Napera CEO: Microsoft's New Openness Worked for Us

"I think they've bought into it," Hooper told RCPU in a phone chat recently. "I don't think it's a smokescreen or anything like that. They started working on this stuff in 2006, and they were anticipating what was to come."

What was to come, of course, were massive fines from the European Union, which rebuked Microsoft for charging too much for server protocol licenses and basically carped that the software giant was making it too hard for other vendors' wares to work with Microsoft's stuff. Microsoft lost a court appeal in September and had to pony up for fines levied years ago. Then, in February, to coincide with Microsoft's big server launch, the EU dropped another punitive bomb on the company.

So, what does Hooper have to do with all of this? Well, his company sells an appliance that sits on the edge of a network, monitoring network health and letting businesses know just who's using their networks. The new tool is based on Microsoft's Network Access Protection architecture (hence the "Nap" in Napera) and, Hooper said, can actually eliminate the need to deploy Windows Server 2008 -- although the appliance also works with the new server. Thus far, that hasn't been a problem for Microsoft, Hooper said.

"The support from Microsoft has been great," he said. "It's possible that a customer could buy our product and not buy Windows Server 2008, which obviously could hit their bottom line but we've never heard anything from them about that."

More to the point, the Napera appliance uses two protocols, DHCP and 8021x, to communicate with Microsoft technologies. Before the EU's first fine came down via the September court decision, royalty fees were heavy for protocols such as those, Hooper said. But "the royalty numbers dropped dramatically after the EU decision in September," Hooper said. "This year, [Microsoft has] gone even further by taking out the trade secret license and making a patent license."

That means that Napera has access to protocols much more cheaply and easily than it did before. And for Hooper and Napera, that's been a big boost.

"It's a big deal that Microsoft offers this sort of thing at all," Hooper said. And it hasn't been all about the EU, either. "You could tell from 2007 that they were in the process of change, culminating in the changes in September-October. The last couple of years, there's been a radical change in their attitude. Microsoft has made it pretty easy to do the right thing."

You might think, then, that Hooper is a big fan of the EU and its oversight. Actually, not really, as he writes in his blog on the company's Web site. Yes, some of Microsoft's policy changes have helped his company, but Hooper believes that the latest round of EU fines -- levied conveniently on a huge launch day for Microsoft -- went too far.

"I was very cynical about it -- I was hugely cynical," Hooper said of the EU's late-February bombshell. "The customer is ultimately paying Microsoft's fines. The fact is, Microsoft has a large number of software patents. If you're commercially implementing something Microsoft has a patent on, you could argue that the right thing to do is pay a patent fee."

And then, Hooper, in our favorite part of the interview, started to sound like a rant from RCPU when discussing the EU's pursuit of Microsoft: "Where does that path end? Does it end with giving everything for free? That's an issue of national sovereignty. I'm not really understanding why there's continuing friction [between Microsoft and the EU]. I don't see big European companies giving away patent licenses for free. They tend to be as bad as or worse than Microsoft. It's starting to feel a lot like [the EU is] trying to take Microsoft down a few pegs."

Yes, Todd Hooper, it is. And you're proof that it's not just folks inside the walls of Redmond who are defending Microsoft's openness.

How convinced are you by Microsoft's new openness? Let us know at [email protected].

Posted by Lee Pender on 03/18/2008 at 1:21 PM0 comments

Convergence: 'We Have Concluded Project Green'

Not anymore. Or not really, anyway. Why? "We concluded Project Green," said Mogens Elsberg, general manager of Microsoft Dynamics ERP, not leaving a lot of room for ambiguity.

And there's not much ambiguity anymore about how Dynamics works. Steve Ballmer mentioned it again this week: The four-suite strategy is alive and well on the ERP side and will continue to be. (Oh, sure the suites all have pretty much the same interfaces now, and, as far as we know, they're still on the way to having the same code base, but the mega-suite idea, at least as a branding and marketing concept, is dead.)

ePartners President Michael McCarthy said that partners, not Microsoft, were responsible for a lot of confusion to begin with: "You've got to do your homework before you go into an account. You're not pushing GP in a global manufacturer; that's just stupid. The sophistication of the VAR and the understanding of the applications in the market are absolutely critical."

