Big Changes Afoot for Microsoft Partners

Time will tell whether the reshuffling of responsibilities between soon-to-be former Channel-chief Allison Watson and her successor, Jon Roskill was a chance to allow both execs to broaden their careers and put new blood into their respective organizations or whether there are more pronounced changes in the works to the way Microsoft goes to market with its partners.

It's hard to be shocked that after nearly seven years Watson is moving to a new role. That's the Microsoft way and anyone who follows the company knows it frequently shuffles execs. By many accounts, Watson was overdue for such a change.

The move caught many partners and even those inside Microsoft off guard --just a few weeks before Microsoft's Worldwide Partner Conference.

"The new fiscal year is a week away, and that means kicking off and executing the 2011 marketing campaigns and Allison's new role will play an important role there," Directions on analyst Paul DeGroot suspects. "Microsoft's global sales meeting usually happens a week or two after the partner conference, so she'll be getting worldwide visibility right away."

Watson's move as corporate VP for Microsoft's Business and Marketing Organization (BMO) should not be viewed as a kick upstairs, DeGroot added. "BMO is a pretty critical part of Microsoft's sales organization, so leading the U.S. BMO is by no means a trivial role or a sideways move," DeGroot said. "Maybe they are grooming her for future roles in the corporate mainstream."

By most accounts, Watson was well regarded in the partner community. "Allison truly has supported our group and we were very happy to have the opportunity to work with her," said Kerry Gerontianos, president and CEO of  Incremax Technologies Corp. and the IAMCP's national president. "The most rational explanation for the change is she's been there awhile."

Now it is unclear whether she will share the keynote stage with her successor or will cede it to him. The message of course is that the two will work together. Watson said as much in a blog posting yesterday.

"As I shift into my new role, one thing that will not waiver is my passionate dedication to partners," Watson noted. "My commitment to strengthening and evolving our engagement, and the collective learning you've imparted will be a toolset I will continue to employ. Jon and I are eager to hear from you about how we can best serve Microsoft's partners and customers."

Yet if she knew this was coming as recently as two weeks ago, she held it close to the vest. In fact she spent nearly an hour just two weeks ago talking to myself and Redmond Channel Partner editor-in-chief Scott Bekker, outlining the importance that partners follow Microsoft to the cloud, which was to be the basis of her keynote at WPC.

"Microsoft is 'all in' but we haven't really been telling everyone what 'all in' is yet," she told us. "In a comprehensive way, that's obviously a major goal for WPC. And the roadmap is becoming very fleshed out during the course of the next 12 months."

How partners should follow Microsoft to the cloud will surely remain the theme of WPC (stay tuned for the July RCP cover story), still lots of questions loom. Perhaps the most significant is what this will mean for Julie Bennani, general manager of Microsoft's Worldwide Partner Group. Bennani is architect of the new Microsoft Partner Network.

Many channel partners are concerned about what the new certification rules will mean to them, particularly smaller ones. Under the new rules, as I reported, there will be no double dipping, but partners are hoping Microsoft will make exceptions.

While it appears the new rules are pegged at those that latch onto a certification without committing enough to those product lines, others argue the collateral damage can hurt those partners who can't afford to hire additional engineers, yet those they have are skilled in multiple disciplines.

"If they want to make bigger changes to MPN, they could use this re-organization as an excuse for a delay," suggests Howard Cohen, regional chairman of the International Association of Microsoft Channel Partners (IAMCP).

Also it remains to be seen what this will mean to Pam Salzer, Microsoft's Senior Director of Worldwide Partner Marketing. Many are bracing for additional personnel moves at some level in the coming days and weeks.

What's your take on all these changes? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on June 25, 2010 at 11:59 AM0 comments

Microsoft Talks Up Cloud Security

Microsoft may be "all-in" the cloud. But if it can't convince the world that its services are secure, it could be all-out. That may explain why Microsoft is talking up cloud security these days.

