Should Microsoft Fear Google Apps?

Can Microsoft convince customers to upgrade to the full version of its forthcoming Office 2010, due for release May 12?

While that question has been looming large for awhile, today The Wall Street Journal's Nick Wingfield once again raises that specter focusing on the formidable challenge from Google. Wingfield said "Microsoft seems to be staring down the Google threat," pointing to wins by General Motors and Starbucks.

Google has 25 million Google Apps customers, though Gartner says only 1 million are paying customers. The report says there are 40 million paying Microsoft Office online customers, a small but noteworthy fraction of the hundreds of millions of Office users.

With Office 2010, Microsoft is adding its own Web-based client that will extend the use of apps such as Word and Excel to the browser. Moreover, Office 2010's ability to link to the forthcoming SharePoint Server 2010 will make the two a unique pair of products that will enable new levels of collaboration within enterprises and among extended work groups (for a deep dive on Office 2010 see the cover story in the current issue of Redmond magazine).

Microsoft appears to be shrugging off Google Apps as a threat to its Office franchise. But Silicon Alley Insider editor Henry Blodget begs to differ, writing "Microsoft Should Be in Major Panic Mode." Why? Blodget argues that Google has improved the capability of its offering and that many Office users will migrate. Microsoft can add more features, he argues, but those will appeal to a small subset of overall users.

"So don't take the puny size of Google's App business and the fact that big companies aren't seriously considering Apps as an alternative as a sign that Microsoft is safe," he writes.  "Microsoft isn't safe.  Microsoft is very exposed."

Since launching its partner program last year, Google recently reported that it has signed on nearly 1,000 solution providers. One of them is Tony Safoian, president and CEO of SADA Systems, who is both a Microsoft Gold Certified Partner and a member of Google's program. Safoian appeared last week on a Redmond Channel Partner Webcast hosted by editor-in-chief Scott Bekker.

"We feel like there are customers that are a great fit for Google and culturally they may be a little different," Safoian said. "And there's customers who will never get away from a desktop oriented experience or they just love the Outlook interface and they've invested a lot in that technology. We are just being honest and faithful to the market in being able to speak intelligently about both solutions and being able to offer whichever one makes the most sense."

Are you looking to upgrade to Office 2010? If so, why? Or should Microsoft be in panic mode? Drop me a line at [email protected]

Posted by Jeffrey Schwartz on March 29, 2010 at 11:59 AM4 comments

Is Windows Phone 7 Following in Palm's Footsteps?

While many loathe writing off Palm, the company responsible for creating the first generation of PDAs, the prognosis isn't looking too good. At the moment, those predicting Palm's demise seem to be heavily outweighing those who believe the company is going to regain its former glory.

Palm's sustainability came into deeper scrutiny late last week when the company said it shipped 960,000 units and only sold 408,000 of them. That suggests the company has stuffed its channel with a ton of unsold inventory. The news caused its shares to drop 30 percent Friday. Though the shares rallied early on the news that AT&T would start selling its devices, the company's shares closed down half a point.

Critics point to a number of missteps by Palm, from choosing Sprint as its exclusive launch partner (it added Verizon in January)  to releasing the new device last summer -- days before Apple started shipping its next generation iPhone. But the biggest mistake has been how the company treats its partners and developers.

Despite the promise of delivering a software development kit that would be friendly to any JavaScript or HTML developer, the tooling failed to arrive in advance of the device. This dampened the prospect of it building a rich partner ecosystem. And now there are only 2,000 apps that support Palm's WebOS, compared with 170,000 for the iPhone, 30,000 for Google's Android and 5,000 for Research in Motion's BackBerry, according to data compiled by Silicon Alley Insider.

The 1990s saw Palm building a vast developer ecosystem with its PalmOS. "Back in the early days, Palm could do no wrong and was an unstoppable force, it dominated the PDA space…" recalls longtime Palm devotee Mark Nielsen in a blog posting last month.

