When Microsoft recognizes a challenge, the wheels of change start spinning
faster than a politician's PR team cleaning up after a nasty indiscretion. A
challenge the company is now tackling at that furious pace is the perception
that Microsoft can't compete with Google and Software as a Service (SaaS).
To address this challenge, Microsoft is integrating its individual products
with Web components in a model it calls Software Plus Services to create end-to-end
solutions such as unified communications (UC) and business intelligence (BI).
This competitive strategy is coupled with company-wide adoption of System Center
and Windows PowerShell for an integrated management model. Recent announcements,
especially of Microsoft Exchange Server 2007 SP1 and Microsoft Office PerformancePoint
Server 2007, are interesting in light of this integration.
Exchange 2007 SP1
When Microsoft explains its Software Plus Services vision, the company invariably
holds up the model of Exchange Server's integration with the Outlook client
and Outlook Web Access. But Exchange's role in Microsoft's future strategy goes
beyond email into the realm of the next "killer app," UC. The August announcement
of a Community Technology Preview (CTP) of Exchange 2007 SP1 pounded home the
UC message, stating, "SP1 will drive added value for our customers, further
establishing Exchange Server as the foundation of a unified communications platform,"
which includes email, voicemail, IM, and voice and video communications.
According to Ray Mohrman (group product manager, UC), SP1 adds support for
Windows Server 2008 and Windows Vista. SP1 lets you manage Exchange from a Vista
machine by using PowerShell, Microsoft Management Console, and the Exchange
Server Best Practices Analyzer. Additional SP1 features include new Microsoft
ActiveSync policies for synchronization, authentication, and encryption. SP1's
Standby Continuous Replication feature uses Exchange's log file shipping to
continuously replicate mailbox data to a standby server, which can quickly be
activated if the primary server is offline. In the area of security, SP1 integrates
with Forefront Security Server SP1 and provides IPv6 support with Server 2008.
But the focus of the announcement seemed to be on integration with Microsoft
Office Communications Server 2007 (OCS—the heart of the company's UC
product line). SP1 enables one-click retrieval of voicemail messages from the
OCS client, Microsoft Office Communicator 2007, and allows Communicator and
Communicator-enabled phones to alert users to new voice messages.
The importance of SP1, according to Microsoft, is in "addressing the overall
communications and collaboration needs of companies." With the complete UC solution,
Microsoft has a competitive position that Google and SaaS competitors can't
approach: a comprehensive set of products that can be assembled as end-to-end
solutions, starting with the OS and extending through the communications infrastructure
to systems management, data and storage, and end-user productivity.
PerformancePoint
Microsoft quotes IDC's research finding that the overall BI market grew by more
than 11 percent in 2006, while Microsoft's BI revenue grew 28 percent, the highest
growth rate among the top 10 industry players. For Microsoft, BI isn't just
an opportunity to release new products such as PerformancePoint. Rather, BI
represents an opportunity to sell a solution that consists of several individual
products: Windows Server and Microsoft SQL Server on the back end, with Microsoft
Office PerformancePoint Server 2007 and Office applications such as SharePoint
and Excel on the front end. Don't be surprised to hear soon about how Microsoft's
BI solution will have Software Plus Services components and System Center–based
management.
Together at Last
The biggest obstacle Microsoft faces to competing with Google and SaaS is its
business model. Microsoft can add online services to its software products but,
unlike Google, still has to protect revenue from traditional software.
However, Microsoft has a strength that none of its competitors (except perhaps IBM) can touch: a broad range of
products that can be assembled to form end-to-end solutions.
Most important, Microsoft has an experienced customer base
that has already invested in learning Microsoft skills. That skill
base makes it easier and cheaper for customers to stick with
Microsoft than to invest in learning non-Microsoft products.
By unifying the Microsoft stack with a common management model and providing end-to-end solutions, Microsoft
is betting that it can leverage its mature and emerging products and build on existing customer knowledge to outflank
competitors. What do you think? Is it more cost effective
to adopt Microsoft's solutions than to try out competitive
offerings? I'd love to hear whether you agree.
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