Category: Microsoft
November 21st, 2009
Taming the Chatter cloud
Not attending Dreamforce, it appears I missed a telling moment, the irony of which I would have enjoyed had I been there to witness it in person. It seems Salesforce.com has announced a new feature named after that most social of activities, Chatter, which aims to bring to the enterprise the functionality seen in social network tools such as Twitter and Facebook. But as Marc Benioff later told a gathering of press and analysts, it’s not a social network, oh no.
As I wasn’t there I can only go from what’s been reported. But it seems Benioff (no doubt guided by his marketing advisors) has decided to follow the advice promulgated at the recent Enterprise 2.0 conference in San Francisco — by no less a figure than Enterprise 2.0 guru Andrew McAfee — not to overuse the word social in front of business software buyers when talking about, erm, social computing. “I have rarely come across a word that has more negative connotations to managers in enterprise organizations,” McAfee warned his audience two weeks ago.
Benioff this week was devastatingly forthright about why social isn’t going to figure in his sales team’s lexicon when they tell customers about Chatter. According to VentureBeat’s Anthony Ha (my emphasis added):
“Salesforce was careful to position Chatter as a collaboration tool, not a ’social this or social that’ because there’s such a glut of social networking tools, he said, and customers are more willing to pay for collaboration software. ‘We really want to talk about collaboration, because that really is a budget item for our customers,’ Benioff said.”
So there we have it. Chatter’s going to be positioned as a collaboration tool, because that’s what customers are willing to pay for. I can still see problems ahead for this product, on three fronts, but let’s deal with that positioning question first, because I have quite strong views about it.
Interestingly, Microsoft seems to share no such qualms Read the rest of this entry »
November 5th, 2009
Microsoft cuts BPOS price to squeeze Lotus
While most observers portray Microsoft’s sortie into online email and collaboration services as a titanic battle to keep Google off its productivity applications turf, the real target of this week’s price reductions is IBM’s Lotus unit. In a briefing earlier this week, Ron Markezich, corporate VP, Microsoft Online Services told me that most of his team’s customer wins are at the expense of the IBM division: “Seventy-five percent of our enterprise customers are coming from a non-Microsoft platform — predominantly [Lotus] Notes.”
The half-price reduction for hosted Exchange seats (from $10 to $5 per month) and a one-third cut in the cost of the full BPOS suite (from $15 to $10) is designed to keep those deals flowing through. IBM earlier this year introduced its own hosted LotusLive iNotes service at an aggressive $36 per user per year. Microsoft’s old pricing was at a level destined to give prospects pause for thought. At $60 per year, it’s close enough to raise fewer objections. The lower pricing will surely help, too, in those cases where Google’s $50-a-year service is the competition.
Interestingly, we now have a market price established for online corporate email services in the $35 to $60 per year range (indicative of a new price range for all categories of enterprise software?). As Microsoft VP Chris Capossela told CNET’s Ina Fried, “it’s the price that customers are really excited to buy our suite at … We’re pretty excited about the price and not so much focused on free services or the price Google or others might charge.” You bet.
Microsoft execs were happy enough to focus on Google when it came to throwing brickbats this week. Every briefing seems to have included a drive-by shooting directed at Google. “It takes more than a few billboards to win enterprise accounts,” Markezich told me, in a reference to his rival’s current ‘Going Google’ ad campaign. “There’s been a lot of investment in billboards. I question how much investment there’s been in enterprise capabilities.”
There’s also been a concerted effort to question the size of Google’s paying customer base. While Gmail is hitting the volume mass market, Microsoft currently has the edge in large enterprise accounts. Google spent a lot of PR dollars to promote its recent win of a 35,000-seat account at Rentokil Initial, along with its 30,000-seat contract with City of Los Angeles. Microsoft Online Services is currently scoring much larger wins, including a 110,000-seat implementation at pharma giant GSK, a “large number” of which are already deployed, Markezich told me. He also disclosed the existence of a much larger, as yet unnamed customer, currently “in the midst of deployment” to more than 300,000 users.
October 12th, 2009
The cloud: no place for amateurs
The boss of Air New Zealand has given us a convenient term for companies that can’t get to grips with the realities of delivering computing as a service: “Amateurs”. His reported comments were addressed to IBM, which failed to restore operations at a mainframe data center in a responsive enough fashion after a major outage on Sunday:
“In my 30-year working career,” he reportedly emailed the hapless vendor, “I am struggling to recall a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologise to its client and its client’s customers.”