But a key problem this time around was that Palm lost the developer ecosystem long before WebOS, Nielsen continued. Under that backdrop, Nielsen begs the question: is Microsoft following in Palm's footsteps with its Windows Phone 7 Series strategy, which effectively scraps the old Windows Mobile 6.x code in favor of the Silverlight RIA-based architecture and Zune interface? In other words, just as PalmOS apps were useless to WebOS, will the same come true for .NET Windows Mobile developers?

"I have nothing against the Zune. I own one but it's not Windows Mobile and its navigation UI is not very flexible. On top of that, they choose to not support past apps, which once again I believe was a huge mistake for Palm," Nielsen notes.

"So like Palm, they have chosen to start over and play catch-up on third-party apps when they didn't really have to," said Nielsen. "You've alienated your past developers while hurting their customer-base which is your customer-base. In the meantime, you've positioned your new OS to 'wow' the home consumer and downplay your enterprise strengths. Microsoft, it's not too late to correct some of your decisions. Just look at Palm and see how it has worked for them."

Giovanni Gallucci, organizer of last year's Windows Mobile Developer, says that's not a fair comparison. "The PalmOS ecosystem was dying or dead," he said in an interview. "The Windows Mobile team learned by watching Palm and realized they have to get their code out there fast, early and into everybody's hands. Clearly Palm's approach that no one would get the SDK until after the device shipped was a strategy that failed."

Gallucci dug himself into a hole in early 2009 when he and others launched the Palm PreDevCamp effort. He shortly walked away from it last year after its apparent demise. It should also be noted that Apple wasn't quick to make its SDK available before the iPhone came out. However, this didn't hurt them as it did Palm.

"Microsoft is going to the opposite extreme saying 'we're going to give you the SDK well before we even call this an alpha,'" he said. "They are taking a risk, much more than any other company does in giving developers access to their code, long before it's fully baked. But it's a risk that's paid off for them in the last three decades."

What's your take? To learn more about Microsoft's new mobile strategy, see: Top 7 Windows Phone 7 Highlights from MIX10. Share your thoughts by droping me a line at [email protected]

Posted by Jeffrey Schwartz on March 23, 2010 at 11:59 AM4 comments

Remembering Jerome York

Jerome York, best known for his association with the billionaire and activist investor Kirk Kerkorian, passed away late last week just days after suffering a severe brain aneurysm.

York, 71, was best known for playing a key role in helping save Chrysler and later IBM. He was brought in to both companies as CFO when their survival was very much in question. York instituted major cost-cutting initiatives and is credited with contributing to their respective turnarounds.

At the time of his death, York was still sitting on Apple's board, where he was a director since 1997. York joined Apple's board just prior to the return of CEO Steve Jobs. "He has been a pillar of financial and business expertise and insight on our board for over a dozen years," Jobs said in a statement. "I will miss him a lot."

More recently, York was in the spotlight for his efforts to lead Kerkorian's initiatives to salvage General Motors before its meltdown last year that resulted in its filing for bankruptcy. As his obituary in The New York Times noted, he foresaw much of GM's problems years before they played out, though his warnings were largely ignored.

His obituary pointed to "one rare miss" when he and some investors bought direct systems marketer Micro Warehouse for $275 million, looking to capitalize on the boom for selling IT goods online. I recall sitting down with York at Micro Warehouse's Norwalk, Conn. headquarters. At the time, York was still treading water, trying to transform the company from an inbound seller to an outbound marketer of systems. But Micro Warehouse ultimately filed for bankruptcy and was snapped up by rival CDW.

Posted by Jeffrey Schwartz on March 22, 2010 at 11:59 AM1 comments

Microsoft Plunges Into VDI Pool

While client and desktop virtualization was always something Microsoft knew it couldn't ignore, it has always loomed large as a threat to Redmond's Windows franchise. But a group of coordinated announcements today suggests Microsoft is going to put more emphasis on both application virtualization and virtual desktop infrastructure (VDI) technology.

