In-Depth

Strike It Rich: How Partners Can Tap Microsoft's Upcoming Releases Now

Brand new technologies in Microsoft's upcoming product wave could spell opportunity for creative partners

The phrase "Microsoft innovation" is spoken with pride in Redmond, but outside the company, it's often a stand-alone punch line. But whether you applaud or scoff, you can't deny that the company spends big bucks on researching, developing and acquiring promising technologies. And, arguably, Microsoft has never pumped out as many new, improved or rebranded products as it plans to deliver over the next 18 months.

The bulk of Microsoft partner revenues come from well-worn business models. Microsoft notes that its partners sell 350 of the company's products, but most partner revenues stem from just a handful of those -- primarily from adding installation services or custom applications on top of the base operating systems, the Office desktop suite and the core server apps such as Exchange and SQL Server.

However, if you can spare a few minutes to pull your nose out of that rat's nest of cables in your customer's server room, you might be surprised at some of the wild stuff you can expect to see from Microsoft during the next year and a half.

We don't mean just the basic plumbing changes to the core products that will enhance the business you already know, although there are plenty of those welcome changes. We're talking more about new products and opportunities for the Microsoft channel.

To provide you with a quick overview of what's ahead, we compiled details on some of the most exciting new technological opportunities featured at this summer's Microsoft TechEd 2006 show in Boston.

That's not to say that all -- or even that any -- of these technologies will succeed. If the past is a reasonable indicator, many such opportunities will fall flat or ultimately find their market in a different product many years later. (Anyone remember Cairo, Kodiak, Palladium or Mobile Information Server?)

On the other hand, Microsoft's business isn't static -- and some of its technological babies do grow up (ISA Server) or become behemoths themselves (SQL Server). In a community of 400,000 partners, even a technology that turns out to be a complete commercial dud could be a smashing success for a handful of companies who spot the right opportunity.

So take some time to wrap your head around these technologies, and mentally apply them to your core strengths, your market and your geography. You may well find one of these an exceptionally valuable proposition.

Office SharePoint Server
If you're looking for the next product likely to become a blockbuster, look no further than Microsoft Office SharePoint Server.

Partners are seeing momentum with customers behind the existing pre-Office version of the enterprise portal and the separate file server-based collaboration technology, both of which share the SharePoint name. "Our SharePoint business is really taking off," says Mike Vacanti, vice president of sales for Edison, N.J.-based Fujitsu Consulting Inc.'s U.S. North Central Region. "It's not as an enterprise-wide portal solution, but it is being used in teaming solutions. We've had to go into some companies and put all the structure and governance in. It spreads like wildfire, and then at some point that has to be corralled."

In addition to any grassroots interest, Microsoft is doing what it can to accelerate the momentum, featuring the technology prominently at TechEd and marketing it heavily. "Microsoft's making a big play to make SharePoint everywhere," says Steve Dickson, general manager for Windows Management at Quest Software Inc., a Microsoft Gold Certified Partner based in Aliso Viejo, Calif.

SharePoint is an example of a technology that's bounced through a few iterations over the years and now appears to have landed comfortably within the Office product family. Actually, the Office-branded version of SharePoint is a combined product now -- with the former Content Management Server. This is a more natural combination after the somewhat bizarre initiative to bundle Content Management Server with BizTalk Server and Commerce Server in the "Jupiter" project that Microsoft abandoned a few years ago.

Office SharePoint Server now provides, for the first time, a single platform for developing intranet and extranet applications as well as internal portals.

"You can think of Office SharePoint Server as the glue between the Office client and all your other back-end systems," says Tom Rizzo, Microsoft's director for Office SharePoint Server. Rizzo notes that partners previously had to sell and develop for SharePoint Portal server for enterprise portals and Content Management Server for Internet-facing sites. "It was like oil and water," Rizzo says, adding that the earlier arrangement didn't allow partners to leverage their expertise and development experience. "Now the partner can go in and say, 'You want an Internet-facing site, it's SharePoint; extranet, SharePoint; internal portals, SharePoint.'"

The Office SharePoint Server "glue" Rizzo describes gives the whole Office 2007 some luster as a much stronger development platform, at least in one analyst's eyes. "People have always done development with Office," says John Rymer, vice president at Forrester Research Inc., the Cambridge, Mass.-based analyst firm. "It's just been painful and difficult and limited." With Office 2007, though, Rymer says, Microsoft has "finally gotten it right." That's a potential boost for partners who have shared Microsoft's challenges in persuading end users to upgrade from stable and productive versions of the mature Office desktop productivity suite.

