worldwide Partner Group has been heavily engaged with the Washington, D.C. chapter of the IAMCP in planning for the Worldwide Partner Conference there in July.
Now the IAMCP is announcing a new engagement model with Microsoft's U.S. Partner Group. In the U.S. IAMCP May newsletter that went out June 3, the organization announced, "The Microsoft U.S. Partner Team will be launching a new IAMCP engagement model framework outlining prescriptive guidance on how Microsoft will support IAMCP chapters across the US."
The engagement model will come in two tiers. Ten of the 35 chapters of the U.S. IAMCP will get what is called Core Coverage, under which they will be assigned a Microsoft Engagement Team. The team consists of an Area Partner Territory Manager, a Local Engagement Team Business Development Manager and one Field SMB Marketing Manager.
The other 25 U.S. chapters will get Extended Coverage, which will involve a smaller Microsoft Engagement Team – an Area Partner Territory Manager and an SMB Marketing Manager – working with the three IAMCP regional leads. The regional leads are Howard Cohen, Eastern Region; Richard Losciale, Central Region; and Marc Hoppers, Western Region. According to the IAMCP newsletter statement, the extended coverage will have "an emphasis on communications support over in-person meetings and presentations."
Cohen, who is also the Communications Chair for the U.S. IAMCP Board, said in an interview that IAMCP will choose which 10 chapters qualify for core coverage. "It's a combination of proximity to a Microsoft office and the size and resourcefulness of the chapters," Cohen said. Those decisions will be made sometime before the Microsoft-IAMCP engagement model launches next quarter.
The new model arose from a mutually recognized reduction in field engagement between IAMCP and Microsoft that started about 18 months ago, when the recession was at its worst.
"Up until about a year and a half ago, field engagement was terrific. In addition to the PAMs managing managed partners, there was a Partner Community Manager working with the IAMCP chapter, as well as Area Sales Managers," Cohen said.
"Over the last year and a half, all of those people who were partner-facing were really turned customer-facing," he added. "It became more and more difficult to do fundamental things, to work with Microsoft tactically to get things done. Even for the IAMCP chapter, which was usually the alternative that people would turn to when they couldn't get traction with Microsoft, it was even difficult for us to get traction.".
The problems weren't universal to all geographies, and the IAMCP began discussions with Microsoft several months ago in a project called Consistent Touch, Cohen said.
"We're very happy about this. This is a real recognition that the relationship that we worked for over the years has really worked and is really delivering results for our members," Cohen said.
There's been a lot of concern among partners that the new Microsoft Partner Network (MPN) favors large partners with dozens of engineers at the expense of the smaller shops that make up the bulk of Microsoft's massive channel. Of special concern is the MPN requirement effective in October that employees certified to qualify a company for an Advanced Competency can not be used to qualify the company for any other Advanced Competencies.
The increased engagement with IAMCP, and the attention to the partners of all sizes that the organization represents, is a solid step on Microsoft's part to do right by its partner community. It also means that if you're feeling frustrated by your interactions, or lack thereof, with Microsoft, it may be a good time to join the IAMCP.
As for the name, the IAMCP has long been known as the International Association of Microsoft Certified Partners. The word Certified is now officially outdated as the Certified and Gold Certified levels of the Microsoft Partner Program officially switch off when the MPN goes fully live in October. While the organization's legal name "IAMCP," is unaffected, the group has changed its logo and Website references from "Certified" to "Channel."
Posted by Scott Bekker on June 03, 2010 at 10:09 AM0 comments
Microsoft is bringing back its popular Big Easy promotion for the month of June in an end-of-year push to increase revenues for Windows Server 2008 R2, Exchange 2010 and Office 2010.
The latest version is called Big Easy 4.1. The idea of the promotion is to enable solution sales by offering increasing rebates to customers when they buy Microsoft products from different product groups. The more groups customers purchase products from, the higher their rebate.
The best part about the rebates is that they’re made out to the partner of the customer’s choice. The rebate lasts for 90 days and can be used for hardware, software or services. I’ve got a lot more detail in a news story about it here I’ll also be moderating a Webcast with some Microsoft executives and a partner June 3 at 11 a.m. PT. You can register here.
Posted by Scott Bekker on June 02, 2010 at 8:47 AM0 comments
The slow rollout of the new Microsoft Partner Network passed a milestone today with the launch of the new competency structure and the new Action Packs.