Microsoft has taken several key steps to make its Application Virtualization (App-V) and VDI stack both more appealing from a licensing perspective, as well as from an implementation standpoint.

"It's a coming out party," IDC analyst Al Gillen said in a telephone interview. "Microsoft had been very disinterested in client virtualization, or at least in promoting client virtualization. This represents a fundamental shift of strategy for them. They really have not endorsed client virtualization anywhere near the level of sincerity that they needed to. It's ground-breaking from my point of view for Microsoft to do this."  By not putting emphasis on VDI, Microsoft risked seeing VMware and Citrix continue to expand its presence, Gillen points out.

Microsoft kicked off its announcement with a Webcast talking up its added focus on VDI with a panel of customers, along with Gartner analyst Mark Margevicius, to extol VDI in general and Microsoft's place in the equation.

The popular travel site Expedia Inc., for example, is well into the rollout of a catalog of 600 applications to 7,000 distributed desktop users as part of a migration from Windows XP to Windows 7, and is now doing a proof-of-concept on VDI, said Chaz Spahn, a senior systems engineer at Expedia in a telephone interview.

"We looked at SCCM [Microsoft's System Center Configuration Manager] or application virtualization technology and saw it gave us faster time to delivery," Spahn said of the App-V decision, noting it is appealing for use with call center agents and remote developers, who are typically contract workers distributed worldwide.

"We find at Gartner that the level of interest in desktop virtualization without exception is very high right now," Margevicius said on today's Webcast. Customers across sectors ranging from health care, government, finance and manufacturing are all interested in it due to its potential to ease administration and deployment as well as address concerns about compliance and security. "The distributed nature of PCs is very much at risk in terms of data being compromised," he said.

What is so noteworthy about today's announcement?  Microsoft said customers no longer have to purchase separate licenses to access Windows in VDI environments. For non-Software Assurance customers, Microsoft has added a "Windows Virtual Desktop Access subscription" priced at $100 per year per PC or thin client device.

Meanwhile, Microsoft is upgrading its VDI stack, adding support for Remote FX graphics acceleration platform into Windows Server 2008R2, support for dynamic memory enabling memory on VMs to be changed on-demand and the elimination of the need for hardware-based virtualization. Also today, Microsoft added to its longstanding partnership with Citrix Systems, where it will extend Citrix HDX technology in XenDektop to RemoteFX.

"While some if it isn’t quite ready yet, from a competitive perspective they want the market to know what's coming and get the market excited about their portfolio," said Jeff Groudan, director for thin client computing at Hewlett-Packard, in a telephone interview. HP used Microsoft's launch to announce its Remote Desktop Client (RDC) add-on for its portfolio of Windows Embedded Standard (WES)-based thin clients.

Today's announcements also follow Microsoft's recent release of App-V 4.6, an add-on to the Microsoft Desktop Optimization Pack and Microsoft Application Virtualization for Terminal Services. Key to that upgrade is that it allows organizations to deploy applications in a single storage area network (SAN), rather than require them to be spread out across VMs.

Microsoft had no choice but to take the plunge into the client virtualization pool, observers say. Among other reasons, it's critical to Microsoft's effort to become a player in the overall mobile computing space, Gillen says. "Mobile devices are becoming important and it’s a space that Microsoft doesn't own," Gillen says. "Client virtualization is one of the things that really marries together traditional client computing together with mobile computing and Microsoft was going to be a non-player if they didn’t get in their and compete."

If you're a customer, are you looking at VDI and application virtualization for your organization? And for partners, do you see a rich opportunity for services dollars here? Drop me a line at [email protected].

Posted by Jeffrey Schwartz on March 18, 2010 at 11:59 AM0 comments

Are Microsoft Partners 'All-In' the Cloud?