It's also Office SharePoint Server that allows integration of back-end systems, such as enterprise resource planning or customer relationship management, into Office -- whether or not those back-end systems come from Microsoft. Office 2007 will include integration templates for, among others, SAP AG's widely used ERP applications, Oracle Corp.'s Siebel CRM suite -- and, of course, Microsoft's own set of Dynamics ERP and CRM applications. As a result, users will be able to perform enterprise data searches in an Office interface.

Office SharePoint Server 2007 will also let users access Office applications from the server rather than having to run them on the client. For example, instead of running Excel on multiple client computers, a user will be able to access multiple instances of Excel via Office SharePoint Server on a single client.

Giving users access to enterprise apps through the familiar Office interface will be critical for ensuring successful technology implementations, says Kirk Roberts, executive vice president, products, solutions and marketing at OpenText Corp., a provider of enterprise content management applications and Microsoft Gold Certified Partner based in Waterloo, Ontario, Canada.

"Any time you have to change end-user behavior, you dramatically increase your risk of the project failing," Roberts says. "Eighty percent-plus of my customers know how to use Office. It's the de facto standard."

And Rymer says that's where partners should be looking to profit -- by building front-end interfaces for back-end applications through Office SharePoint Server.

"The big opportunity is to simplify the end user's experience with those apps," he says. "This is where enterprises want to go. Five years from now, we'll see a profound change in the way people act with corporate data and with enterprise applications."

Line-of-Business interoperability (LOBi) for SharePoint Server
In June, Microsoft and SAP released Duet, an application that integrates SAP's ERP applications with the Office front end. Now, Microsoft is offering other vendors the opportunity to integrate their applications into the suite's familiar interface.

As part of its Office Business Applications strategy -- aimed at tying business applications and processes into the Office environment -- Microsoft is opening Office to third parties through a new feature called Line of Business interoperability, or LOBi, for SharePoint Server. Office SharePoint Server 2007 surfaces back-end data in the Office interface and LOBi takes the idea a step further. And there's also the potential for third parties to go beyond what Microsoft and SAP created with Duet. With LOBi, Office applications will actually be able to process a transaction in underlying applications such as a financial or ERP systems.

"There are a whole lot of processes that are ad hoc today and aren't connected very well," says Rob Koplowitz, director of Microsoft's Office Business Applications group. He gives the example of a company using Office to pull a global team together to respond to a request for proposal and then formalizing that process and tying it to an underlying CRM system. Instead of forming a group from scratch and scheduling meetings ad hoc each time an need for an RFP team arises, LOBi will let the company tap into its CRM system directly through Office, form the same team and facilitate meeting schedules. "The things we're doing now are a step forward from Duet."

But while LOBi presents an opportunity for partners and software vendors to meet strong demand among customers for interoperability with Office, Forrester's Rymer predicts that software developers will tread cautiously before ceding the interfaces of their products and control of their transactions to Microsoft.

"This challenges the business model that [third-party vendors] control transactions and the view of that data," he says. "That was the foundation of the business models of Siebel, Oracle, SAP. [Vendors] are going to move cautiously."

For his part, though, Roberts, of OpenText, is excited about LOBi. "That's a very big deal," he says. "The SharePoint announcement without the LOBi announcement would have made it far less appealing to go in that direction."

Exchange Unified Communication
Unified messaging is a prime example of a technology that's been around for years without gaining much traction. But that's about to change. By integrating unified messaging technology into Microsoft Exchange Server 2007, Microsoft could open up new opportunities for Exchange-focused partners to provide unusual levels of value primarily, from the base Exchange product.

During a Unified Messaging Strategy Day in late June, Microsoft Business Solutions President Jeff Raikes defined the problem as Microsoft sees it: "You are one person, but you end up having multiple identities because of the [multiple] devices" ranging from landline phones to cell phones to laptop computers to BlackBerries. "That leads to communications islands. Some research that we reviewed indicated that the average organization has 6.4 different types of communications devices and 4.8 different communications applications per user. And this leads to one of the key problems: Communications is inconvenient. It's not connected."

Unified messaging, Exchange 2007-style, pours voice mail and faxes into an e-mail inbox giving users a single place to check all messages. Meanwhile, speech-based auto attendant capabilities mean that end users can call their Exchange servers to have their e-mail messages read to them or listen to voice mail via voice commands.