T-Mobile is another reputable company left looking amateurish today after the catastrophic loss last week of all user data stored on its Sidekick service. But the real amateurs behind this story appear to be Microsoft and Hitachi, who are believed implicated in a server failure that took out both the production and backup databases on the storage network where Sidekick data is stored.
To read a contrasting story that shows how cloud outages get handled professionally, check out Michael Krigsman’s post last week about the recent 15-hour outage suffered by on-demand ERP provider Workday. Here, too, a network storage device caused a total meltdown, shutting itself down when it detected a corrupted node in a backup disk. Workday avoided Sidekick’s fate by invoking its disaster recovery plan. It avoided IBM’s fate by acting rapidly and going out of its way to keep its customers informed.
As I’ve often written in the past, big, established companies frequently over-estimate their competence at cloud computing and SaaS, simply because they fail to realize it’s far more than just a repackaging of what they already do. Unfortunately, their inability to grasp the emerging as-a-service business model and the demands of cloud-scale computing leave them performing like amateurs. The pity of it is, their arrogance and incompetence undermines trust in all cloud computing providers, even those that take their responsibilities seriously.
July 8th, 2009
Microsoft, hoist by a Chrome petard
As one Talkback commenter recalled during the discussion of my post earlier this week on free as a business model, Microsoft long ago used free as a weapon to capture the nascent Web browser market:
“Remember in 94 when Microsoft suddenly realised they had completely missed the internet boat? Netscape was THE browser, Microsoft didn’t even have a browser. Solution? Freemium it! Microsoft went to Mosiac … Then they shafted Mosaic and Netscape all in one go by giving the browser away ‘free’. Mosaic, who did all the development effort for what is now IE, were shafted. Netscape were also shafted. So there you have a lesson on how ‘free’ is done.”
Now Microsoft is shafted by the same tactic (or, in the Shakespearian idiom, ‘hoist by his own petard‘ — a petard being a medieval word for a bomb). Google’s new Chrome OS (see Techmeme discussion) will be a free-of-charge, open-source competitor to the Windows operating system, which is such a cashcow for Microsoft that its license fee is routinely described as a ‘tax’ on PC owners.
I’m old enough to remember when Microsoft worked with Intel and Compaq to make an end-run around IBM back in the late 1980’s, sabotaging the larger vendor’s abortive attempt to create a new PC operating system called OS/2 that would be a successor to the older PC-DOS developed for IBM by Microsoft. Windows triumphed over OS/2 because IBM moved too slowly and was too internally focused on its own roadmap for developing the PC to understand Read the rest of this entry »
April 23rd, 2009
Microsoft's software-plus-services disinformation
My blood boils every time I hear some Microsoft executive crowing about its so-called ’software-plus-services’ model. Microsoft’s FUD around S+S is deliberately muddling up two very different things. I fumed when I read this comment in an interview last week by Chris Capossella, senior VP of the group that oversees Office, in which he singles out Google’s use of Gears technology to enable offline use of its cloud-based applications:
“I thought the whole point [of the software-as-a-service model] was that I didn’t have to download anything,” Capossella said. “These guys are totally adopting the software-plus-services approach, but they just aren’t using the term. And no one’s calling them on it.”
This is so lame as a line of attack, and yet it’s a favorite at Microsoft, as if Google’s decision to take advantage of the compute power that’s there on the client justifies in one fell swoop not only Microsoft’s entire legacy stack of desktop-bound applications and operating software but also the whole gamut of its extended server family. Extending cloud-based services so that they’ll run locally in a few limited use cases is in no way equivalent to Microsoft’s policy of encouraging its customers to keep buying and upgrading their installed base of server and desktop software in return for assurances that the vendor has a strategy of offering the “choice” of cloud-based equivalents.
My opposition to the ’software-plus-services’ mantra is that it puts the cart before the horse. If you’re going to do cloud computing right, you have to start with services. I wouldn’t be debating this with Microsoft if Read the rest of this entry »
March 2nd, 2009
Microsoft pumps cloud, trumps Google with GSK
Announcing a 100,000-seat deployment by pharmaceuticals giant GlaxoSmithKline (GSK), Microsoft Online Services — the software vendor’s hosted Exchange, Sharepoint and LiveMeeting division — today stepped up its validation of cloud applications at the same time as making Google Apps’ 15,000 seats at biotech leader Genentech look small by comparison.