A week after trying to sell customers on its "we're all in" campaign to the cloud, Microsoft is now trying to bring its vast network of partners onboard.

Allison Watson, the corporate vice president of Microsoft's Worldwide Partner Group, made her pitch Wednesday in a prepared and edited video presented via a 10-minute webcast.

"The cloud is here, the cloud is now, and it is important that each of you embrace understanding what it is," Watson said, after reiterating CEO Steve Ballmer's five "dimensions" about how the cloud will embody all of Microsoft's computing efforts.

But if the number of views tallied on the video is any gauge (less than 100 nearly 24 hours after the webcast), it leads me to wonder whether partners are feeling the buzz about Microsoft's cloud campaign. As I was watching the video, available on-demand, I was wondering: where's the beef?

And without further adieu, Watson explained how 1.5 million McDonald's employees at 31,000 stores are using Microsoft's Business Productivity Online Suite (BPOS). "They needed a cloud e-mail solution and Microsoft online services became their choice." (Yes, I know that "where's the beef" was a campaign by McDonald's rival Wendy's, but you get my point).

Watson used the McDonald's example to explain how BPOS can be integrated with customers' internal systems and partners' own offerings. "I would highly encourage you to actively integrate these offerings within your own larger stack today so you don't miss out on this cloud opportunity now," Watson said.

Microsoft has 7,000 partners offering BPOS with 20,000 active trials under way, she said. And since its launch last month, 200 customers per day are signing on to use Windows Azure, she added. "In many ways, it's still a green field with an upside in trillions of dollars," she said.

Indeed, according to our own survey of 500 Microsoft partners, 18 percent believe cloud computing will have an impact on their business this year. Twenty-six percent believe the impact will come next year, and 16 percent say it will arrive in 2012. Another 10 percent predict it will come after 2013, while 8 percent say it has already arrived.

But in response to a blog post by Watson following the video that effectively reiterated Microsoft's five principals, one partner asked, "Where can I get information on partner opportunities now?" Watson replied that more information will come at the Worldwide Partner Conference (WPC) in July.  

There are some actions partners can do in the meantime. She suggested working with the Bing APIs because search will embody the need for partners to help customers find and aggregate data in new ways moving forward. "We're developing search technologies that integrate information seamlessly from the cloud from users, from developers, and we are bringing all of those things together in an integrated way," she said.

Another key area where partners will be able to add value is helping customers address security and privacy, she noted.

OK, so Watson has primed the pump. But many partners are still wondering how this will change their business. What's your take on Microsoft's "we're all in" cloud campaign? Are you "in" or are you still wondering, "Where's the beef?" Drop me a line at [email protected].

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

Will Novell Finally Be Acquired?

In more than two decades of following Novell, I've had many conversations with experts about who might someday acquire the company. In my mind, it was never a question of "if" but "when" Novell would be snapped up. But the company just chugged along.

Could that acquisition finally be arriving?

New York-based hedge fund Elliott Associates LP on Tuesday made a bid for Novell for $2 billion -- a 49 percent premium over Novell's share price Tuesday night before it catapulted yesterday by 28 percent. Elliott already holds an 8.5 percent stake in the common stock of Novell. The hedge fund was vague about its intentions with Novell but believes the company is underperforming.

Indeed, Novell has underperformed compared to key rivals Red Hat, Microsoft, Citrix Systems and IBM, wrote Anders Bylund, an analyst and contributor to The Motley Fool. But what will a hedge fund do to turn the company around? Potentially chop it up and sell off the pieces? Might another player -- such as one of its rivals -- be able to add value to its offerings?

"Over the past several years, Novell has attempted to diversify away from its legacy division with a series of acquisitions and changes in strategic focus that have largely been unsuccessful," wrote Elliott portfolio manager Jesse Cohn in a letter to Novell shareholders. "With over 33 years of experience in investing in public and private companies and an extensive track record of successfully structuring and executing acquisitions in the technology space, we believe that Elliott is uniquely situated to deliver maximum value to the company's stockholders on an expedited basis."

