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Microsoft Realignment Repercussions

Microsoft announced a major reorganization yesterday, lumping each of its seven business units into one of three groups, each with its own president. "We need to improve agility," CEO Steve Ballmer told the New York Times. That makes sense, if agility amounts to streamlining the chain of command. In practice, however, I’m not sure three big divisions will be able to make decisions faster than seven smaller ones.

For partners, however, there’s a bigger issue in play, that being the new role for CTO Ray Ozzie. The father of Lotus Notes will now be charged with exploring how Microsoft can deliver more software as services. A few years ago, companies in that business were called "application service providers," or ASPs. After most of them failed miserably, you don’t hear that term much anymore. Still, what Microsoft is talking about appears to be the same idea and companies like Salesforce.com have proven it can work. But if Microsoft gets into services, it will mean competing with and taking revenue away from partners. Or is Microsoft talking about helping its partners deliver software as services? Both? We’re not sure, and we’re not sure Microsoft is, either.

Microsoft, Qwest Strike Services Deal
The realignment wasn’t the only potentially bad services-related news from Microsoft this week. Yesterday the company announced it’s working with Qwest Communications to offer a voice-over-IP service to small and medium-sized businesses. Qwest will integrate the Microsoft Solution for Enhanced VoIP services with its own suite of VoIP services to create a package that includes voice, e-mail, Internet access, collaboration, presence, instant messaging and desktop services. The services are expected to be available next year. Given that the Microsoft Solution for Enhanced VoIP Services provides hosted versions of Microsoft server products including Exchange, Live Communications Server and SharePoint Services, this once again seems to be at odds with partner efforts to sell and service such offerings in the SMB market.

Alacris Acquisition Adds Smart Card Tools
For partners in the security field, Microsoft’s announcement this week that it’s buying Alacris is good news. Alacris makes tools to help provision, configure and administer smart cards, and Microsoft plans to incorporate them into its existing authentication and identity infrastructure. Smart cards haven’t exactly caught fire, but it’s getting easier to make the case as prices come down and security concerns go up. Tools like those from Alacris should further help partners make that case.

PDC Highlights
One of the better pieces I’ve seen coming out of the Professional Developers Conference last week was penned by Gregory Michetti, a systems integrator in Alberta, Canada, who writes for the Cnews Web site. Michetti offers thoughts on key features of Vista, Office 12 and the Expression Web design tools that he saw demo’d at the show. One example: "You will able to plug in your 512MB USB memory stick and as soon as Vista recognizes it, the PC suddenly gets another 500 megs of memory (RAM)."

Microsoft Sues Alleged Software Pirates
While it’s not as much fun as seeing virus writers get locked up, it’s good for partners to see Microsoft being vigilant about catching companies that sell counterfeit software. This week, Redmond launched lawsuits against eight firms that it alleges have done just that, two of which it says are repeat offenders.

Database Mirroring Not Ready for Production
When SQL Server 2005 ships in November, it’ll include what is essentially still beta code for one key feature: database mirroring. Tom Rizzo, director of SQL Server product management, says not enough beta testers have weighed in on the feature yet and Microsoft is thus uncomfortable with declaring it "rock solid." Customers can still use the feature but will have to go through some extra steps to turn it on.

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For Improved Security, Type Softly
As if we don’t have enough security problems, now the Boston Globe reports that computer scientists at the University of California at Berkeley claim they can crack passwords simply by listening to you type, using off-the-shelf microphones and a program designed to recognize human speech. Order your smart cards today!

Your Turn: Let's Fix Licensing
One of the stories recently posted to RCPmag.com from the September issue of Redmond Channel Partner magazine is the results of our partner survey. And one of the findings that jumped out from the survey was that licensing and pricing issues are the number one customer complaint. Check out my Partner Advocate column for the full skinny, then drop me a line at pdesmond@rcpmag.com to let me know what you think should be done about licensing and pricing issues. We’ll be sure to let Microsoft know.

Posted by Paul Desmond on September 21, 2005 at 11:53 AM