However, Michael Merfeld, customer director, Microsoft Dynamics, for Avanade, has a simpler take on why the Project Green kafuffle is no longer a sales barrier for partners. Nothing has changed, he said, except Microsoft's attitude. "There's no new message. [Microsoft] just stopped talking about it. They shut up. That's all they needed to do," Merfeld said.

And with Microsoft's big mouth shut, at least on this issue, partners are finding Dynamics easier to sell, which is a good thing. Sometimes, silence is golden -- or, in this case, green.

Posted by Lee Pender on 03/13/2008 at 1:21 PM1 comments

Convergence: SaaS ERP Lives

RCP looked into hosted ERP in our March issue, and there are a lot of reasons why critical back-end software and the SaaS model don't always mix. Plus, and probably as a result, there doesn't seem to be a huge market for it.

"I think it's actually a reflection of market demand," said Brad Wilson, general manager for Microsoft Dynamics CRM, who definitely sees the upside for hosted CRM but comes off as more skeptical about the immediate future, anyway, of hosted ERP. "Companies have shown themselves willing to take marketing, sales and service online, less so supply chain, less so financials."

Partners agree, for the most part. "Software as a Service has been around for 12 years. It was going to take over everything," said Michael McCarthy, president of ePartners. "Have you seen it? I haven't seen people clamoring for it."

McCarthy also allows that CRM, which seems especially suited for the SaaS model, has found a niche as a set of hosted applications. But, on the whole, his sentiments echo those of most partners and even Microsoft folks we've talked to on the issue recently. SaaS ERP, they say, just isn't that big of a deal.

Except that it is, for some. Michael Merfeld, Avanade's director of customer systems for Microsoft Dynamics, is struggling to battle Plexus, a provider of hosted manufacturing applications that's especially strong in auto-parts manufacturing.

"I'm losing to them," said Merfeld, who's always good for a frank and informative interview. "There is a segment of the market out there that views ERP as a necessary evil. They want to buy it like a utility. They don't conceive of it as a strategic weapon. Those customers are very contrary to the whole Dynamics message."

But they're still customers, and Avanade, with Dynamics, still competes for their business. Yes, there's a hosted version of AX, Avanade's preferred ERP suite -- not hosted by Microsoft (Microsoft doesn't host its ERP suites the way it will CRM) or by Avanade, but by a hosting partner. Still, it's not getting through to companies that don't want ERP on premises, mainly because deep industry expertise -- usually provided by partners, not by Microsoft -- is harder to achieve in a hosted application using the Microsoft model, according to Merfeld, and because competitors' products, while offering fewer functions, are just so darn cheap.

"The real problem that Microsoft has in the ERP space is Microsoft doesn't think product-wise in industry focuses," Merfeld said. "They position a lot of the products as fit for a broad range of industry, partner communities out there talking it the last mile. You have to be 1,000 feet deep into a particular industry vertical to work. Making AX Live isn't going to fix anything. The real issue and the real value these SaaS guys are playing is their implementation is, 'We're going to send you some access codes for a Web site; tell us when you're done.'" (See, we told you that he was good interview.)

So, what is Microsoft doing about Avanade's situation? Not much, as far as Merfeld can tell ("We hear rumors that there's a think tank somewhere and there's big thoughts, but they don't have anything published"), or as far as RCPU can tell, either. And, really, it's easy enough to understand why. As we've said before, SaaS ERP just doesn't seem to carry a broad market right now. So, for those partners running up against specialized vendors of hosted ERP apps, the battle will probably continue to be a tough one -- and maybe even a losing one -- for a while longer.

Posted by Lee Pender on 03/13/2008 at 1:21 PM3 comments

Convergence: SharePoint a Dynamic Addition for Partners

Are we there yet? Not quite...but we're close. SharePoint is big business now for Microsoft (a billion dollars a year worth of big), but questions remain -- don't they always? -- as to whether companies are just buying it or actually using it.

"There's lots of interest in it; take-up is a different story," said Joe Cassidy, director of TeamKnowledge, a British company that makes nifty tools that automate the development and deployment of scripts for Dynamics CRM.

It's a different story, indeed, and one worth telling. Because, while a lot of companies are still in an experimental stage of sorts with SharePoint -- the server that aggregates and actually makes useful ad hoc and unstructured data and processes -- use of the product is growing as sales grow. SharePoint handles the unstructured stuff, and Dynamics ERP and CRM deal with structured data and processes. The combo is working -- and partners are cashing in.