Joel Sider, a senior product manager for identity and security for Microsoft's Forefront business, reiterated Microsoft's Trustworthy Computing initiatives in a blog posting this week. "We strive to be more transparent than anyone about how we help enable more secure cloud computing," Sider wrote.

Last week, Microsoft released a comprehensive update of its Security Development Lifecycle (SDL) best practices, particularly targeted at .NET developers building apps that will run in the cloud.

"We're putting renewed effort into communicating all of our efforts to help customers and partners think thru cloud security in the right way," Sider added in an e-mail. But as I reported this month, how do you really know what's behind the curtain of any provider's cloud services?

While many cloud providers comply with such standards as SAS 70, ISO 27001, PCI and COBIT, there is no common way for them to disseminate information to partners and customers. Hence, that visibility is lacking today.

There are efforts in the works to resolve this lack of clarity. Of particular note is CloudAudit, which seeks to develop standards for how cloud providers release information to prospective and existing enterprise clients that can satisfy specific compliances and internal governance requirements.

CloudAudit uses the recently released Cloud Security Alliance (CSA) Cloud Controls Matrix -- a framework that consists of 98 controls that specify how cloud providers should release detailed guidelines on how services are audited and risk is determined.

Among those participating are Amazon, Google, Microsoft, Unisys and Rackspace, though it remains to be seen if those and other players ultimately implement the CloudAudit specs. But it is an effort worth watching. If CloudAudit is widely adopted, it could remove one barrier to cloud computing.

What do you think? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on June 23, 2010 at 11:59 AM0 comments

Bill Clinton to Keynote at WPC

Former president Bill Clinton will be making a keynote address at Microsoft's Worldwide Partner Conference in Washington, DC., Microsoft announced yesterday.

Clinton, who formed and runs the William J. Clinton Foundation, "with the mission to strengthen the capacity of people in the United States and throughout the world to meet the challenges of global interdependence," will be among several heavy hitters scheduled to speak at WPC.

Among others on the revamped agenda scheduled to speak include Microsoft CEO Steve Ballmer and group presidents Kevin Turner, Stephen Elop and Bob Muglia.

Of course, headlining WPC will be Microsoft's channel chief, Allison Watson, corporate vice president of the Microsoft Worldwide Partner Group, who will spell out the implications of Microsoft's "all-in" cloud emphasis and what that means to partners.

The Clinton keynote, called "Embracing our Common Humanity," is slated for Wednesday July 14th. The other humanitarian named Bill, Bill Gates, Microsoft's founder and chairman-turned-humanitarian, is not scheduled to appear at WPC.

Posted by Jeffrey Schwartz on June 16, 2010 at 11:59 AM0 comments

New Desktop Virtualization Licensing Looms

Microsoft is talking up application virtualization and there are some new technology, partnering and licensing considerations on the horizon. Also in its battle against VMware, look for Citrix and Microsoft to act as true partners-in-crime to take on the cause for desktop application virtualization.

First, in case you haven't heard, effective July 1, those customers who don't qualify for Windows Client Software Assurance will require a new license called Windows Virtual Desktop Access, or Windows VDA. According to a posting on Microsoft's site, the company came up with Windows VDA to allow organizations to license virtual copies of Windows in virtual environments for devices that don't qualify for Windows client SA such as third-party contractor PCs and thin clients, among others.

Windows VDA is a device-based subscription license that will cost $100 per device per year. "It will allow organizations to create multiple desktops dynamically, enable user access to multiple virtual machines (VMs) simultaneously and move desktop VMs across multiple platforms, especially in load-balancing and disaster recovery situations," Microsoft says.

What's the benefit of that added cost? Among other things, Microsoft says it will allow users to run Windows in a data center including Enterprise editions, rights for a primary user to access corporate VDI desktops from non-corporate PCs including home systems and kiosks and access rights for up to four VMs, concurrently. It will also support unlimited mobility of VMs between servers and storage and unlimited backups of VMs, according to Microsoft.

At a time when Windows 7 sales appear to be going through the roof, Microsoft appears to be making a strong push toward desktop virtualization even as it may cannibalize future Windows licensing.