Elliott declined to elaborate further and it remains to be seen if a bidding war emerges.

Novell was once a kingpin in the software industry. Its founding CEO, the late Ray Noorda, was a legend in the 1980s and early 1990s, and was perhaps best known for coining the term "coopetition."

Once Microsoft's nemesis, Novell was the first major player to provide the technology for enterprises to interconnect their PCs. These days, though, you'd be hard pressed to find an enterprise of any size still relying on Novell's NetWare.

After a failed bid to acquire Lotus in 1990, Novell later acquired WordPerfect, ultimately selling most of those assets to Corel. The one vestige of WordPerfect still owned by Novell is the technology that is now the basis of GroupWise, also a minor player in messaging compared to Microsoft Exchange and Lotus Notes.

These days, of course, Novell is best known as the No. 2 Linux distributor. But it also has virtualization, systems management, identity management and services offerings.

And ironically, Novell today is a Microsoft partner as Noorda's philosophy of coopetition has come full circle -- much to the consternation of many in the open source community.

How important is Novell's fate to your business, and what are the implications of where the company ends up? Drop me a line at [email protected].

Posted by Jeffrey Schwartz on March 04, 2010 at 11:59 AM0 comments

Will XP Users Upgrade Existing PCs to Win 7?

With today's deadline to sign off of the Windows 7 RC, many users have to decide whether to go back to Windows XP or Vista, or whether to pony up and upgrade to Windows 7.

Providers of PC migration software like Laplink and Detto Technologies can capitalize on that decision either way. In my news story, I described how I used Laplink's PCmover to upgrade to Windows 7 from the release candidate, but the software is really intended for those with XP or even older versions of Windows looking to a) migrate those systems to brand-new ones, or b) do in-place upgrades of existing PCs from older versions of Windows to Windows 7.

Systems with Vista don't require a clean install when upgrading to Windows 7, though in many instances it might not be a bad idea. But those with XP have no choice other than to perform a clean install. And that's where Laplink has its sights. While PCmover is a retail product, Laplink is also is trying to extend its reach to the enterprise. Laplink has OEM arrangements with Dell, Hewlett-Packard and Lenovo, as well as 1,000 channel partners.

Why would a channel partner want to bother with a low-cost tool like PCmover? A $500 starter kit for 25 licenses is a good way to offer small businesses PC migration services, said Mark Chestnut, Laplink's senior VP of business development.

"For someone who is in the business of delivering PC migration as a service, we lower their cost of delivering that service and allow them to make better margins," Chestnut said.

Many small businesses may not have the patience or the resources to re-image their Windows 7 systems, Chestnut said. That offers a services revenue opportunity for solution providers, he added. Microsoft insiders tell him there are still 20 million machines running XP that are eligible to be upgraded to Windows 7.

"The current economic environment being what it is, companies are really obviously clamping down on IT spending, yet Windows 7 has some huge advantages," Chestnut said. "I think they will take a closer look at keeping as many of the old PCs and preserving their previous investments longer, than in the past."

Are you considering upgrading your older hardware to Windows 7? Or, if you're a solution provider, do you see an opportunity? Drop me a line at [email protected].

Posted by Jeffrey Schwartz on March 01, 2010 at 11:59 AM1 comments

Look Who's Tweeting: Microsoft's Channel Chief

Microsoft channel chief Allison Watson last week joined the Twitterati and has launched a new blog called Redmond View.

Watson, corporate vice president of Microsoft's Worldwide Partner Group, has invited partners to follow her on Twiiter @Allison_Watson or on Facebook "so I can get your feedback and chat with you about what's going on in the marketplace and in your business," she wrote in her inaugural blog post.

