If you're one of those vendors that make extensions for Systems Center so that
the Microsoft management suite can monitor more than just Windows, you'll have
some new competition soon...from Microsoft.
System Center isn't just for Windows anymore, Microsoft revealed
this week. By the second quarter of next year -- yes, that's a year from
now, when Operations Manager SP1 comes out -- it'll manage Linux and Unix environments,
as well as VMware's ESX Server virtualization application. It'll also interoperate
with other management platforms such as HP's OpenView and IBM's Tivoli suite.
The forthcoming management extensions are available in beta now.
"We believe that customers want System Center to be their enterprise console,"
Larry Orecklin, general manager of server infrastructure marketing at Microsoft,
told RCPU in a recent phone chat. "It absolutely was driven by customers
-- more and more, System Center has become the standard for managing Windows
environments. Customers really liked the ease of use, the knowledge out of the
box and what they were able to do in a cost-effective way. It's been the No.
1 request to take advantage of those capabilities people have developed in managing
Windows and expand that to the rest of their infrastructure."
There's also a bit of an open source angle here, as Microsoft is using open
source network management protocols Web Services for Management and OpenPegasus
to develop its Linux and Unix management capabilities. Redmond also has a seat
on the OpenPegasus steering committee, Orecklin said. He said that Microsoft's
OpenPegasus participation is one of a growing number of signs that the company
is serious about working with the open source community.
"I'd call it a maturing," Orecklin said. "It's not what you
would have expected from Microsoft three or four years ago."
No, but things have changed since then, right? Whatever reason Microsoft has
for embracing open source -- and, in this case, there seems to be an entirely
practical one -- and whatever skepticism might exist in the open source community,
this opening of System Center makes total sense and should be a revenue producer
for partners. And, for those partners who might be threatened competitively
by the new System Center capabilities -- well, surely you had to see it coming.
What's your take on the new System Center capabilities? How will you sell them
to your customers? Chime in at [email protected].
Posted by Lee Pender on April 30, 20080 comments
We've
told
you in the past in
RCP the magazine about Microsoft Financing and
what it can do for partners, especially those that work with SMBs. Well, FYI,
there's a new wrinkle in Microsoft's financing story. Redmond now has an
independent
financial-services group deciding who's going to get the cash.
Posted by Lee Pender on April 30, 20080 comments
It's the
incontrovertible
rule of RCPU: No matter what happens, Microsoft makes more...Wait, what's
this? Microsoft
didn't
make more money in its most recent fiscal quarter? Well, not compared to
the year-ago quarter, it didn't -- but you know that by now.
Yes, by now, you've seen the results of Microsoft's third fiscal quarter of
2008 (but here
they are again, in case you haven't). And, by now, you've read
the news
stories, the blogs
and the commentaries
about how the software industry's money machine, which had been racking up massive
quarters as far back as we can remember -- or at least for the last couple of
years or so -- finally hit a wall.
Profit fell 11 percent in Q3 '08 compared to the year-ago quarter, and although
Redmond beat analysts' expectations, the first reaction the market had late
last week was to punish Microsoft's stock price. Especially weak were the company's
client division (basically Windows and Office) as well as -- to our surprise
here at RCPU -- the Microsoft Business Division, which is mostly made up of
the Dynamics enterprise software line. Both divisions reported revenue shortfalls
year over year. Microsoft's beleaguered Online Services Business (search, MSN,
various "Live" things and stuff like that) showed a bit of revenue
growth but also reported a bigger operating loss than what it had racked up
in Q3 '07.
The disappointing news unleashed a flurry of theories as to why Microsoft didn't,
after all, make more money in Q3. (On top of everything else, a
little helpful accounting actually gave the numbers a bit of a boost, something
that suggests that they could have actually been worse.) After scanning a slew
of online offerings, we found that most observers pegged Microsoft's shortfall
on one (or several) of a few simple factors:
- The end of Microsoft as we know it. Well, actually, maybe not; although
we read a bunch of blog entries that referred to "reports of Microsoft's
demise" and so forth being premature or inaccurate, we found that very
few pundits, if any, actually reported Redmond's demise. Probably the closest
thing we found to that sort of thing was here,
and it's pretty innocuous. And, no, we didn't search the open source or Mac
blogs. So, as often happens in the blogosphere, reports of the reports of
Microsoft's demise were, um, over-reported. Or something like that.