To strengthen its portfolio, Microsoft is working closely with longtime partner Citrix to take on the larger behemoth -- VMware. Brad Anderson, who oversees Microsoft's virtualization efforts, gave a keynote address at Citrix's annual Synergy conference earlier this month following Citrix launch of the first bare-metal client hypervisor..

Following Anderson's keynote, he and Citrix CTO Simon Crosby posted a recorded video conversation between the two where he talked up what Microsoft has in store on the App-V front.

"With application virtualization, what we're doing is taking all the assets, all the experience from the desktop, applying it to the server, and this will be released in conjunction with the next version of System Center in 2011," Anderson said. "Think about this as being embedded into virtual machine manager that gives you the ability to separate out your existing applications, so that you can actually have that separation of the app and the OS and dramatically reduce your number of operating system images."

One of the things Anderson demonstrated in his keynote was the next version of System Center Virtual Machine Manager making Xen Server a first class citizen. "The integration is definitely there," Anderson said.

Added Crosby: "So you can drag and drop a multi tier app from Xen App and Xen desktop, which has tons of components, and just magically shows up. One cool use case: once you've done all this virtualization, it's a good way to deploy things into the cloud, so I can then take an app that I've virtualized and pop it up into Azure."

What's your take on the new VDA licensing? If you're a Microsoft partner are you looking more closely at Citrix's XenSource platform and the new bare-metal hyper-visor the company announced? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on May 28, 2010 at 11:59 AM1 comments

Some Partners Unsure About Microsoft Partner Network Changes

Not feeling all that prepared for the forthcoming changes in the Microsoft Partner Network? You're not alone.

According to a poll of a small but very influential group of partners, only 29 percent said they feel very aware of the changes and requirements in the Microsoft Partner Network, while 58 percent are somewhat aware and 12 percent are either unsure or not aware. Meanwhile, 38 percent say they are not familiar what they have to do to prepare for the changes, while 46 percent said they were somewhat prepared. Only 15 percent feel very prepared.

These stats and others were gathered at last week's first-ever national meeting of the U.S. chapter of the International  Association of Microsoft Certified Partners (IACMP), where I reported Microsoft's effort to extol the virtues of its move to the cloud and the uneasiness that partners are experiencing.

During the event, which included live meetings around the country and attendees who logged into a Webcast, Microsoft polled the audience to get their feelings on MPN.

While only 26 attendees weighed in, only members of IAMCP were invited and these are influential Microsoft partners. So you may choose to take these numbers with a grain of salt but they are at least an indicator of how some key partners feel.

We’d like to hear from more of you. Please let us know what level of awareness and readiness you have for the forthcoming changes in MPN. Drop me a line at [email protected].

Posted by Jeffrey Schwartz on May 26, 2010 at 11:59 AM0 comments

Are You Ready for MPN?

The International Association of Microsoft Certified Partners held its first-ever national meeting yesterday where the forthcoming new Microsoft Partner Network (MPN), the Worldwide Partner Conference (WPC) and Microsoft's emphasis on the shift to cloud computing were front-and center.

Nearly 1,000 partner firms are members of IAMCP. The goal of yesterday's held event was to reinforce the IAMCP's mandate that partners should network with one another and create relationships by which they go to market together in areas where their skills are complimentary.

"We see an opportunity to really help you gain more information and connections to grow your business," said Cindy Bates, VP of Microsoft's U.S. Partner Strategy, who was the keynote speaker. Bates used her pulpit to talk up MPN -- launched at last year's WPC but set for some key changes to be rolled out this year. For a deep dive on the MPN see Scott Bekker's full report.

As far as many partners are concerned, MPN spells uncertainty. Approximately 60 to 70 percent of the IAMCP are now Gold Certified Partners, said Kerry Gerontianos, president and CEO of New York-based Incremax Technologies and president of the U.S. IAMCP, in an interview following the presentation. That's because it is unclear how those partners will rank under the new structure, which looks to create an advanced certification for some of Microsoft's largest partners.