Getting right down to business, Watson focuses on a subject near and dear to partners and Microsoft: the Business Productivity Online Suite (BPOS). Pointing to over 1 million BPOS seats, Watson calls on partners to go deeper.

"It's important that you internalize our offerings in your unique business requirements, and then give us feedback about what you need to capture the opportunity," she said. "A lot of partners are asking me, 'How do I make money in this deal?' It depends on whether you're a reseller partner, an ISV partner, or an integrated partner. Based on all the deals we've done to date, we're hearing that the average partner opportunity is about $167 a seat. That includes partner referral fees, the initial setup and migration fees, as well as factoring in some of your managed service fees. That's a pretty big opportunity."

Watson points to four tools Microsoft is offering: the profitability modeling tool, a partner link tool that lets partners embed direct quoting, a tool that allows co-branded billing and a commerce dashboard to help understand the success of sales trials.

Watson's call to action comes as some Microsoft partners are voicing frustration over its pricing moves, and as Google appears to be gaining momentum in the enterprise with its own Google Apps offering (Google this week said it has nearly 1,000 partners in its Google Apps Authorized Reseller program).

What's your take on Microsoft's tools and Google's momentum?. Are you looking at Google Apps as an alternative to BPOS, or perhaps an adjunct? Drop me a line at [email protected]. And you can follow me @JeffreySchwartz on Twitter, as well, for other short updates.

Posted by Jeffrey Schwartz on February 24, 2010 at 11:59 AM1 comments

Cisco Declares War on HP

Cisco's decision to pull the plug on its partnership with HP was a major salvo in tensions that have been brewing between the two companies over the past year. Cisco last week said that it's cutting HP off as a Certified Channel and Global Service Alliance partner, a move that could force the companies' respective partners to make some tough choices.

"There may be a push by one or both companies to push channel partners to an either/or situation," said Mark Amtower, a marketing consultant with expertise on selling IT to the federal government, in an e-mail. "Many companies carry both as partners right now -- I don't think that will continue. If you push HP, marketing support from Cisco will disappear and vice versa."

The two companies have been encroaching on each other's turf for some time, with Cisco last year saying it would offer its own blade servers and HP becoming more entrenched in networking by bolstering its ProCurve line and agreeing to acquire 3Com Corp.

With the partnership set to expire April 30, Cisco took the unusual move of publically announcing it was cutting HP off. HP quickly shot back, accusing Cisco of not working to "best serve clients' needs."

Does this move signal an end to co-opetition? It raises the question of whether we will we see more partnerships unravel or, at the very least, become more diminished as companies look to become single-source providers.

Or maybe, as Directions on Microsoft analyst Paul DeGroot suggested, the current partnership has become "too all-or-nothing." Perhaps they needed "a more nuanced approach to ensure that joint customers get the support they require, while the other partner doesn't get privileges that it doesn't need for mere interoperability purposes," he said.

Gartner analyst Tiffani Bova agreed. "I wouldn't be surprised if a new arrangement doesn't follow closely behind where they meet each other half way in order to continue to service their joint customers and partners," Bova said.

Indeed, that may happen. On the other hand, what if Cisco means business and wants nothing to do with HP? If indeed these two companies go their own way, we could see Cisco getting closer with IBM and perhaps Oracle/Sun while HP could forge closer ties with the likes of Brocade and Juniper Networks.

Certainly, for Microsoft partners, this also raises some questions since most also carry gear from Cisco, HP or both. What's your take on the implications of Cisco and HP going separate ways? Will we indeed see others follow suit? Among other things, could this lead Microsoft to rethink its strategy of working closer with the likes of Novell, Red Hat and Zend? Could co-opetition as we know it be on the line here, or is this just a case of Cisco playing hardball?

Drop me a line at [email protected].

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

Seeking Funds for SMBs

Small and medium-size businesses have long been the salvation of IT recoveries, but this time that conventional wisdom may be falling flat.