- Vista. The weakness in the Client division had a few commentators pointing
the revenue-shortfall finger at Vista, which is still failing to impress
in the enterprise. There might be something to this -- Microsoft keeps claiming
that it has sold 140 million Vista licenses, but as one
intra-Microsoft blogger mentions, we've been hearing that figure for a
while now. Are Vista sales slowing or stalled? Everything we hear and read
suggests that they are...and that could be a big reason why the client division's
numbers fell.
- Piracy.
Microsoft has struggled to rein in piracy in developing markets such
as China, and that semi-failure has led to all sorts of repercussions.
For one thing, in an effort to fight both piracy and open source competition,
Microsoft has been selling Windows and other software at discount rates in
some foreign markets, meaning (duh) that it makes less money on those sales
than it used to. Plus, Microsoft CFO Chris Liddell said himself that piracy
is hurting Microsoft's sales worldwide. It seems to be playing at least some
sort of negative role.
- The
economy. Could this be the first sign of the slowdown we've all feared
and dreaded and assumed we were already in? Maybe. That would certainly make
for a convenient explanation for Redmond, and IDC has been making noise about
IT budgets
dropping. Of course, we're not convinced that IT folks would spend money
on Vista even in good times.
- Yahoo. Mary Jo Foley cites
a lack of focus on Windows and Office -- caused by Microsoft's obsessive-compulsive
behavior toward Yahoo -- as a possible cause of Redmond's shortfall. This
makes sense to us, not only because Mary Jo says it but because as followers
of Microsoft news, we've been struck by how little Redmond has had to say
lately that didn't have the word "Yahoo" in it somewhere.
Whatever Microsoft's problem was, or is, it's not time for partners or anybody
else to panic. Some huge products are on the way -- think Windows Server 2008
and its buddies -- that should get everybody's cash registers ringing again.
What will be interesting to track is the trend of Windows sales; did Microsoft
have a revenue shortfall because of Vista or because Windows as an operating
system really is going out of style? Or was there some other reason? Stay tuned;
the next earnings report (Q4 and fiscal year 2008) is a big one.
Oh, and we're through making laws here at RCPU, just for the record.
Send your take on Microsoft's earnings, its future and all things Microsoft
to [email protected].
Posted by Lee Pender on April 29, 20081 comments
The PC makers are finding ways to
keep
selling XP, and, yes, we'll use any excuse we can to work an upside-down
exclamation point into RCPU.
Posted by Lee Pender on April 29, 20080 comments
Ugh,
this
sounds like a nasty mess. If you want to take out your frustrations about the
IIS
and SQL attacks that have hit about half-a-million Microsoft-supported Web
sites (so far), though,
don't
blame Redmond.
Posted by Lee Pender on April 29, 20082 comments
The non-news news of the day is that Microsoft
still
doesn't own Yahoo. We'll keep you posted on other things that aren't happening.
Posted by Lee Pender on April 29, 20080 comments
Today just seems like the kind of day made for reader feedback in RCPU, so
here goes.
Our e-mail of the week comes from Jim, a previous contributor whose area code
correlates to good ol' Fort Worth, Texas, home of your editor's alma mater.
Jim weighs in -- thoughtfully, we find -- on the Google-Salesforce.com
hookup and the impact it might have on Microsoft:
"About your article, 'Microsoft
and Google: Another Patriots' Day?', and online applications, my thought
on it has always been that Microsoft has a non-breakable advantage because
of the macros (VBA) in Office. Businesses of all sizes around the world have
proprietary Office-based applications they either developed themselves or
had developed, giving them an edge on competition that they do not wish to
give up or redevelop. My evaluations after using OpenOffice and Google Apps
is that I find them lacking since they cannot make use of existing Office
macros (OpenOffice can work with very simple macros). When you include regular
add-ins like XLAs and DOTs, plus COM add-ins and managed code add-ins, Google
apps, OpenOffice and others just can't compete in the business world with
Office.
"Also to be considered in the online application war is what effect
application virtualization will have. I have been investigating a number of
those and am impressed. With VMware
buying Thinstall, Microsoft purchasing SoftGrid and Calista,
Citirx XenApp, Endeavor's JukeBox and various others, plus continued increases
in bandwidth, application virtualization will be major technology. One can
have rich applications acquired via the Web -- which run just as well as if
installed -- cached for offline use and potentially brought up as one needs
them or for a longer period. These just may make Google Apps and others moot."