Gerontianos, who hosted the event at Microsoft's New York City office, talked to me about satisfaction with MPN so far by IAMCP members. "I would say it's mixed," he said. "I think there is a lot of concern about MPN." While Bates did little to address how partners may be affected down the road, she did tell the several hundred in attendance that she considers IAMCP an important constituency.

"IAMCP and its very impressive partner community is closely and strategically aligned with Microsoft and, in our view, is one of the most [important] communities in the industry, fostering and facilitating partner-to-partner connections," Bates said.  "I have seen first-hand how partners have increased revenue as a result of p-to-p networking, identifying new customer opportunities through point solution delivery, expanding geographical reach or increasing capabilities through partnerships."

Of course those are mere platitudes to those partners that may find themselves having to invest in further certifications or losing their existing status. To its credit, the IAMCP is pushing hard for Microsoft to take the needs of smaller but high-revenue producing partners into consideration when rolling out MPN. How that will play out remains to be seen.

What's your take on MPN? How do you see it affecting you? And how does Microsoft's "we're-all-in" the cloud emphasis potentially impact your business moving forward? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on May 20, 2010 at 11:59 AM2 comments

CardSpace 2.0 Headed for the Heap?

Active Directory Federation Services 2.0 is now shipping but Microsoft postponed the release of CardSpace 2.0, putting its future in doubt.

The current CardSpace is built into Windows 7 and Vista but it doesn't appear that it is widely used. Perhaps that's why Microsoft quietly announced that it was putting on hold the next version, CardSpace 2.0, which was to provide a common user-interface for managing multiple logins.

CardSpace 2.0, which had been in beta since last year, supports ADFS 2.0 and includes support for the Windows Identity Foundation. To address the lack of an updated Information Card, in the new ADFS 2.0, Microsoft next month is expected to release a Community Technology Preview of an add-on to ADFS 2.0 that will enable Windows Server to issue InfoCards.

It appears that Microsoft shifted gears in March with the release of its U-Prove information identifier at the RSA Conference when Scott Charney, Microsoft's corporate vice president of Trustworthy Computing, launched the CTP of the company's U-Prove technology.

U-Prove centers on the issuance of digital tokens that allow users to control how much information is shared with the recipient of the token. Used against ADFS 2.0, U-Prove lets users federate identities to across trusted domains. Microsoft released U-Prove under its Open Specification Promise and also donated two reference toolkits for implementing the algorithms under the Free BSD License.

Moreover, Microsoft released a second specification under its OSP for integrating U-Prove into open-source identity selectors. How that will play out, in terms of whether the .NET and open-source communities embrace U-Prove, remains to be seen.

But that has many people wondering if there's any future for CardSpace 2.0 and if U-Prove will prove, pardon the pun, to be a viable replacement. "There's certainly support for information cards; our involvement in information cards is alive and well," said  Joel Sider, a senior product manager in Microsoft's Forefront security group, in an interview yesterday. Microsoft is not saying when it will update its CardsSpace 2.0 plans, but some are wondering whether the technology has a future.

CardSpace 2.0’s uncertain fate is "no surprise given its limited adoption," said Patrick Harding, CTO of Denver-based Ping Identity, a Microsoft partner and competitor. "Unfortunately, it has also really upset all of those people and companies that have bought into the InfoCard model at Microsoft's urging."

What's your take on the CardSpace 2.0 situation? Have you looked at U-Prove? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on May 06, 2010 at 11:59 AM0 comments

HP with Palm Reshapes Mobile Landscape

About 10 days ago, I broke down and bought a Palm Pre Plus for a mere $49. The few people I've told have given me blank stares. I love the gesture-based interface and the way the device works. An added bonus was the free mobile hotspot built into the device that I can use to connect my netbook while on the road. I've been reluctant to reveal my purchase because I have 20 days left to return it to Verizon should I conclude it's a dud.

While I have been on the fence, HP announced yesterday that it has agreed to acquire Palm Inc. for $1.2 billion. This leaves me thinking Palm's webOS has a much brighter future. Here's why: The biggest knock against webOS and the Pre is its lack of apps. That has been the source of my dilemma -- not the device itself.

