James Bannan: Where do you see the challenges in educating customers about the potential of Server Foundation? Is this a challenge which Microsoft is taking on, or is it in the hands of the OEMs, or a combination of both?
Bill Hilf: It is a combination of both. Helping people understand what a server can do for them is a critical component, so there’s a base education need which is definitely a joint effort between us and the OEM. OEMs decide on the final pricing, but as they’re also the point of contact for the customer, they need to be able to bring together the message about the benefits of a server product and tie it to a practical solution. OEMs are extremely excited and energised about Server Foundation because it brings a server solution right down the price chain.
James Bannan: The close ties between the currently-available RTM and RC client and server products in terms of kernel version and driver model offers a much more powerful platform for both developers and customers. What are some of the particular advantages in this relationship that you see?
Bill Hilf: The driver model is incredibly important. The ability to connect any device or install any piece of software and have it just work is very powerful, but obviously it depends on the right underlying framework and ecosystem. One of the things I recently learned about the Australian market was the tremendous amount of small businesses—it’s almost a “Small Business Country”—and with so many of those businesses based at home, being able to offer familiarity, compatibility and ease of use is crucial. When a user’s notion of a computer is a desktop or laptop, we need to be able to guarantee that this will transition to our notion of a server—it’s a critical component of making Server Foundation successful, especially as we haven’t catered to that class of business before.
James Bannan: The term “cloud computing” gets bandied around a lot in the consumer space as well as in the enterprise. Is it something you see as ever becoming a “something for everyone” solution, or will it just be another infrastructural option?
Bill Hilf: With the economic downturn we’re seeing some interesting behaviour from customers. Typically, budgets are being cut and, unfortunately, so is headcount. So the ability to have a seamless IT infrastructure across desktop, notebook, and mobile devices and have a uniform model for servicing and supporting that environment is very important, and we’re actually seeing a growth in our business because of that need. To that end, our market share with Windows Server puts us in a good position to service a broader set of needs, but it’s also introduced new challenges for us in trying to understand how customers move up and down the business ladder.
The traditional understanding was that businesses get bigger and everyone makes more money but this is really not the case. The feedback coming from customers is that they have no plans to expand in the near future but they are very interested in cost savings, which is why virtualization has been such an interesting growth technology. We need to be able to offer solutions which have a very quick ROI turnaround.
Typically, complex technology comes with a significant people cost. There are two main items on any IT manager’s budget sheet which have been there at least as long as I’ve been in the business—people cost and power cost. If we can show a short-term turnaround in cost savings on either or both of those items, within one or two quarters, we beat the competition day and night. That’s not just against competing operating systems but competing vendors—VMware, Oracle, IBM Software Group—we continually beat them in deal after deal because we can offer short-term ROI value against those key metrics And cloud computing comes in to assist against those metrics – it’s another string to the bow.
James Bannan: You mentioned Microsoft’s ability to compete aggressively against other solution providers. It’s been more apparent recently that in its advertising campaigns, Microsoft is now explicitly stating which competitors it’s taking on. Does this change represent a new, no-holds-barred approach to marketing?
Bill Hilf: Personally, I like to take a no-holds-barred approach and occasionally I get into trouble for that! Certainly there are brand battles happening in the advertising space where we are fighting for popularity and to show that we’re not some old-fashioned desktop operating system. I’m not that well-versed in consumer advertising to comment in depth, but on the enterprise side, I think that what is particularly ironic is that we will look back years from now and see how customers asked us to help drop prices against VMware, whom they see as very expensive and highly proprietary. Our high-volume value proposition is extremely competitive against VMware and day after day we receive feedback about people moving from VMware to Microsoft or choosing Microsoft over VMware for new projects. Fundamentally, this momentum puts a lot of wind in our sails to get out into the advertising space with a lot of confidence in our ability to deliver better products at better prices. This resonates very well with customers.
Microsoft is in a new era now. Many of the Microsoft leaders are highly competitive people. We want to get out into the market, not be shy and not hide from our competitors. We think we can compete strongly—I’ve done it for years on the Linux and open source side. In the past we have been somewhat hesitant to be outspoken in the marketplace and in advertising and our competitors certainly took advantage of that. It’s time for us to start telling our story again.
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