Any partner with a Microsoft competency and specialization under the old system was supposed to be automatically transitioned into a new competency, with an e-mail notification. For some partners, the new competency name won't be much of a change. For example, the Security Solutions competency with a specialization in Identity & Secure Access will now go by the competency name Identity and Security. The ISV competency goes to, wait for it, ISV. For others, though, the new competency name is a lot different. Partners with the competency/specialization combo of Information Worker Solutions/Office Solutions Development are now in the Portals and Collaboration competency.
Even for those with big changes in the name of their competency, the difference is purely between Microsoft and partners for now. All competency benefits stay the same until a wider set of changes in October. Similarly, partners are supposed to continue using their previous competency logos for now, as well.
The really controversial changes to the competency structure occur in October. At the same time as new benefits are launched, Microsoft will introduce the advanced competency structure. Small- to mid-size partners have been especially concerned about those changes, which will eliminate the Gold Certified Partner level and will require partners to have unique engineers dedicated to each competency for the advanced level. For example, a partner looking to get an advanced competency in both Business Intelligence and Data Platform won't be able to share engineers for both competencies. Not a big deal for the Avanades of the world, but a gating factor for five-to-20-person partner shops.
Also today, new subscription programs go into effect. Microsoft is ending the current Microsoft Action Pack Subscription (MAPS), a massive program with a huge and mostly adoring fan base. As of today, there are two new versions of the Action Pack: The Action Pack Solution Provider subscription and the Action Pack Development and Design subscription. Microsoft is also ending the much smaller but also highly regarded Empower for ISV programs.
Posted by Scott Bekker on May 24, 2010 at 9:23 AM0 comments
A shout out to our sister publication for government IT consultants, Washington Technology, which ran a piece this month about the famous Los Angeles-Google deal. Writer David Hubler goes into a lot of depth about Computer Sciences Corp.'s role, partnering with Google to implement the messaging system. The system is eventually supposed to cover 30,000 public employees. If the implementation is a success, it will be another major case study supporting a cloud mail system, as opposed to on-premise, like Microsoft Exchange, IBM Lotus or Novell GroupWise, which is the system the Google setup will replace. Of course, if it doesn't work properly...
Posted by Scott Bekker on May 24, 2010 at 2:50 PM0 comments
Big Blue made a major customer acquisition move today in buying Sterling Commerce, according to an analyst. IBM is buying the Dublin, Ohio-based electronic data interchange (EDI) software company from AT&T for $1.4 billion. Analyst Ray Wang told RCP's Jeffrey Schwartz that by processing large volumes of transactions between B2B trading partners, Sterling actually brings IBM a lot of high-value customers among large banks, telcos and retailers.
Posted by Scott Bekker on May 24, 2010 at 2:54 PM0 comments
Former high-ranking Microsoft executive Maria Martinez has landed at Microsoft's archrival in the cloud CRM space, Salesforce.com, less than a year after she retired from Microsoft.
Martinez was announced Wednesday as executive vice president of Customers for Life, Salesforce.com's department dedicated, obviously enough, to customer retention. She'll report to Frank van Veenendaal, president of worldwide sales and services.
Martinez left Microsoft last July as corporate vice president of Microsoft Services, a position of special interest to large Microsoft partners. That role at Microsoft sets the company's services strategies, including how aggressively or gently Microsoft treats partners when going after consulting service business. The Microsoft post's responsibilities include management of Microsoft Consulting Services.
Microsoft filled Martinez' post immediately with Kathleen Hogan, who began her Microsoft career in 2003 in the partner-facing role of vice president of Customer and Partner Experience. Prior to joining Microsoft, Hogan was a partner at McKinsey & Co. in Silicon Valley and worked at Oracle Corp.
Martinez joins a company that is a poster child for cloud computing businesses and has enjoyed surging revenues, even during the recession. Salesforce.com first cracked the $1 billion in revenues mark in its 2009 fiscal year, which ended in January 2009, and reported revenue growth of 21 percent for fiscal year 2010 -- reaching $1.3 billion in revenues.
Those revenues are probably only slightly less than Microsoft's revenues across the entire Microsoft Dynamics line -- which includes not only cloud CRM but on-premise CRM and several lines of on-premise ERP (Microsoft bundles Dynamics revenues in with Office revenues in its financial statements, making direct comparisons difficult). But Microsoft isn't enjoying anywhere near the growth in business applications that Salesforce.com is reporting. For the nine months of Microsoft's current fiscal year, the company reported that its Dynamics revenues were down 1 percent.
Posted by Scott Bekker on May 06, 2010 at 11:13 AM0 comments