Only 2,000 are in Palm's App Catalog compared to 200,000 or more in Apple's iTunes App Store. Making matters worse, sales of Palm-based devices are nimble, in part because developers have taken a pass on webOS in favor of Apple's iPhone and Google's Android platform.

IDC said in a research note yesterday that it believes Google's Android platform will be number two behind Nokia's Symbian platform. As everyone knows, Apple iPhones and iPads are selling like hotcakes. Then there's the BlackBerry brand and devices based on Microsoft's Windows Mobile coming out this fall.

So where does that leave Palm and webOS? Until HP came to the rescue, the future was looking bleak, despite what I think is a superior platform and user interface to Android and BlackBerry. Windows Phone 7 is a dark horse with a lot of potential, but the jury is still out. If I end up disappointed with my Palm Pre, I wouldn't rule out settling with a Windows Phone 7 or an iPhone, as an alternative. But I have no intention of leaving Verizon and neither are an alternative at this time.

The good news for webOS is that HP plans to invest significantly in both sales and marketing as well as in its developer eco system, said Tom Bradley, executive vice president of HP's personal systems group, speaking on a call to investors that was webcast. Bradley also sees extending webOS to other form factors and using its vast channel and retail presence to reach customers -- both enterprise and consumers.

"Our breadth of products between smart phones, slate and potentially netbooks represents an enormous opportunity for our customers," he said. While he declined to elaborate, the Web site CrunchGear posted five devices it envisions HP developing with webOS.

Bradley also is well aware he needs to get developers as excited about webOS as they are about Android and the iPhone, and indicated he's up for the challenge. "We believe this is a very, very early stage market. I think the developer community will very aggressively, as we invest and provide support, begin to develop that suite of applications for webOS that will make it even more compelling than it is today," Bradley said.

Indeed, HP has the means to quickly give a boost to the webOS developer eco system, said Jeffrey McManus, CEO of Platform Associates, in a brief e-mail exchange. McManus, who has given talks in the past on how to develop apps for the iPhone, was among the first to purchase the Pre when it came out last year.

"I'm confident that HP will be a great steward of Palm's webOS platform, which is still the most compelling mobile platform in existence today, particularly from a developer perspective," McManus said.  "It gives developers the ability to build native mobile applications using the same tools and technologies they already use to build ordinary Web sites today (HTML, CSS and Javascript). And WebOS will become even more compelling as HP brings it to more devices, including the Slate (which I'd expect them to do fairly soon)."

Still, IDC and others say the move could strain HP's relationship with Microsoft, whose CEO Steve Ballmer showcased HP's forthcoming Windows 7-based Slate tablet device at the Consumer Electronics Show in January. It also suggests HP's move into the smart phone market will come at the expense of Windows Phone 7, though Bradley was coy as to whether it will have a multi-platform smart phone and tablet strategy -- or emphasis.

Let's not forget that Bradley's successor at Palm, Ed Colligan, licensed Windows Mobile for the Palm Treo, in a widely publicized event with Microsoft chairman Bill Gates. It represented the first non-PalmOS-based platform the company added and, at the time, a key vehicle for Windows Mobile (in 2005 the Treo was the only major smart phone on the market besides the BlackBerry). That had mixed results for both companies, and I guess we'll find out how Bradley might handle Windows Phone 7.

Bradley insisted HP will continue to work closely with Microsoft. "We clearly believe in choice," he said. "We intend to continue to be a strategic partner for Microsoft, they are a huge piece of our business today and will continue to be so."

Still, there are reasons to be skeptical. As analyst Rob Enderle pointed out in a blog posting, HP has a history of missteps in the mobile market. "Palm and HP have both made runs at matching Apple in the past, and fallen flat on their faces," Enderle noted. "But the two companies’ combined resources might be just the secret sauce needed to stand tall beside Cupertino’s Goliath."