The good news, as I reported earlier this month, is the economy surged last quarter by 5.7 percent, the largest such expansion in six years. Adding to that optimism, the Federal Reserve yesterday said business equipment output was up 0.9 percent in January, slightly higher that December's 0.7 percent.

IT output jumped 1.7 percent, marking the third consecutive monthly gain of more than 1 percent for IT gear. That has reflected in strong earnings reports from Cisco, Intel, Microsoft and, yesterday, HP, which posted an 8 percent increase in revenues and boosted its outlook for the year.

That should bode well for SMBs, which are typically the first to lead recoveries from recessions. But a troubling report in BusinessWeek underscores the fact that SMBs this time aren't leading that recovery. Instead, SMBs are continuing to let go of employees and reduce capital spending.

Only 20 percent of those surveyed by the Federation of Independent Business plan to make capital outlays. Even more concerning, 3 percent see sales increasing, -1 percent say they plan to hire more employees, 1 percent expect the economy to improve and 5 percent believe it's a good plan to expand, according to the FIB survey (PDF). And -13 percent expect credit lines to open up.

Small businesses continue to hurt, that same BusinessWeek piece said, noting a Feb. 1 report by the Federal Reserve saying that banks continue to hold back on offering credit to them.

Probably none of this is surprising, but it is rather sobering. How is this affecting your ability to sell solutions to prospects? Have you found avenues of financing for your own business or that of your clients? Perhaps you've turned to leasing, private equity or even the venture capital community? Please share them with us. Drop me a line at [email protected].

Posted by Jeffrey Schwartz on February 18, 2010 at 11:59 AM5 comments

Will Partners Embrace New Win Phone 7?

Now that Microsoft has revealed its mobile ambitions, partners must wait to see what's underneath the covers.

Microsoft began its orchestrated rollout of the new Windows Phone 7 Series this week at the Mobile World Congress in Barcelona. The new platform replaces Windows Mobile 6.x with a completely revamped user interface that incorporates Microsoft's Metro, the basis of Zune and Windows Media Center.

Windows Phone 7 Series licensees must adhere to specific integration requirements such as defined screen sizes, support for touch and GPS, among other things. The goal is for Windows Phones that come out later this year to be more architecturally consistent like the BlackBerry and iPhone, while offering a broader ecosystem of devices and form factors.

If you have a vested interest in the current Windows Mobile, you should take a look at the changes that lie ahead. They're not trivial. This 20-minute Channel 9 video provides a good overview of what Windows Phone 7 Series will look like.

But Microsoft is tight-lipped about the underpinnings of its new platform. While company officials say that's by design – to keep focus on the new UI -- it has some wondering whether that portends portability issues.

"I think probably what's going on is it’s a complete break with Windows Mobile 6.5," says Directions on Microsoft analyst Matt Rosoff. "They know that news might not be received well by application developers so they are trying to figure out what the portability story will be."

If Microsoft is headed in a different direction architecturally, it's going to have to shim the old apps to get them to run, says IDC analyst Al Hilwa. "We're talking about various subsets of .NET underneath so it's not that difficult, but the question is whether they have the time to do that," Hilwa says, referring to the planned holiday season release. Partners will get a better picture of what development challenges they face when Microsoft releases the Windows Phone 7 tooling and bits at next month's MIX 10 conference.

"Windows Mobile has a portfolio of business app extensions and, given the new interface, those folks may very well have to re-architect their apps," Hilwa says. "I think they will be more than willing to do that, that’s my sense. They are already partnered and invested in Microsoft technologies. I think they will make that judgment and take the time to refurbish their apps. But as usual with application vendors, not everyone always will, there will be those that can't invest much but I think that's a minority."

More curious: can Microsoft attract those partners who have passed on Windows Mobile but have already built apps for the Apple iPhone, Research in Motion BlackBerry and devices based on Google's Android platform?