Not only that. Ron Markezich (pictured), corporate VP of Microsoft Online Services, was scathing of Google’s efforts to make headway in the enterprise market. “Google we really do not feel is ready for the enterprise,” he said in a call briefing bloggers on the announcement an hour ago. “They’re offering three-nines SLA and they’ve missed three of the last six months,” he added, referring to last week’s Gmail outage and earlier incidents. In a sideswipe at Google’s offer of a 15-day credit for last week’s outage, he went on to add that Microsoft maintains its services at four-nines availability, while backing up its three-nines SLA with financial penalties: “We don’t just give service credits, we give hard dollars if we miss an SLA.”
He went on to dismiss Google in terms that made the search and contextual advertising giant sound like little more than a minor irritation in Microsoft’s competitive landscape. “Pretty much all our major customers are trialing Google Apps, but they’re buying Microsoft Online Services,” he said, reeling off a list of blue-chip names that have recently signed up for Microsoft’s online applications — Phillips, Ingersoll Rand, Pitney Bowes, Aviva. Those others who had chosen to go with Google had made a poor choice, he went on to imply. “They’ve just chosen to take email and use a consumer service that’s not enterprise-ready,” he said.
The GSK news has been timed to coincide with the launch of Online Services in nineteen countries worldwide (also see Mary Jo Foley’s write-up), along with the release of the Office Communications Online instant messaging and presence service ahead of its original schedule. The new services are Read the rest of this entry »
January 5th, 2009
Debunking myths about the SaaS partner channel
There are a couple of widely-held myths about the SaaS partner channel that I saw being debunked in the closing months of 2008. No, neither of them were the hoary old myth that SaaS vendors don’t need partners because they can use the Web to sell direct — the dot-com bust proved that one wrong. Solution providers are still alive and well on the Internet, but to succeed they have to ignore some common preconceptions. Here are two statements I often hear from vendors and other experts when talking about SaaS:
- SaaS vendors need channel partners because customers will only buy business solutions face-to-face
- SaaS partners have to run lean operations because their margins are slimmer
Both of these assertions are just plain wrong — and I have to confess, that’s not something I would have expected until I heard the evidence.
First up is the assertion that SaaS business solutions have to be sold face-to-face. I heard this point made very firmly by SAP last year talking about its experiences with its Business ByDesign offering. It had originally hoped this would be bought self-service via the Web, but later found it required at least a day’s face-to-face requirements discovery. This led SAP to conclude that it would have to rely on partners with specialist vertical expertise or existing local trust relationships. It seemed a logical conclusion, knowing that another SaaS business suite vendor, NetSuite, operates a network of regional sales offices precisely so that it can be close to its customers.
But then in November I moderated a solution provider discussion at the SIIA OnDemand conference in San Jose, in which four solution providers who work with, respectively, Intacct, Intuit, NetSuite and Microsoft, spoke from their own extensive experience. There’s a very good video of the complete session online now. The most surprising insight of this very informative panel discussion was that SaaS solution providers are getting smart at using the Web to sell, close and deliver solutions remotely — often without any face-to-face contact at all. What this tells us Read the rest of this entry »
December 8th, 2008
Microsoft: cloud tomorrow, jam next year
If you ever wanted proof that Microsoft is still a conventional software vendor down to its bones, take a look at the release cycles it chooses for its big cloud announcements. Whereas real cloud vendors release working services in beta on the same day they announce them, Microsoft simply announces what it’s going to do a year or two off in the future. Has it learnt nothing in three years of promising a new ‘live era’ of software?
At the time of the launch of Microsoft’s cloud platform, Windows Azure, Ray Ozzie confessed that “the maturity of the things that we’ve got on them as this point in time is limited. It will be a different story a year from now. But I wouldn’t want to hold it for another year. So, we’re getting in the game.” There’s a lot still to do. It’s early stage, no one knows if it will pay, and anyway. do you trust Microsoft?
