More Dirt from the Vista Capable Case

As we said months ago, we're sure that all of this is part of a pretty standard sausage-making process for software...but all of this stuff sure is fun to read.

Posted by Lee Pender on 11/18/2008 at 1:22 PM0 comments

Microsoft Online Services: SaaS-y, Sort Of

Take this week's launch of Exchange Online and SharePoint Online for the cloud. In theory, this should be simple. Customers sign up for hosted Exchange and SharePoint, pay a monthly fee, open a browser and start working, right? Isn't that more or less what SaaS is supposed to be? Well, not exactly. Check out this Microsoft quote from this story:

"'I don't want to make it sound like someone signed onto the Web site, swiped a credit card, and went home,' Chris Capossela, senior VP of Microsoft's information worker product management group, said in an interview."

Uh...why not? Why doesn't it work that way? Granted, technology rarely works exactly the way it promises to, but it seems to us that the point of SaaS is to be low-cost (or, more specifically, have a predictable cost) and easy to manage. Granted, SharePoint Online and Exchange Online probably accomplish that to a greater extent than their traditional, on-premises parents do, but Exchange, for example, still has a client component (Outlook, of course) installed on PCs, and apparently there's some management to be done in-house with the SaaS versions of both applications. (Partners, take note -- there's your in, if customers buy into Microsoft as a SaaS company.)

Of course, we understand several things here: 1) These are complex products -- especially SharePoint -- that do complex things, and it's perhaps a bit naïve to think that companies will be able to just flick a switch and start using them. 2) Almost everybody who's investing in Online Services (the name of the combined package) has some Microsoft infrastructure already and will have to integrate the hosted with the on-premises.

But then there's 3) Microsoft likely doesn't want to totally cannibalize its traditional SharePoint and Exchange businesses, so it's not going to make Online Services too cheap or too easy to manage. In fact, in the case of SharePoint, it's not even putting all of the features of traditional SharePoint into SharePoint online -- not even all that many of them, in fact.

All of this leads us to the conclusion that Software plus Services, Microsoft's sort of proprietary name for SaaS, is really just Redmond's attempt to make sure that companies still need to invest in some of the more money-spinning parts of Microsoft's infrastructure. Microsoft has to have a SaaS offering -- and it's putting quite a bit of effort into this one, as well as into Azure -- but don't expect any Salesforce.com-style, "No Software" marketing lines coming out of Redmond any time soon. Online Services still doesn't represent full-featured, 100-percent cloud applications. Will it ever? Can it ever? We kind of hoped that we'd know by now...but we don't.

What's your take on Microsoft's SaaS vision? Are you looking for a more pure SaaS play or does S+S make sense? Sound off at [email protected].

Posted by Lee Pender on 11/18/2008 at 1:22 PM0 comments

Reader Response: Attack of the Aussies

But for folks in Australia, the issue is immediate, and the responses were passionate. (And for those of you not in Australia, which is probably most of you, try to imagine how your fellow travelers in the channel are feeling because you might end up feeling much the same way.) So, here we go. Let's start with Ken -- who identifies himself as an IT manager -- in Melbourne (and, FYI, we've Americanized the English for the home folks):

"Seems like a perfect marriage to me. With Microsoft and Telstra's recent appalling track record and the sort of pathetic leadership shown by both CEOs, most sensibly run businesses will only experience a short downturn before their former customer base realizes how bad the service is, how expensive the charge-out rate will be, how access to their own technology has vaporized and how the decision to go with these turkeys was a bad move.

"When they figure that out and go crawling back to the old service providers, don't be surprised if a new service deal costs 50 percent more. And yes we are peeved -- thinking of going back to Novell."

Wow...there's not really a lot we can add to that, so we're not really going to try. (We especially can't comment on Telstra, given that we know almost nothing about the company.) But, Ken, thanks for letting us "take the temperature" (in this case, boiling hot) of how folks in Australia feel about this deal. Microsoft partners in Oz: If this is typical of the attitude you'll run into from customers, you might want to think long and hard about your own SaaS strategy, how you're going to pitch it and how Microsoft is going to fit into it.

We move on to David, also in Melbourne (Victoria represents!), who is a partner, and who says that companies should have seen this deal coming and should be able to react to it:

"The Telstra-Microsoft deal is typical of what we can all expect as cloud computing kicks off. My response was to register Cloudintegrators.com and get on with looking at how we can build total business solutions for the SME sector so we can set them free from traditional infrastructure and have them integrate multiple cloud-based solutions for their business platform.

"The mistake Microsoft may have made on this deal is that SMEs in Australia hate Telstra with a passion and only use their services because there is no other total telephony solution provider in Australia. While Telstra holds an effective monopoly on our phone and data solutions, we would not choose to do IT business with them so long as there is a choice.

"This deal is not an end-game yet. Opportunities still exist en masse in the SaaS space in Australia and globally. Oh, and if all one can do is traditional IT infrastructure, one has at least six months to retrain, so start reading now."

