Against this background, I accepted the invitation, but stressed that I was mostly interested in a discussion of what Microsoft can do, or is doing, that is different to the pack, rather than covering the more obvious stuff we are hearing from the vendor community in general. I also thought it would be a good opportunity to get under the skin of how Microsoft is viewing the current economic situation and the spirit with which it will be operating as we look forward to 2009 and beyond.
Before getting into the discussion itself, it is probably worth recapping why it is relevant to pay particular attention to Microsoft. Quite simply, this boils down to the fact that it is the most prominent vendor in terms of incumbency. When we ask IT professionals about the suppliers that are important to them in our large scale research projects, Microsoft consistently comes top of the list, regardless of organisation size. Here, for example, is a plot of the results from a recent online survey (November 2008) of close to 1000 respondents.
This data happens to be based on an open, unprompted question. If you offer IT professionals, particularly more senior ones, a list of commonly incumbent vendors, you typically see Microsoft cited in over three quarters of cases as being important. This difference between prompted and unprompted in itself is interesting, in that even if you do not think of yourself as a ‘Microsoft shop’, so are not inclined to name Microsoft when asked an open question about important suppliers, as soon as you are prompted, it reminds you just how much of its stuff is embedded in your infrastructure. When considering how to respond to economic pressure, at some point, you are therefore likely to have to think about Microsoft and/or the solutions it provides that are relevant to your business.
If we turn this around, this places quite a bit of responsibility on Microsoft as a supplier as it touches so many organisations. And from a Microsoft perspective, one of the first things I discussed with Frazer was the challenge of responding to the needs of such a diverse customer base, which in the business sector ranges from self employed home workers to the largest multi-nationals in the world. There is then the variation in how and to what degree the squeeze is going to hit people, not just between different sectors and organisations, but even within them.
Given this, we agreed it was inappropriate to make the simplistic assumption that the blanket response to the down-turn will be obsessive cost cutting across the board. While it is true to say that most will have an eye on cost, many will also be looking to develop and invest in certain parts of their business to extend them or make them more effective. This will be particularly true if you see the economic climate as an opportunity to outmanoeuvre the competition or grab pieces of the market that are vacated by struggling incumbents. There are then fundamental imperatives such as ensuring the operation of your sales and marketing operation is as finely tuned as possible to make sure you win more than your fair share of business in a challenged market with fewer opportunities.
The point here is that it is necessary for us to think a bit more intelligently and holistically as IT professionals when considering how to respond to the squeeze, as summarised in the following chart from the abovementioned report:
This kind of view is useful to put some of the Microsoft related specifics I discussed with Frazer into perspective.
In terms of infrastructure optimisation, for instance, Microsoft’s recent emphasis on virtualisation is very relevant. It’s not so much that Microsoft has anything particularly new or innovative here by way of fundamental capability, especially on the server side of the equation. Indeed, there are more mature virtualisation players and solutions out there. The significance is that Microsoft is looking to lower the barrier to entry in terms of skills, complexity and economics, the idea being to not only deal with the requirements of large scale data centres, but to also bring simple cost effective virtualisation capability to the masses of small and mid-sized organisations that are yet to take advantage of this kind of technology.
The general theme of making things cheaper and more accessible also runs through some of the other plays highlighted by Frazer. Looking beyond IT operations to how technology can help the business deal with economic pressures, the spotlight quickly swings to mobile technology, unified communications, portal based collaboration, business intelligence, and so on. These are all areas in which Microsoft has attempted to provide easy ways for customers to ‘build out’ from their existing Microsoft infrastructure to improve workforce efficiency and effectiveness, both of which are important when the squeeze is on and getting the most from your people is a key imperative.
In practical terms, whether it’s extending access to Exchange with Windows Mobile devices, snuggling Office Communication Server (OCS) alongside Exchange to allow instant messaging, web conferencing, etc, or simply starting to make use of the embedded BI capability within SQL Server as the foundation for enabling better decisions, the spirit is one of delivering new capability in comfortable, incremental and ‘recession friendly’ steps.