But while Azure is bad, the planned Office-on-the-Web offering, Office Web Applications, is far worse — even more so now that the truth has emerged about its internal-only ‘technology preview’: “It’s currently being used by fewer than 1,000 Microsoft employees, as part of a test that started last month and is slated to go through February,” CNet’s Ina Fried revealed on Friday. “Consumers won’t be able to try a test version of the products until sometime next year”. Mary Jo Foley reckons the production release will come sometime in 2010.
When the product was announced at the end of October, Microsoft director of communications Janice Kapner told me that customer expectations were shifting and the company was working “to respond to customer need.” It needs to work faster. These long-term lead-times do nothing to inspire confidence.
At a blogger roundtable following last month’s Online Services launch of Microsoft-hosted Exchange and Sharepoint, it emerged that one large customer has asked for a 10-year contract to assure Microsoft’s commitment to continuing to provide the service. “A lot of customers are concerned we’re experimenting and we’ll just kill this,” affirmed a senior member of the Microsoft Online team. “We need to do a better job of communicating this. We see this as the future of the company.”
December 5th, 2008
Don't bail out autos, invest in cloud!
Microsoft last month launched US availability of its Online Services (Microsoft-hosted email and collaboration software, available on subscription). I snuck into a blogger roundtable held at the event and felt privileged to witness the spectacle of a team of Microsoftees celebrating the benefits of moving applications to the cloud. Of course they maintained the official mantra that customers have the choice whether to stay on-premise or go to the cloud. But hearing how delighted customers are to bypass the horrors of on-premise implementation and the upfront costs of conventional licensing, I wondered aloud how many are ever likely to choose to go back on-premise once they’ve experienced a cloud deployment.
Privately I wondered also whether even Microsoft has the cash to fund large numbers of its customers moving to the cloud model — in which the vendor, rather than the customer, takes on all the upfront cost of building and deploying the computing infrastructure. In a keynote at the SIIA OnDemand conference the following day, Omniture’s CEO Josh James highlighted the horrendous cash demands that weigh on pay-as-you-go computing providers. It struck me that, if SaaS and cloud really do take off — and many people are saying, supported by anecdotal evidence of rising sales this past month or two, that recession will accelerate rather than delay uptake — then the entire industry could face a cash crisis in a few years’ time.
Estimates vary, but the global software industry probably generates annual revenues of about $500 billion. Industry analysts are saying that up to 25% of new software sales will be delivered as SaaS within the next few years. That implies a shortfall of some $100 billion of license revenue that won’t be collected upfront any more, along with whatever it takes to buy and set up the infrastructure to operate it — maybe another $100 billion?
These are scary numbers, and others can do a better job than I of validating them, but let’s say they’re even half accurate. Will the industry have enough nerve collectively Read the rest of this entry »
November 17th, 2008
It's different, developing to the cloud
One of the hidden secrets of platform-as-a-service is how dramatically it changes the development process. Instead of expending energies on building and managing infrastructure, developers can concentrate on the end result, and they can get there a lot faster because of the collaboration and resource sharing the cloud platform allows. This was one of the big takeaways from some research I did recently for Appirio (disclosure: for a fee) that resulted in a white paper and webinar.
But don’t take it from me. Amitabh Srivastava (pictured), corporate VP of Windows Azure, Microsoft’s cloud platform, says the same about developing on the cloud. “It was a mental switch — it’s a very different mindset,” he told me in a recent phone interview. Formerly codenamed ‘Red Dog’, the Windows Azure cloud platform was developed on the Azure cloud — what you might call eating your own ‘Red Dog’ food — and Srivastava told me that not having to worry about infrastructure is one of the key benefits of using the cloud.
“IT at the moment spends all its time managing the machines,” he said. “In Windows Azure, we manage the service, not the machine. That’s how you drive the total cost of ownership down. That’s how you address the expense.”
Srivastava was talking after we’d finished recording a podcast interview for my new blog on The Connected Web, published at eBizQ. The podcast is in two parts: the first covers Azure’s origins and enterprise focus, while the second looks at the Azure roadmap and what developers can do with it today. During the interview he mentioned the team doing its development on the cloud platform.
The other benefit of cloud development that he singled out was the way that having a shared platform simplifies the workflow around collaboration. “Collaboration becomes easy,” he said, because developers can bring up an instance at any time and share what they’ve been working on. “You have this infinite pool of stages available to you.”
Phil Wainewright is a commentator and strategist on emerging software industry trends. See his full profile and disclosure of his industry affiliations.
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