Megan Kidd, Microsoft's group product manager for Exchange, explains that there will be only one main requirement beyond Exchange for those capabilities: "If you have an IP-PBX, it would hook directly to your server. If you have just a PBX, you'll have to buy [a] third-party gateway."

Microsoft has bigger designs on unified communications than the initial release of Exchange Server. In his first executive e-mail in many months, Microsoft Chairman Bill Gates wrote in late June that, "In the coming year, a new wave of communications products -- including Microsoft Exchange Server 2007, Microsoft Office Communications Server 2007, Microsoft Office Communicator 2007, Microsoft Office Live Meeting 2007, Microsoft Communicator phones and Microsoft Office RoundTable -- will enable companies to create an infrastructure what will transform the way they do business."

Windows Compute Cluster Server
This one is Microsoft's entrée into grid computing. We know your eyes are glazing over with visions of thousand-node clusters churning away on protein folding or some other esoteric academic issue, but stay with us. Microsoft is taking grid computing in a different direction, and it could actually mean more money in your area of specialty.

Microsoft's product is Windows Compute Cluster Server 2003, and it's expected to be generally available this month after several release delays. The product includes both the OS that's required to run a node and the software stack that handles cluster functions such as message passing and scheduling.

Microsoft supports massive clusters as a proof-point for scalability, and Jon Borozan, a Microsoft product manager for Windows Compute Cluster Server, says there are partner opportunities in these traditional specialized clustering fields. "I think [the level of opportunity is] fairly high because there's still a lot of services work that gets done and the field is very specialized, especially overseas," he says.

But Microsoft isn't getting into this field to play me-too against Linux-based supercomputing clusters in universities and government installations. Microsoft's idea is that smaller clusters, tied into Active Directory and other Microsoft manageability technologies, can be easily set up and maintained by competent Microsoft administrators -- giving corporate workgroups and departments access to their own supercomputing resources.

It's going to be up to Microsoft partners to figure out whether customers in their area of expertise might benefit from cheap, ready access to clusters of up to 64 nodes, which Borozan calls the "sweet spot."

One Microsoft partner already thinking about the possibilities and developing a repeatable solution for Windows-based grids is Avanade Inc. "[Microsoft] has lowered the barrier to entry for processing power. The problems that can be addressed are going to change," says Tyson Hartman, CTO of Avanade Inc., a Seattle-based Microsoft-centric consulting firm that's a joint venture of Accenture and Microsoft. "The market's going to get interesting."

Longhorn Terminal Services
When it comes to Windows "Longhorn" Server, the highest-profile changes are the Server Core, Network Access Protection and the increasing componentization of Internet Information Services. But Windows Terminal Services is undergoing a major overhaul as well.

Microsoft dropped a lot of hints over the last few years about a project "Bearpaw," but the elusive enhancements to Terminal Services were bumped from a possible Windows Server 2003 feature pack to the Windows Server 2003 R2 and then to Longhorn. Whether the current lineup of changes represents the vaguely articulated Bearpaw or not, the tweaks are major and could have business-model implications for the many partners who do Terminal Services implementations either using Windows' native capabilities or in combination with Citrix Systems Inc. in Fort Lauderdale, Fla.

Windows Server Division Senior Technical Product Manager Ward Ralston laid out two major new technology areas for Terminal Services in Longhorn during a pair of packed TechEd sessions -- Terminal Services Gateway and Terminal Services Remote Programs.

Terminal Services Gateway will allow users to access remote terminals and remote terminal programs from a Web browser across a firewall without need for a VPN. The functionality relies on RDP over HTTPS to pass information across Port 443, a port that is open on most firewalls for secure HTTP transactions. The change allows workers to continue accessing centralized applications while sitting at a different computer, such as at home at a different desk in the office or on the road.

The new Terminal Services Remote Programs allows users to access remote programs that behave as if they are running on the end user's local computers and can be run side-by-side with local applications.

Softricity
Speaking of Terminal Services-based improvements, Microsoft made one other major move in the server-based computing space by acquiring Softricity Inc., based in Boston. Softricity's technology allows applications to be centrally stored on servers, streamed to desktops in a just-in-time fashion that sends services in the sequence necessary to launch the application and then runs the applications in a virtualized "sandbox" that precludes resource conflicts with other applications on the end user's system.

The technology brings a new class of capability to the Microsoft channel. A relatively obscure technology will bask in the bright spotlight of the Microsoft brand.