For now, Microsoft is emphasizing the consumer aspects of Windows Phone 7 – the Zune interface, the ability to aggregate social networks, photos, games via Xbox Live, and media into a common user interface. Though Microsoft hasn't played up the business capabilities, officials say it will support OneNote, Exchange, Word, Excel and access to Sharepoint. But at this week's debut, Microsoft gave mere lip service to those features. "The amount of time devoted during the presentation to "Productivity" was disappointing," writes Philippe Winthrop, an analyst at Strategy Analytics, in a blog posting.

Enterprises for the most part don't develop mobile apps internally, they rely on the partner community, Hilwa says. The question is will Windows Phone 7 Series win over the partner community? Drop me a line at [email protected].

Posted by Jeffrey Schwartz on February 16, 2010 at 11:59 AM1 comments

SAP Seeks Happiness

It's been a dramatic week for SAP, whose software runs the operational underpinnings of some of the largest enterprises. The company shook up its executive suite, replacing CEO Leo Apotheker with co-CEOs Bill McDermott and Jim Hagemann Snabe. SAP today also disclosed the departure of former SAP CEO John Schwarz.

Listening to founder and chairman Hasso Plattner speak on Monday during a press conference that was webcast, it was a day of reckoning for the company to acknowledge its missteps and apologize to its customers for gouging them.

Those weren't his exact words but he tacitly acknowledged SAP has to find a new engine of growth besides imposing heavy maintenance and licensing fees. "We are a public company, and profit is everything," Plattner said. "But in order to be profitable, it needs to be a happy company. I will do everything possible to make SAP a happy company again. And in order to be profitable and please the shareholders, we have to focus on our customers, and we have to make the customers and their employees happy, as well."

During the Q&A portion of the call, a reporter asked if Plattner was acknowledging that SAP was an unhappy company. Clearly resenting the question, Plattner responded, "Please don't turn it around that we are unhappy. Take it that we have to be happier. Happy companies are companies who enjoy their success, their strategy, and are marching forward at the highest possible speed without complaining. SAP has the capacity, has the strategy, has the development on its way, and it takes unfortunately some time with our huge customer base."

Forrester Research analyst Paul Hamerman said in a blog post that Plattner said the right things. "He's got this right: taking care of your customers makes your company successful. Forcing profitability via price increases and sales tactics is not a sustainable recipe for success," he wrote.

True happiness for SAP, of course, will come when it can -- among other things -- address its stalled cloud strategy. The company launched its Business ByDesign, a SaaS-based application suite, in 2008 but angered larger enterprise customers by saying it was targeted at organizations with 100 to 500 employees, according to a research alert released by Saugatuck Technology today.

"SAP's strong prevailing culture and its need to protect its R/3 cash flows fundamentally forbade the company from pursuing offerings that could replace it," the report said.

I spoke with one of the report's authors, Saugatuck founder and CEO Bill McNee, who described four challenges facing SAP.

The biggest changes SAP must face are cultural. "They have a very significant cultural transition where they have focused historically on the large enterprise customer almost to a fault and a legacy around the big deal, to a technology-not-invented-here syndrome," McNee said.

Second, the company needs to accelerate cloud strategy. "They need to better articulate their cloud vision," he said.

Third, the company needs to figure out how to bring forth the right technology and monetize it.

And finally, if SAP really wants to succeed in targeting the small and medium business market, it needs to come up with an accelerated go-to-market strategy. That also means shedding its legacy of primarily selling direct to customers. "SAP has less experience building partner networks that will enable them to succeed in the small to medium market," McNee said.

If SAP is successful with its Business ByDesign offering and building up a partner eco system, it is likely to butt heads with Microsoft's Dynamics business, McNee said. "Microsoft's channel should stay alert to changing customer requirements, and evolving offerings from Microsoft, going forward."

What will it take to bring happiness to those buying and selling ERP, CRM and other business solutions? Share your thoughts by droping me a line at [email protected].

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