"It is literally part of every deal we do," said John Yaggie, director of enterprise business solutions for Microsoft Dynamics CRM at Avanade, a consulting joint venture of Accenture and Microsoft.

In fact, SharePoint is getting so big for Dynamics partners that Reller's prophesy seems on its way to coming true. "One of the big shortages is SharePoint resource development," said Michael McCarthy, president of Dynamics uber-partner ePartners. "I'm cross-training my dot-net developers" to develop for SharePoint, McCarthy said.

Microsoft folks echo partners' sentiments -- not surprisingly, but still. "SharePoint goes into a ton of our engagements. We're seeing a lot of SharePoint and CRM integration," said Brad Wilson, general manager for Microsoft Dynamics CRM.

And it's not all on the CRM side, either. "There's a lot more adoption coming," said Jon Pratt, senior director at Microsoft and general honcho of the GP product line. Pratt added that SharePoint is now a SKU on the Dynamics price list, meaning customers can pick it up when they're buying into Dynamics.

So, partners, grab those SharePoint experts while you can because they're only going to be more valuable as SharePoint and Dynamics grow together. And if you think at this point we sound like some sort of Microsoft marketing spiel, we're not trying to -- we're just telling you what we've been hearing at Convergence this week.

Even Cassidy, perhaps the most skeptical of the bunch we spoke to, is confident that SharePoint will have a bright future integrated with Dynamics. Said the affable Irishman: "It'll happen because Microsoft will make it happen." And it's happening now.

What has been your experience with selling SharePoint to your customers? Are they using it? Are you? Drop a line to [email protected].

Posted by Lee Pender on 03/13/2008 at 1:21 PM0 comments

Convergence: Microsoft Wants Companies To Quit QuickBooks

Redmond sees an opportunity in companies growing out of QuickBooks, Pratt said. "We looked very clearly at the size of when they did move. Many of them moved much later in the cycle than we thought they should have. Many of them said we didn't start thinking about it until get got to 20" million dollars in annual revenue, he said, adding that one customer was still on QuickBooks despite raking in $100 million in annual revenue. "We'd like to move that line back." Pratt's thinking that $5 million to $10 million sounds better.

So, Microsoft has three migration plans -- sold through partners of course -- that will run customers about $11,500, $20,000 or $35,000, depending on which plan the customer wants. The basic and cheapest plan includes two seats of GP, implementation, a year of support and an estimate of partner costs (that's where the "about" comes in.)

Added Pratt: "We think our job is to make people aware of what the base system functionality can do, make them aware that putting a base implementation is not as expensive as they perceived." Partners, take note -- there are still QuickBooks heathens to be converted. Go forth and spread the Dynamics gospel.

Posted by Lee Pender on 03/13/2008 at 1:21 PM1 comments

Convergence: Announcements at the Show

Probably the biggest news for partners is that EDS will offer Dynamics CRM to its customers. Ronald A. Rittenmeyer, chairman, president and CEO (is there anything this guy doesn't do?) of EDS, showed up onstage with Steve Ballmer this morning to discuss the announcement.

"We see the entire Dynamics thing as definitely an enterprise-grade solution. CRM is something we see as our fabric," said Rittenmeyer, chairman, president, CEO and, apparently, tailor. The titled one also said that EDS could train and deploy as many as 300 Dynamics consultants in the next several years.

For his part, Ballmer used the EDS deal to take a shot at rival IBM: "None of their product lines today is that strong. IBM is really more of an enterprise services player that really doesn't love our software very much. That's why we love EDS a lot," Ballmer cackled.

Microsoft also has some SaaS-y additions to its Dynamics suites, including online payment, "marketplace" (think integration with eBay) and keyword marketing services. Plus, not so much on the SaaS-y side, there's a new set of tools to help users of Intuit's QuickBooks move to Dynamics GP.

Posted by Lee Pender on 03/12/2008 at 1:21 PM0 comments

Convergence: For Ballmer, It's Still All About Office

OK, so he said a bunch of other stuff, too -- that Dynamics CRM Live (the hosted version of the software) is half the price of Salesforce.com, that Microsoft gives users a choice of whether to implement it with a strictly SaaS model or whether to install something on-premises, and that Dynamics CRM Live is (or will be when it comes out, which Ballmer says will be by the end of June) easier to customize than Salesforce.com.