Michael Gartenberg, an analyst at Altimeter Group, agreed. "HP is now a force to be reckoned with in the mobile space," Gartenberg said in a blog post. "The combination of Palm technology and brand combined with HP resources and channel partners will be a strong combination for HP to drive their mobile efforts forward."

Having bought my first 3Com PalmPilot 3x in 1999 and a longtime user of the Treo, it bares noting that what's left of Palm is the company's name and heritage. The Palm Pre and webOS are very different platforms, but in my opinion, it is the only platform that currently rivals the iPhone and Droid.

A year ago I asked: Will Palm Get its 'MoJo' Back with webOS and Pre? Things certainly went down a different path than the company and many of its investors and supporters had envisioned and hoped.

With HP agreeing to acquire Palm (and let's not forget the deal could fall through, or another suitor could come along with a better bid), I agree with McManus. The future of webOS is looking brighter. But the question remains: will HP get its mojo back in the mobile market? It's too early to say but as I pointed out yesterday, it is quite ironic that Palm will once again be reunited with its former CEO Bradley, with 3Com and will be under the same roof as the once iconic iPaq. Presuming Jon Rubenstein, the key developer of the Apple iPod, and his team stick around, some interesting things can happen.

I still haven't decided whether I will keep my Pre but I am more inclined to hold onto it than I was yesterday at this time. What's your take on HP's move? If you're a developer, are you more inclined to look at webOS? Should I keep or return my Palm Pre? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on April 29, 2010 at 11:59 AM2 comments

Will ADFS 2.0 Boost Cloud Security?

The pending release of Microsoft's Active Directory Federation Services (ADFS) 2.0 is expected to play a key role in simplifying how organizations provide access control to systems and applications, including those running in the cloud.

Microsoft is expected to release ADFS 2.0, the free Windows 2008 Server add-in to Active Directory, this week, as reported. ADFS 2.0 provides claims-based authentication to applications developed with Microsoft's recently released Windows Identity Foundation (WIF).

While ADFS 2.0 give single sign-on to .NET applications built-in WIF and systems running Windows 2008 Server instances, it also extends that authentication to Microsoft's Windows Azure cloud service. But just as important, it provides single sign-on to Windows applications running on other cloud-based services, said Jackson Shaw, Quest Software's senior director of product management.

"ADFS 2.0 is really going to shed the spotlight on federation and cloud services and that's something the industry can use," Shaw said, in a telephone interview from the company's TEC 2010 conference in Los Angeles. "You can put an ADFS 2.0 instance up and use it to connect directly to Google or It's fairly straightforward."

Key to ADFS 2.0 is its support for the Security Assertion Markup Language 2.0 (SAML) standard, which is widely supported by cloud providers and ISVs. By allowing Windows and .NET apps to make and exchange SAML-based authentication claims, that removes a key barrier.

While Shaw sees ADFS 2.0 as a key step forward toward improving cloud security, he cautioned it's not a panacea. "Not every single piece of information about what someone can or can't do is stored in Active Directory," Shaw said. "There may be something about my spending authority in the SAP system, for example. What that means is it forces a customer to synchronize more info into Active Directory."

The problem, he explained, is customers may not want to always do that."That's part of the evolution of cloud services we have to go through, and that's why I am excited about ADFS 2.0, because as more and more customers start to use this, these types of difficulties are going to be surfaced," Shaw said.

Not lost on him of course, is the opportunity that presents for third parties like Quest, Ping Identity, Symplify, CA, Novell and others to offer tools to remediate some of these issues.

Keynoting at this year's TEC 2010 was Conrad Bayer, Microsoft's general manger for Identity and Access solutions. Shaw, who attended the keynote, shared a few observations:

  • Directory technologies have all been brought together into one group at Microsoft, which Bayer will oversee. That includes ADFS, Forefront Identity Manager and Rights Management Server. "This is definitely a step in the right direction from the perspective of actual integration across the product line and hopefully some proper integration with Active Directory," Shaw said in a blog posting released just after we spoke.
  • When Bayer polled the audience to see how many were using AFDS, very few raised their hands. "I believe this will change once ADFS v2.0 releases later this year - since ADFS is basically free," Shaw noted.
  • Cardspace 2.0 is not ready, Bayer confirmed. "It doesn't go away but it isn't imminent to be released either," noted Shaw. "They want to add OpenID support and they are working on that along with incorporating it into Internet Explorer."

