Vigano Sees Live Interest Growing
There's a new boss for the mid-market sector at Microsoft. In mid-September, 19-year Microsoft veteran Davide Vigano took over as general manager of the worldwide midsize solutions team, one of the software giant's most strategically important groups. He replaced John Lauer, who left after two years at that post to launch his own startup.
Most recently, Vigano served as general manager of the Small and Midsize Solutions & Partner group. Before that, he was the deputy general manager and business marketing officer of Microsoft Italy, where he was responsible for the enterprise sales group and central marketing organization. He was also general manager of public sector and healthcare for the enterprise solutions group from 1996 to 2001.
As he eases into his new post, Vigano sat down with Redmond Editor Ed Scannell to talk about his views on the opportunities with mid-market companies still facing Microsoft, the integration of its business and productivity applications and how he sees mid-market companies adopting Microsoft's upcoming Live offerings.
Q. How interested are small and midsize businesses (SMBs) in your upcoming Live offerings?
A. Vigano: From our research, there are three scenarios. The prevalent scenario today is the on-premise one where everything is physically installed locally. There are two other areas growing substantially. The first is the in-the-cloud scenario -- which are the Live offerings -- where nothing is installed locally. The second, which is growing faster than the other two, is a mix of those two where some applications are installed on premise and some apps are served up from the cloud but everything is managed in the cloud. It is this third scenario we are investing in heavily. And as a Microsoft partner, you can serve the IT generalist with that scenario effectively because as a partner you can install things like MOM [Microsoft Operations Manager] and then ask your users to install System Center Essentials to remotely manage their infrastructure in the cloud.
Q. Are you seeing larger users more interested in the Dynamics products? Some corporate users, just like midsize companies, like the easier install and lower pricing than Microsoft's enterprise products.
A. We're seeing a lot of interest there and for those reasons, especially with the Dynamics AX line, which scales pretty well. But we're not focusing on the largest enterprise accounts with these products. The product is not built for General Electric; however, it can scale very well for GE's children companies. And the Dynamics products work well with those of our competitors like SAP, so you could have a centralized ERP system at corporate headquarters and then one of the [Dynamics] systems in a subsidiary or overseas that has tight integration with the main system.
Q. How difficult is it to get the smaller companies and some of the midsize companies to invest in the new business applications you're bringing on?
A. We surveyed 800 companies and found out there's a direct correlation between IT spending and profitable revenue growth. It isn't so much about how much you spend, but how far you're willing to enable your people to solve business problems. The study showed that those investing more aggressively in IT had 30 percent more profitable revenue growth than those who were not investing aggressively.
Q. What sort of field research did you do among midsize companies to find out what they wanted in terms of the integration of your business and productivity applications?
A. Starting about 18 months ago, we asked people what they really wanted. There are 1.4 million mid-cap companies worldwide and it didn't take us long to discover that market is really underserved. It's like having three children. The oldest child is the oldest and the youngest is the youngest, so they're easier to deal with. The one in between is sometimes hard to deal with. So the enterprise customer and the very small customer do not have to tell you who they are and what they want. But the IT industry -- the software industry in particular -- has had a hard time serving midsize businesses because they either offer them an enterprise solution that doesn't fit and they have to grow into, or offers them a solution that doesn't scale. The bottom line is these 1.4 million businesses have the same complexity as an enterprise, but with just a few more resources than a small business.
Q. What is your biggest advantage over SAP or Oracle in going after this market?
A. I think it is easier for us because [SMBs] are closer to our core business than SAP. We do have two separate teams to focus on that market's needs -- one for the mid-market and another for small businesses. Many small companies do not have an IT staff and rely on partners. The higher-end midsize companies have a CIO and a staff, but even at the lower end of the mid-market many companies have an IT generalist. His job is a mile wide and an inch deep. He does everything a CIO and his staff do, from security and patching to applications deployment and help desk. Our research shows that most of the 1.4 million midsize companies have between one and five IT generalists. That is the person we are largely focused on.
Q. What are your goals for growth in this market?
A. The other person we look at is the business decision maker. Looking at the data on IT spending among mid-size accounts, it is about $250 billion overall with about $113 billion of that spent on software and services. So over $100 billion of that is influenced directly by a decision maker, and so there is lots of opportunity for us to extend our reach into this market.
Q. How is it going integrating products from Great Plains and Navision with Microsoft's productivity applications?
A. The reason we bought both of those companies is for the 20 years of experience they had in things we did not know enough about. There is this chasm between pure infrastructure IT products and business applications. Microsoft has a substantial knowledge base on collaboration and productivity applications like Office and Exchange and SharePoint, but we didn't have enough knowledge or expertise in the structure and business processes. So at the end of the day, what we are trying to do is to put those two worlds together in a people-centric view. I think it is something we offer.
Ed Scannell is the editor of Redmond magazine.