The companies were in the regulator-imposed quiet period following the May 22 acquisition announcement, but Microsoft's playbook is pretty clear from previous deals. Expect the company to offer Softricity's SoftGrid products until finishing Trustworthy Computing and design reviews that will allow for a Microsoft SoftGrid or similarly named product to launch with a similar feature set. That will probably do for a few years until Microsoft can slot the Softricity technologies into Microsoft's various existing product lines.

Microsoft Dynamics
Once just a mish-mash of enterprise resource planning and customer relationship management applications picked up in various acquisitions and loosely cobbled together, Microsoft Dynamics is now set to become a serious contender in the money-spinning ERP market. (See "Getting Serious about ERP," June 2006.)

Microsoft is in the process of delivering its four ERP suites and Dynamics CRM with native integration into Office. Most recently, it released the latest version of one of its suites, Dynamics AX 4.0 (an acquired product formerly known as Microsoft Axapta), in June with an Office user interface. By 2009, if all goes to plan, Microsoft will deliver Dynamics on a single platform rather than as four separate ERP suites plus CRM, the way Redmond currently sells the applications. The idea is to bring current users along slowly in the upgrade process as the single-platform product comes together.

"[Users] will one day wake up and find out little by little that the car got replaced one part at a time," says Mark Jensen, general manager of Microsoft Dynamics AX. "None of those processes will be a dramatic, radical surgery. We're investing heavily in upgrade tools to make that process as painless as reasonably possible."

What it means, Jensen says, is partners who came to Microsoft through any one of its acquired ERP product lines can soon extend their solutions to take advantage of the best features of the other three lines, and develop on Microsoft's standard Visual Studio tools rather than having to learn each product's legacy development environment.

The job isn't done yet. Rymer points out that scalability is a concern, but he also says that the integration with Office in the latest version of Dynamics CRM could be a sign of good things to come. "It's way more flexible and way more customizable than anything else that's out there," he says. "If that's an indication of the promise here, this could be huge for Dynamics."

Microsoft is targeting small and midsize businesses with Dynamics, and most experts agree that the SMB space is where the growth lies for ERP. But, with native integration into Office and a single-platform offering coming, partners might have the opportunity in the coming years to move up the food chain and sell Dynamics to larger enterprises bogged down with expensive SAP or Oracle implementations or looking to make a break from antiquated systems. Much will depend upon Microsoft's execution of its ambitious plans.

Office 2007: Business Intelligence Features
Business intelligence (BI) is hot. Gartner Inc., the Stamford, Conn.-based research and analysis firm, predicts that BI will be a $3 billion market by 2009.

BI applications cut through SQL code, giving non-technical users easy access to real-time reports on key metrics within a company or industry without requiring IT people to intervene in the report-creation process.

Microsoft is strengthening its stance in that space by building BI functionality into Office 2007, including the ability to create and track key performance indicators for business through a BI portal. Excel will also be a serious BI tool in the new version of Office. Through Excel Services, users of the spreadsheet application will be able to access, analyze and share information from data warehouses and enterprise applications.

Another key to the Microsoft BI strategy is Office PerformancePoint Server 2007, which includes functionality for facilitating processes such as scorecarding, analytics, planning, budgeting and forecasting and works with Office SharePoint Server 2007 and SQL Server. PerformancePoint Server will incorporate the advanced analytic and visualization technologies that Microsoft acquired when it bought Boise, Idaho-based BI vendor ProClarity Inc. earlier this year. Company officials say it will eventually be integrated with the Dynamics ERP suite.

Hypervisor Technology
Enough has been said about virtualization products and roadmaps from various vendors -- pioneer VMware Inc., chipmakers Intel Corp. and AMD Inc. and Microsoft. Without getting wrapped up in the specifics of Microsoft's OS-resident Hypervisor, slated for inclusion in Windows Longhorn Server, versus Microsoft Virtual Server versus Microsoft Virtual PC, ponder this:

In a recent published interview, Gartner analyst Tom Bittman shared his firm's prediction that virtual machines will account for 50 percent of x86 servers deployed in the next three years, leading to a short-term flattening or even decline in the x86 server market. Now there's something to wrap your head around.

Do you know of any other forthcoming Microsoft technologies with hot business implications? Let us know what you're watching most closely. Contact Editor in Chief Scott Bekker at sbekker@rcpmag.com and Senior Editor Lee Pender at lpender@rcpmag.com.