Are you looking to use ADFS 2.0 in your organization or for your clients?  Drop me a line at [email protected]

Posted by Jeffrey Schwartz on April 26, 2010 at 11:59 AM5 comments

Inside Microsoft's Private Cloud

I had the opportunity this week to see Microsoft's portable data centers, which the company showcased here in New York.

In honor of Earth Day, I thought it would be fitting to describe what Microsoft is showcasing because it does portend its vision for the next generation data centers that have self-cooling systems and servers that don't require fans.

Microsoft first demonstrated the portable data centers at its Professional Developers Conference back in November in concert with the launch of Windows Azure. It gained further prominence last month when Microsoft CEO Steve Ballmer made his "we're all in the cloud" proclamation at the University of Washington with these huge units in tow. The one I saw in New York was 20-feet long by seven feet wide but Microsoft also has one that stretches 40 feet.

These portable data centers, which are designed to be housed outdoors, are packed with loads of racks, blade servers, load balancers, controllers, switches and storage all riding on top of Windows Azure and Microsoft's latest systems management and virtualization technology.

But they also have self-cooling systems that suck the hot air out of the servers and use that to generate heat when needed in other parts of the data center. In places where the climate is cold, it brings that cool air into the data center. Otherwise it takes the outside air and runs it through what are known as adiabatic coolers. These custom-configured containers have sensors that automatically adapt to outside temperatures that fall below 50 degrees or above 95 degrees, as well as humidity levels lower than 20 percent or higher than 80 percent.

While these portable data centers represent the latest proof-of-concept for where Microsoft sees organizations building on-premises private clouds, they are used to power Microsoft's own Azure-based data centers. "These are actual units that run our data centers today," said Bryan Kelly, a service architect for research and engineering in Microsoft's Global Foundation Services business unit, who demonstrated the portable data center for me.

It is also a reasonable bet that while they are not on Microsoft's official product roadmap, customers will ultimately be able to buy their own Azure powered containers that, in some way, emulate this model, most likely from large systems vendors such as Cisco, Dell, EMC Hewlett-Packard, IBM and custom system builders.

Speaking at the Microsoft Management Summit in Las Vegas Tuesday, Bob Muglia, president of the company's systems and tools business was the latest to suggest as much.  "The work that we're doing to build our massive-scale datacenters we'll apply to what you're going to be running in your datacenter in the future because Microsoft and the industry will deliver that together," Muglia said, according to a transcript of his speech.

Microsoft will buy 100,000 computers this year for its own data centers, Muglia said. They will be housed in these containers weighing roughly 60,000 pounds, equipped on average with 2,000 servers and up to a petabyte of data.

The units I saw showed no brands, so I have no idea, whether they were bundled with Cisco, Dell, HP or IBM components, just to name a few. But it doesn't matter, according to Kelly. "This is all commodity hardware," he said.

That may be so but the configuration of these data centers is anything but commodity. To give it justice, check out this Channel 9 video taken by Microsoft's Scott Hanselman at PDC where cloud architect Patrick Yantz provided a 16-minute walkthrough of the units.

Do you see these data centers in your future? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on April 22, 2010 at 11:59 AM0 comments

Infosys Bags $100 Million from Microsoft

After declining to disclose the value of its outsourcing deal with Microsoft, Infosys CFO today reportedly revealed that it's worth a whopping $100 million.

Bangalore-based Infosys announced Tuesday that Microsoft is outsourcing its IT help desk, PC, infrastructure and application support to them in a three-year deal that involves 450 Microsoft locations in 104 countries.

CFO V. Balakrishnan revealed its windfall to Dow Jones today.  When I spoke with Nataraj, Infosys VP and unit head of infrastructure management Tuesday, he emphasized that the deal will not lead to any job displacement.