But, throughout his keynote at Convergence this morning in cloudy Orlando, Fla., Ballmer kept going back to the old workhorse, Microsoft Office. Oh, he wasn't as explicit as we're being here, but he did describe the future of computing as the convergence (heh heh) of four models of computing: the Web, devices, servers...and the desktop. As in desktop software, installed on the client. As in Office, Microsoft's moneymaker.

"The future of computing is to bring together these four models," Ballmer told a Convergence crowd that looked, at least, smaller than the one that Microsoft attracted to San Diego for last year's show. "As you think about applications like Dynamics...or whatever the case may be, you don't have to think about these distinctions."

Software Plus Services, Microsoft's vision (such as it is) for SaaS, is the real star of this year's show. (Sorry, AX 2009, but you know it's true.) And the first word in Microsoft's catchphrase, software -- desktop software, specifically -- remains critical. Dynamics is supposed to be all about ease of use, which Microsoft touts as a major advantage over SAP, Siebel and other products with sometimes Byzantine interfaces. And there's nothing easier to use -- mainly due to user familiarity, not because the interfaces are actually all that great -- than Office. (Dynamics doesn't necessarily use Office interfaces per se, but the look and feel of Dynamics is very Office-like, and the integration between Dynamics applications and Office software is, as far as we can tell from demos, smooth and seamless.)

Beyond all that, there's no reason why Ballmer shouldn't tout Office and its familiar interfaces -- and their tight integration with the "role-based" interfaces of Dynamics -- as competitive advantages for Dynamics. SAP saw so much value in the Office look and feel that it worked with Microsoft to create the Duet product, which is pretty much an SAP back-end viewed through an Office front-end. Office sells; Office works -- Ballmer knows this, and users and partners know this. It's a great selling point for Dynamics.

There's just one thing: Convergence, Dynamics CRM Live and, to some extent, even the Dynamics ERP suites are all about SaaS, or at least being SaaS-capable in the case of ERP. Office, though, isn't a SaaS product. Oh, sure, there's Office Live Workspace, which sort of extends Office applications to the Web. But, if you really want Office, you've still got to load it on your PC (or, uh, Mac, we suppose).

For now, that's no big deal. Everybody has Office. Nobody minds installing it. Maybe it'll be that way forever. Or maybe this Web 2.0, all-hosted, Google Apps model really will catch on, and the model itself will be even more important than the familiarity of the user interface. If that happens, will Microsoft be ready? Will Microsoft figure out how to retool its moneymaker and shift its revenue model? What will Ballmer tout when talking about how wonderful Dynamics is?

Perhaps the shadow knows -- but Ballmer doesn't seem to. For now, though, it doesn't matter. Dynamics is a billion-dollar business, and user numbers are climbing (thanks to our old friend Josh Greenbaum of Enterprise Applications Consulting for those tidbits of information). And a major reason for that success is that Dynamics looks good and feels good to Office users. For now, that's good enough.

What's your take on Microsoft's S+S strategy? Is it too heavy on the first "S"? Sound of at [email protected].

Ballmer dropped a few other notable quotes during his speech. For one, he pledged continued support for all four of Microsoft's ERP suites as separate entities, a pledge that threw a little more dirt on the erstwhile Project Green, Microsoft's now-dead(ish) plan to converge (there's that word again) all four suites into one mega-product.

"We have a long-term view for every one of these products," the Microsoft poobah said. "We're going to adopt the same smart approaches in each of the product lines -- role-based interface, business intelligence, reporting. In terms of the specific allocation functionality of each product, they will all continue to be enhanced many years into the future."

Ballmer also threw out a few stats: more than 200 partners hosting Dynamics solutions, a growth rate for Dynamics of 20 percent per year (higher, he says, than the market in general), 4,000 users at Microsoft itself moved off of Siebel and Clarify and on to Dynamics CRM. (That last figure was accompanied by a coy quote: "Usually our people love our products in the hands of our customers more than in their own hands," followed by reassurance from Ballmer that Microsoft folks just love Dynamics CRM.)