These examples, and others around SharePoint, Office System and CRM, led to a discussion with Frazer about a couple of other things to consider.
Firstly, something that can be said about a lot of software solutions, but particularly applies to Microsoft products, is that only a fraction of the functionality they provide is actually exploited. We have already mentioned that SQL Server, for example, can do a lot more in terms of sophisticated information management and analysis than many IT professionals take notice of or even realise. And how many organisations out there are using Microsoft Office on the desktop as simply a collection of document editors, with SharePoint Services running in the network as a glorified file share? In this case, look beyond the obvious functionality and together these solutions represent a pretty capable authoring, workflow and collaboration environment.
The point here is that in the current climate, it is going to be worth a lot of organisations reviewing the degree to which they are getting the maximum value from their existing Microsoft infrastructure. With a little end user training or thought about policies and process, a lot can be achieved in terms of delivering incremental value to the business. With this in mind, Frazer highlighted the investment Microsoft has made in terms of online training, guides, templates, etc, much of which is available at no cost from www.microsoft.com. His view was that enabling customers to make the most of Microsoft technology represents a good win/win. The customer clearly benefits, but so does Microsoft, as organisations are much more likely to remain loyal and extend their investments in the future if they are getting good value from the solutions already in place.
The second discussion point that emerged from talking through specific propositions was around the way in which Microsoft products are often designed to work together. Frazer understandably highlighted the ‘synergies’ here, and I agree that there are many organisations out there that are happy to immerse themselves in a Microsoft-centric world to take advantage of the incremental value this can represent. However, our own research tells us there are probably as many organisations that are wary of selling their soul to Microsoft for fear of compromise and/or lock-in. It is not that they don’t see Microsoft as having strong solutions in specific areas, they just acknowledge that stronger solutions from competitors exist in others, and they like to qualify components objectively to ensure the optimum mix of technology.
With this in mind, my message to Frazer was therefore to make sure that the value of individual solutions was considered and articulated effectively so those looking to make decisions in a specific domain could compare like for like objectively. A good example here is virtualisation. While Microsoft has developed some decent server side technology in this space, it has a tendency to position an overall virtualisation proposition that encompasses the desktop also, all wrapped up in integrated management capability. It’s a great vision, but not particularly useful when server and desktop virtualisation plays are at different stages of maturity and acceptance, and are managed by different groups within the customer’s organisation anyway. As one response to the squeeze is to scope projects and investments even more tightly, trying to broaden the discussion is often going to be counterproductive.
The last topic I discussed with Frazer was less about the part played by technology per se and more about the mechanisms for acquiring it. We both saw a potentially important role for financing options and hosted solutions. We also agreed, however, that lack of awareness was one of the biggest challenges in both of these cases, particularly with regard to small and medium businesses. Here, though, Frazer highlighted one of Microsoft’s biggest assets, its channel of resellers, ISVs, etc, and alluded to efforts being made to enable partners in these areas. I am inclined to agree that solution providers on the front line dealing directly with the mainstream lower and mid-markets are critical to educating customers on the options. Given that a lot of the channel is so short on knowledge at the moment in these areas, however, and often even struggle with the more fundamental topic of Microsoft licensing options, it will be interesting to see how the channel enablement activity pans out.
Meanwhile, I have to say that I was pretty impressed with the down to earth and pragmatic nature of what I was hearing from Frazer. Quite a contrast to some of the idealistic, cliché and, quite frankly, ill-informed stuff we hear from some vendors on how best to respond to economic challenges. I guess as Managing Director, though, Frazer 'is that business leader’, who no doubt will have some challenges of his own to work through as Microsoft navigates its way through the difficult times ahead. Perhaps the empathy that stems from this is what keeps him grounded when it comes to discussing the hard stuff.
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