That's good advice there at the end, David -- words that every partner around the globe should heed. It's time to adapt; although there's no reason to panic, it's worth figuring out, partners, how you're going to adapt your business model to SaaS. Dave seems to be on the right path there. By the way, not for nothing, David also told us that his company became a Salesforce.com Registered Consulting Partner in August and called that move the "biggest step forward [the company] has taken since becoming a Microsoft Gold Certified Partner."

And then there was Brad, who sent what is possibly your editor's favorite e-mail of the year so far. Brad's a fellow native Texan who, like your editor, sympathized with the poor folks of Australia who constantly have to de-bunk myths about their homeland and put up with lame jokes. Brad says:

"I am also a native Texan, and living in California provides a lot of opportunity for local natives to brutalize my home state (and me in the process). But after 18 years of being out here it is easier to handle. I found when I was in Australia that it was a lot like Texas -- so I had a great time."

We feel you on this one, Brad. From the brim of our Stetson to the tips of our cowboy boots...where did that "rolling eyes" emoticon go, anyway? (And, in case you were wondering, neither Brad nor your editor rode a horse to school as a kid, and neither of us grew up with oil wells in the front yard.)

Thanks to all who have e-mailed RCPU recently. We have tons of great stuff that we haven't run yet, but we're going to try to get to it in the weeks to come. In the meantime, keep your thoughts on any and all topics coming in to [email protected].

Posted by Lee Pender on 11/13/2008 at 1:22 PM0 comments

IT Spending More or Less OK for 2009, Firm Says

Posted by Lee Pender on 11/13/2008 at 1:22 PM0 comments

Chin Up, Partners: Microsoft Works To Encourage Channel in Tough Times

It's a very upbeat and totally pragmatic message, and it's totally appropriate and welcome at a time like this. This is Microsoft and the Partner Program demonstrating leadership at a time when partners need it -- and that's exactly the kind of thing the channel should welcome, especially during an economic downturn.

Still, though...ouch. These are the kinds of messages that bring to mind depression-era billboards that encouraged jobless men to not give up -- messages that are encouraging but also pretty ominous. OK, granted, we don't think that things will get anywhere near this bad, and we're not seriously suggesting that there will be bread lines in Redmond or anywhere else any time soon.

Microsoft is still a monster financially, and most partners are and will be, we're guessing, profitable right through the current recession and into a recovery. But growth could and likely will flatten out, or even shrink (in which case it wouldn't be growth at all...), and it seems highly unlikely right now that 2009 will be as kind to most companies as 2008 was. And 2008 was pretty brutal compared to, say, 2003-2006. Whispers of potential double-digit unemployment and a recession that could deepen in the quarters to come are not encouraging.

Although technology in general seems to be getting a glancing blow from the storm that's brought down huge names on Wall Street and is threatening to sink GM(!) and others, a few tech companies are starting to show vulnerability. Cisco issued a revenue warning with its last earnings statement, and Microsoft's Dynamics numbers -- remember, Dynamics is business software and therefore provides some barometer as to how much companies are spending on enterprise technology right now -- have cratered recently. RCP Editor in Chief Scott Bekker lays out some of the damage:

"In the first quarter of fiscal year 2009, the growth in Microsoft Dynamics customer billings fell off a cliff. They were at a 10 percent increase compared to 18 percent the year before and 19 percent the year before that. This at a time when the rest of the sales in the Microsoft Business Division, which is primarily Microsoft Office, were growing at 20 percent -- consistent with the previous year. Microsoft shook up the Dynamics field organization in the United States to help fix it."

Now, maybe that's just Dynamics struggling -- or, more specifically, growing at a slower rate than it has been -- but we suspect that what's happening with Dynamics is not an isolated case. (Microsoft, by the way, has responded by offering a 0 percent financing deal on Dynamics applications.)

Not that partners don't know all of this, of course. This downturn has rolled in like a slow-moving hurricane rather than like a flash flood. Everybody's getting ready for it -- even Microsoft, which wants its partners to be prepared. Still, Watson's message, while appropriate, isn't exactly a sign that Redmond expects things to get better any time soon.

How long do you think it'll take the economy to turn around? How bad are you preparing for things to get? Tell us at [email protected].

Posted by Lee Pender on 11/13/2008 at 1:22 PM1 comments

Microsoft Launches Servers for SMBs

Posted by Lee Pender on 11/13/2008 at 1:22 PM0 comments

Ingram, Open-E Announce Distribution Deal

Posted by Lee Pender on 11/13/2008 at 1:22 PM2 comments

A Product-News Potpourri

Dell, Seagate and McAfee have a new effort for full-disk encryption.

Sun announced "open storage" appliances this week.

EMC has an intriguing offering of storage for the cloud.

AppSense has released a new version of a product that managed virtual environments.