Posted by Lee Pender on 03/12/2008 at 1:21 PM0 comments

Convergence: The Scene in Orlando

That's not to say that Orlando can't be a pleasant place to hang out. The sun has just broken through the clouds this afternoon after a day or two of cloudy gloom, but the highs in the 70s and lows in the 50s have made for a nice break from chilly Boston. And, after an excursion last night with an unidentified fellow employee of 1105 Media and another gentleman who's an Orlando local, your editor discovered that there are establishments in this town that don't have anything to do with Disney characters, water slides or movie studio theme parks.

In fact, after a fine dinner, we managed to find a trendy outdoor-indoor bar with a selection of some of Scotland's more interesting adult beverages and a cheesy but altogether decent cover band. Of course, the bar was located in -- does it get any more Central Florida than this? -- a strip mall. (By the way, pretty much every structure here is a strip mall, a theme park, a chain restaurant or a hotel. Well, there's also the convention center, we suppose.)

But, whatever. The trendy strip mall bar was a pretty fun place. After that (yes, there was more), we found ourselves in a clubbish establishment with more beverages of interest and a goofy band that was holding dance contests and serenaded some poor sap with rather a bawdy birthday tune.

If Orlando itself has turned out to be more interesting than we expected, Convergence has perhaps been a bit less. Last year's show in San Diego was full of intrigue about Project Green (as the previous two before it had been), and there seemed to be a real buzz about Dynamics CRM Live and the whole Dynamics line in general.

This year, it's more of a nuts-and-bolts affair. Project Green is dead, and nobody seems to be talking about it. An update of AX leads the way news-wise, along with a solid announcement of a CRM deal with EDS. There's still a strong SaaS flavor, but SaaS already seems a bit old hat now, even if it's still emerging. Most of the talk has been about Dynamics' ease-of-use, an important selling point for the suites but not exactly a sexy topic of discussion.

Still, there are, we've heard, 9,500 or so people here from 65 countries, meaning that, despite fears of a recession, attendance numbers this year are pretty close to those of last year. And folks are still doing what people do at conferences -- meeting, making deals, checking out new products and expensing staggering bar tabs. Even in Faketown, there's some real business being done. Mostly over a few drinks.

Posted by Lee Pender on 03/12/2008 at 1:21 PM0 comments

Convergence: Tatarinov Talks Usability

Knowing that, Microsoft is hammering the message at Convergence that Dynamics applications are easy on the eyes, and, by extension, on the brain. In his keynote today, Microsoft corporate vice president and still new Dynamics honcho Kirill Tatarinov spent the bulk of his stage time showing screen shots and getting into the nuts and bolts of how easy Dynamics is to use. His speech was short-ish on talking about new functionality and very long on waxing about the apps' user-friendliness.

And that's as it should be. Sure, ERP and CRM applications have to be useful, providing all the requisite functionality that companies need and what not, but they're fairly useless if, well, nobody uses them. Nobody in the ERP market understands that quite like Microsoft, what with Redmond's many years of experience in designing and selling broad-use applications such as Microsoft Office.

"What we're delivering here is a very rich visualization technology that allows you to view very complex data," Tatarinov said in his speech. "Just like people love their Zune, they love their smart phone, we want people to say, 'I love Dynamics!'"

Hmm. (Pause for laughter -- well, your editor laughed, anyway.) Uh, Kirill, are you sure that you wanted to use the Zune as an example of something people love? Well, anyway, we understand what he means: Enterprise software should be something that's pleasurable -- or at least not torturous, as we doubt that too many people actually enjoy using ERP applications -- to use. It's a strong message for Microsoft and one that should continue to carry Dynamics into more and more companies.

Tatarinov also talked about Microsoft Connect, the portal through which users can suggest changes to Dynamics interfaces and vote on favorite or least-favorite features. Further to the theme of connecting with users, Tatarinov reinforced that Microsoft is now publishing the "direction" of forthcoming Dynamics suites -- as in, what they're going to do -- 12 to 18 months before the suites' release dates.