Nataraj also said that the work it has picked up was support already farmed out to a multitude of partners in the past -- that this was mainly the consolidation of that work to one partner. "Microsoft has outsourced parts of its internal IT before," notes Directions on Microsoft analyst Paul DeGroot.

Our original news report generated some less than enthusiastic comments. "C'mon Microsoft -- use US-based workers," wrote Bob. "No wonder no one wants to go into the tech field. Even Microsoft drinks the outsourcing Kool-Aid."

Added John: "What bugs me more than anything is that, like anyone who offshores to China or India, the cost of Microsoft products will not be cheaper. On the one hand we're too expensive to employ, on the other hand we live in the U.S. and are paying a premium for goods and services. Well, we may be seeing the last of the great experiment we call the U.S.A."

DeGroot points out that outsourcing of IT support could have other ramifications for Microsoft. For example, with fewer internal operations being performed by Microsoft employees, it could mean that there are no longer as many people internally with easy access to product groups and to highly detailed operational data.

It’s also potentially providing less access to "the world's best Exchange/Windows/SharePoint/SQL Server engineers who they might be able to call on to solve a problem that a lot of customers are having," he said.  

"Microsoft also uses its internal systems to 'dogfood' new products," he added. "For example, new products are often put into full production internally while they are still in external betas. Microsoft users put up with the problems they might encounter because they understand that their experience will help the company make a better product."

Posted by Jeffrey Schwartz on April 15, 2010 at 11:59 AM6 comments

VCs Set Expectations

If you're looking for VC money, don't presume no one else has considered your unique idea, be prepared to show you have a solid customer roster and don't expect to find the easy money of yesteryear.

Those were among the takeaways of a panel presentation I attended earlier this month with five VCs and a company that received venture funding. It was moderated by Bloomberg TV's Taking Stock anchor Pimm Fox. 

As a prelude to the panel, PricewaterhouseCoopers' partner David Silverman revealed PwC's annual MoneyTree report, which gave the lowdown on last year's dismal year for venture funding that was tighter than ever. Investors only pumped $17.7 billion into companies, down 37 percent over 2008's $28 billion.

There are indications that it is starting to bounce back incrementally this year, with signs trending toward $20 billion, Silverman said. As reported, funding remains tight -- but VCs still see opportunities in areas such as cloud computing, smart phones and green technology. VCs are looking at smaller deals and companies that have proven and viable customer bases.

The takeaway: Those seeking big payouts of yesteryear should reset their expectations, the VC's warned. "I think the classic VC model is broken," said First Round Capital founder and partner Howard Morgan

"The mathematics are simple; if you raised a billion dollar fund and you wanted it to return 20 percent, you needed to return $3 billion. If you own 20 percent of your companies that exit, you needed to create $15 billion worth of market cap. If you were in YouTube and Skype and MySpace and a few others, you may be halfway there. That part is broken. What's not broken is that companies need capital."

Vytas Kislieulius, CEO of Collections Marketing Center, a software-as-a-service startup that runs a collections exchange and describes himself as a "serial entrepreneur," said it is important to be realistic when making your case to potential investors these days.

"I have never been one to believe that the investors are here for my benefit but for our benefit. If I make it good for them they'll make it good for me," Kislieulius said. “If I can't make it good enough for both of us, I know who’s going to win. It's not me. That's the way the deal works."

That also means startups should go to investors with a solid business case. "There's less willingness to let it ride now than there used to be," Kislieulius said. "It takes so much more proof that there's a real market and that there's real customers."

Finally, he warns, those seeking funds should scope out potential investors carefully. "You have to choose them as carefully as they choose you because if you just take the money and it's a mismatch, it's brutal, I can promise you that."

Have you reached out to the venture community for funding? Or are you seeking alternative forms of funding your business? Drop me a line at [email protected] and follow me on Twitter @JeffreySchwartz.

Posted by Jeffrey Schwartz on March 31, 2010 at 11:59 AM0 comments