And somebody called NetQoS -- how on earth do we pronounce that? -- released something having to do with voice and video monitoring. (Warning: the ubiquitous and mostly meaningless phrase "unified communications" is prominently involved.)

Posted by Lee Pender on 11/12/2008 at 1:22 PM0 comments

VMware's Virtual World Goes Mobile

This week, the EMC subsidiary introduced a hypervisor for mobile devices that is the result of its recent acquisition of French developer Trango Virtual Processors. Trango's app is now VMware's Mobile Virtualization Platform, and the company is targeting mobile phone makers with its new offering.

The move is interesting for a lot of reasons, but we're intrigued by it mainly because, as far as we can tell, Citrix and Microsoft haven't moved into the mobile space yet. Either VMware sees some real opportunity there and is trying to grab the market before everybody else does, or the company is covering a few extra bases in an attempt to guarantee a revenue stream in case Microsoft (for example) starts eating away at precious market share in the enterprise -- or maybe a little of both.

In either case, it's another frontier for virtualization, a technology that seems to have almost unlimited potential. The functionality involved might be virtual, but the market and revenue potential could be very real. The only questions at this point involve how long it will take for mobile technology to go virtual, and how quickly VMware's competitors will follow it into this space. At this point, it looks at though VMware's reputation as virtualization pioneer is solidly intact.

Is there any limit to what virtualization can do? What are some creative uses for it you've thought of or implemented? Share your thoughts at [email protected].

Posted by Lee Pender on 11/12/2008 at 1:22 PM0 comments

Gates Applying for Patents on the Side

Posted by Lee Pender on 11/12/2008 at 1:22 PM7 comments

Cisco To Power New Yankee Stadium

Posted by Lee Pender on 11/12/2008 at 1:22 PM0 comments

Aussie Hosting Deal Rankles Resellers

Now, let's travel to perhaps the most cliché-ridden place on earth: Australia! Does anybody else remember the "Simpsons" episode in which Bart goes to Australia? (We can't find it on YouTube...sorry.) There's a funny montage in it about Americans' brief fascination with Australia in the 1980s and all the hackneyed clichés and stereotypical characters it gave birth to.

We're required by international treaty -- look it up -- to mention Crocodile Dundee at least once (check, plus we linked a photo) and use at least one stereotypical Australian phrase (let's go with, "G'day, mate!") when talking about Australia. So, with that out of the way, we can get on to the point of this entry. (And, by the way, Aussie friends -- we're not making fun of you; we're actually making fun of American popular culture from 20-plus years ago. And, as a native Texan who spent five years living in Europe, your editor is well-accustomed to having to dispel -- or sometimes reinforce -- stereotypes and answer some odd questions about his homeland.)

Anyway, the reason we're Down Under (almost forgot to work that one in) is that there's a pretty interesting channel story coming out of Australia. Microsoft recently announced a deal with longtime Australian partner Telstra to provide hosted e-mail applications on Telstra's SaaS platform. Nothing earth-shattering, right? Well, no, it's not.

But it's got some Aussie partners up in arms. They're worried that the deal will kill off opportunities for other resellers in the channel, and we kind of see where they're coming from. Check out a quote -- actually attributed to somebody who wasn't afraid to go on the record -- from a reseller in the story linked above:

"Why would you employ an IT technician to fix your computer problems if it's all online to Telstra or Microsoft," Total Network Support director Oliver Lindsaar said. "It will have a very big impact on lower-end employment in the industry. Microsoft and Telstra say there are all these other opportunities. Yes there are, but you either have to be very innovative with your products or very large to be able to supply the sorts of service large companies want."

It's the last part of that quote that's the kicker -- specifically the part about being "very innovative." Partners, and not just partners in Australia, are worried about Microsoft's SaaS plans, which seem to include the channel (and hosting partners in particular) almost as an afterthought. And now some Aussie service providers are apparently worried that Microsoft has chosen to go forth with one particular partner in their market, further limiting their opportunities in a model that might not have seemed that potentially lucrative to begin with.

And they should worry. Then they should work on that "very innovative" bit that the partner above mentioned. Because the reality of SaaS and Microsoft's SaaS plans is that channel companies are going to have to rethink and rework their business models if they want to be a part of this new computing paradigm. If SaaS is going to take hold, it's going to have to cause a massive shift in the way companies handle IT investments -- that's really the point of it. And old, familiar business models rarely hold up when massive market shifts take place.

We're not here to comment on whether Microsoft's Telstra deal is fair or not -- because that's not the point. The point is that it's done and that the reality of SaaS is slapping some partners in the face. They need to determine now how they're going to deal with it. Fortunately, they have some time -- SaaS might never live up to its much-ballyhooed potential (something to consider), and it certainly won't completely replace more traditional models any time soon. But it's also something the channel as a whole can't ignore any longer.

What are your plans for SaaS? What's your take on deals like the one Microsoft made with Telstra? Sound off at [email protected].

Posted by Lee Pender on 11/11/2008 at 1:22 PM0 comments