The Dynamics dynamo also went over the roadmap for the years to come. He said that AX 2009 would be available by the end of the year -- although Microsoft has also told us first half 2008. (A PowerPoint slide also listed the date as Q2 2008, so we're guessing that Kirill made a small mistake in his speech.) Beyond that, expect this release schedule:

AX 2009, Q2 2008
NAV 2009, second half of 2008

2009-2010:
POS (Point of Sale) 2009
GP 11
SL 8
CRM 5

Not to be forgotten, Tatarinov also mentioned that all Dynamics suites now include support for Windows Essential Business Server, the version of Windows Server 2008 for midsize businesses.

Posted by Lee Pender on 03/12/2008 at 1:21 PM0 comments

Whose Standard Is It, Anyway?

"One paragraph in today's newsletter caused me to chuckle, but not in a 'ha ha, that's funny' way. More of a, 'He's kidding, right?' kind of way.

"You said: 'Incidentally, Open XML is already a standard, having been accepted as such in, of all places, Europe, by the ECMA International standards body. That means that ECMA actually "owns" the format now and that future evolution of it is in ECMA's hands, not in Microsoft's. If the ISO accepts Open XML, it'll own the format.'

"I'm not going to get into the numerous conspiracy theories about ECMA (though they sometimes make amusing reading). The 'funny' part is the idea that either of the standards bodies could ever 'own' this particular standard. Let's face it: The standard, as written by Microsoft, is so deeply and fundamentally linked into the base design and operation of Microsoft Word that it will always be at the mercy of the proprietary product. The idea that ISO or ECMA could drive the future of Word is ludicrous.

"Once the standard is approved, it will have to follow the direction Microsoft leads. That doesn't really sound like ownership to me. Well, maybe ownership the other way around but certainly not ownership by the standards bodies. Changes to the standard may require fundamental changes to the way Word works, and that would be resisted vigorously by Microsoft. And if the methods in the standard can't change, then Microsoft still owns it...

"I still think this standard, as currently written, is bad for IT. The links and dependencies on the proprietary product are far too extensive."

First of all, we should have noted, and didn't, that the paragraph above from last Thursday's RCPU should have been attributed to Tom Robertson, Microsoft's general manager of interoperability and standards. It was Robertson who explained at an event in Cambridge, Mass. last week how the whole standards thing is supposed to work, and we got that paragraph from his explanation.

Beyond that, RCPU is playing off-position a little bit in writing about standards, as we're not really experts on the subject. However, we're guessing that you're probably fairly well on-target with what you're saying, Bryan, and, as we said last week, we suspect that one of the reasons that Microsoft is so determined to get ISO approval for Open XML is so that it can pull the rug out from under open source. We can hear the pitch now: "Open source is standards-based? Well, so are we! Look, we have ISO approval! So, there's no advantage in going with open source as far as that goes..."

Of course, if that were to happen, it might not be the worst result for Microsoft partners...even if it wouldn't be the best result for IT as a whole.

Have another comment on Microsoft's talk about standards and openness? Make it at [email protected].

Posted by Lee Pender on 03/11/2008 at 1:21 PM2 comments

Microsoft Money: Where's It Going?

But even with Yahoo still in play, and with Rupert Murdoch and News Corp. saying that they won't fight Redmond for control of the Web pioneer, Microsoft is on the lookout for other smaller fish to swallow.

One relative guppy that doesn't seem likely to find itself in Microsoft's belly anytime soon is Logitech, which, a couple of months back, was rumored to be a takeover target for Redmond. Logitech's chairman -- sort of randomly, as far as we can tell -- told an Italian newspaper recently that a Microsoft buyout of his company would be "without sense," meaning that he's either hoping his company will stay independent or throwing out some tasty, reverse-psychology bait in an attempt to make Steve Ballmer look his way again.

Digg, the news aggregation side, is much more likely prey for Microsoft, but Redmond might find itself in a dogfight with, you guessed it, Google over this tasty morsel. (Yes, we're sticking with our loose zoological theme in this entry. Just try to enjoy it.)

In any case, what we're seeing now is a Microsoft that's hungrier than ever and more than willing to splash out some cash for a fine dinner. The downside from Redmond's perspective is that Microsoft could still come home from the hunt hungry. Then what?

What's your take on Microsoft's acquisition strategy? Sound off at [email protected].

Posted by Lee Pender on 03/11/2008 at 1:21 PM0 comments

Microsoft Fights Back in Vista Suit

Posted by Lee Pender on 03/11/2008 at 1:21 PM0 comments