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
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
"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
And Rymer says that's where partners should be looking to profit -- by
building front-end interfaces for back-end applications through Office
"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
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
"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
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
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
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
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.
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
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.
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.
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
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 [email protected]
and Senior Editor Lee Pender at [email protected].