Wise words, we'd say, Jim, and we're not just showing Fort Worth-bias here
(although we do have a pretty strong one). The app-virtualization angle is especially
interesting, as that technology could potentially negate or at least diminish
some of the advantages of hosted applications. As for those macros in Office,
we're right there with you -- a product as familiar and universal as Office
isn't going to go away any time soon. We have a feeling that both Google-Salesforce.com
and Dynamics CRM Online-Office will find plenty of success in a growing market
for SaaS.
While we're doing this, what would a reader mailbag be without a couple of
comments on (you guessed it) Vista? We've had more e-mails about the beleaguered
OS than we can run here, so here's a sampling of some of what you've sent. Bob
starts us off with a bit of domestic trouble caused by Vista. Is there any problem
this OS can't cause?
"Before I will consider buying new hardware, I will replace failed
processors, motherboards, etc. before I ever go with Vista. For my personal
PC, one of the better Linux versions is a real possibility. For my old HP
laptop, I am guessing I can get by for years on XP. For my wife's system,
failure means rebuild the hardware before I replace XP. She hates changes,
and Vista's continued security prompts and incompatibilities are impossible.
I got in enough trouble when I updated her anti-virus software (free version)
with Kaspersky 7.1 and too many prompts really ticked her off. I would bet
that XP and Kaspersky are much more secure than Vista, too."
Hey, Bob, we hear you. You've got to keep everybody happy at home. Just call
XP the Dr. Joyce
Brothers of operating systems. (Is that reference too old? Should we have
gone with Dr. Phil?)
Nick sounds pretty frustrated, too:
"I'm running a dual-boot with XP and Vista. If Microsoft doesn't
pick up the speed getting Vista to rock, I'll most likely go with a Mac. I'm
tired of purchasing Microsoft's 'in-betweeny' software like Me and now Vista.
Perhaps I'll go with an ESX Server and run Mac Leopard or that dreadful penguin
junk. No more for me..."
But enough of the personal stuff. Tom's got real problems with Vista:
"My biggest client's wife bought a laptop with Vista installed. She
had a really great home network with a couple of wireless print servers, a
Small Business Server 2003 in the basement (for her photos and music), a Media
Center PC and high-speed Internet (FiOS). Guess what? The wireless print server
wanted to install drivers, but they weren't Vista-compatible. The laptop couldn't
see the server, so she couldn't get e-mail through the Exchange Server. The
Vista unit could see the Media Center PC but spontaneously rebooted during
the first file transfer between the two. I ended up calling Microsoft again.
I ended up quitting in vain, again. I ended up with egg on my face, again.
So, yeah...keep XP! I can't afford Vista. I can't afford to lose any more
clients!"
Yeesh, now that does sound like a nightmare. Wayne, however, is stepping in
as the voice of calm, telling us not to worry; Microsoft will extend XP's life,
he says:
"I've said all along that XP is the best OS that Microsoft has had
on the market, and now they want people to switch from a fast and stable OS
to a slow and unstable one. It's really pretty much of a no-brainer as far
as I'm concerned, and I'm not surprised that there's a
petition. Anyone that thinks that corporate clients are going to sink
a lot of money into a new OS in this current economic climate is crazy, and
Microsoft knows it. They will extend XP's life the same way that they honored
individuals with NT4 MCSE certifications after first saying that they would
have to recertify on 2000 or lose it."
We'll see, Wayne. At this point, though, we know that you're not alone in wanting
to see XP live a little -- or maybe a lot -- longer.
Have anything to contribute about any topic? Contribute at [email protected].
Posted by Lee Pender on April 24, 20080 comments
Partners worried about competing with Microsoft in the SaaS space have a little
less to worry about this week. The story's still a little light on details,
but Microsoft is
saying
now that it'll host third-party (read: partner) apps along with Exchange
and SharePoint.
Posted by Lee Pender on April 24, 20080 comments
While we're on the topic of SMBs, as we are today, now seems like a good time
to refresh your memory of an article that ran in the March issue of
RCP.
It was on a Microsoft program that allows customers to essentially rent Microsoft
applications. Curious? Nostalgic? Click
here.
Posted by Lee Pender on April 23, 20080 comments
In the second half of this year -- which is, after all, rapidly approaching
-- Microsoft will roll out a couple of major products for partners in the SMB
space. Windows Small Business Server 2008 and Windows Essential Business Sever
2008 are the cornerstones of Redmond's
revamped
server strategy for SMBs. SBS 2008 is for the really little guys; EBS is
for midsize companies. Simple enough, really.
What might end up being potentially less simple is understanding what each
server can do and developing sales strategies for both of them. On that front,
to the rescue rode Arlin Sorensen, president and CEO of Gold Certified Partner
Heartland
Technology Solutions, who organized last week's SMB
Summit in your editor's home town of Dallas to discuss Microsoft's new server
wares. Sorensen and a few other partners -- all Gold Certified, as it happens
-- sat down for a phone chat with RCPU last week about SBS and EBS.
SBS is probably familiar to most SMB partners, but EBS is a new kid on the
block -- a server not meant for the tiny startup but not appropriate for the
big conglomerate, either. It focuses on the hugely lucrative, constantly shifting
midsize-business market, and many of last week's SMB Summit's 460 attendees
got their first look at it in Dallas.
"A lot of partners are just starting to understand what EBS is about,"
Sorensen told RCPU. "The exciting thing that partners are starting to talk
about is they're going to serve a market that they've been afraid to enter.
It's going to allow a SBS partner to move up in the market."
But moving up can be a complex -- if potentially very rewarding -- task. Michael
Cocanower, president of itSynergy, said
that selling to midsize businesses as opposed to small businesses means talking
to entirely different audiences. Whereas the small-business owner makes most
of the decisions on technology purchases for his or her company, Cocanower said,
midsize businesses usually have IT people, financial executives and maybe even
CIOs who need to be convinced.
"The messaging that goes to these different audiences is different depending
on who it is," Cocanower said.
Added Sorensen: "The sales cycle is much longer in the mid-market space.
You have to be prepared to make more investment to get that larger sale. I would
definitely say there's a higher cost of sale, but that's offset by a bigger
opportunity. When you're serving a larger install base, there's going to be
more demands. They have higher expectations than a small business does."
One message that should resonate with just about any audience, though, is that
EBS works. Cocanower has a couple of partners running it as part of Microsoft's Technology Adoption
Program (TAP), and he's been impressed by the results he's seen so far.
EBS, he said, fills a gap that had existed between SBS and bigger offerings
such as Windows Server 2008.
"Today, because there is no product in this space, these medium businesses
are left with assembling the core business blocks that are out there,"
Cocanower said. "But there isn't anything that ties that together. EBS
provides that layer that rides on top of those products."
And Microsoft folks, perhaps not surprisingly, point out that EBS makes a great
upgrade from SBS: "A lot of customers need to upgrade from SBS, and Essential
Business Server is going to be an easy transition," said Aanal Bhatt, senior
product manager at Microsoft responsible for channel partner marketing, Windows
Essential Server Solutions. "Even in some of the smaller companies, because
there is quite a bit of complexity going on and SBS has not been the best fit,
EBS is going to be a great fit."
But SBS will still have a large customer base, too, and John Endter, president
of E Squared C, has already seen customers
involved in the TAP achieve results with the new edition of the server.
"We have it installed at a golf course," Endter said of SBS 2008.
"It's running their business. They had some key pain points working remotely
for the business owner. They had some staffing issues with schedules, general
business process issues. SBS corrected all that. It's definitely rock-solid."
Those are the kinds of reviews that partners waiting for the release of both
products will love to hear.
Posted by Lee Pender on April 23, 20080 comments
Microsoft's not un-hyped hybrid customer relationship management offering is
generally
available...right now. Dynamics CRM Online -- which offers customers an
on-premises deployment, a Microsoft-hosted option or both -- hits the streets
with a cheaper price tag and considerably more storage capability than those
of its biggest rival, Salesforce.com.
Brad Wilson, general manager of Microsoft Dynamics CRM at Microsoft, points
out that even though Microsoft is hosting the SaaS (or, in Redmond parlance,
Software+Services) version of the software, there are still plenty of opportunities
to jump in and customize Dynamics CRM online for customers.
"There's lots of different parts to a CRM project," Wilson told RCPU,
citing setting up data models, defining workflows and creating user models as
a few examples of services partners can provide to customers. "Server setup
isn't required, but all the things around domain expertise and best practices
are still there."
Plus, Wilson said, Microsoft will pay partners 10 percent of license revenues
in perpetuity for a Dynamics CRM Online sale. Some other vendors -- he didn't
specify which ones -- pay a 10 percent royalty only once, as a kind of finder's
fee.
"Our partners will get paid in a more generous fashion," Wilson said...and
that sounds like a good thing to us.
Posted by Lee Pender on April 23, 20080 comments