Software strategies and more…

I was very impressing as the day unfolded. Allison Watson welcomed everyone in her typically gracious manner. She then offered a heartfelt farewell and handed off to John Roskill. He then conducted a short intro before handing off to Microsoft’s CEO Steve Ballmer.

Mr. Ballmer entered to the chant of “oh Cloud, oh cloud…” and began by shouting about how Microsoft has been discussing “Oh Cloud” for 4 years. The kick off WPC 2010 is exciting b/c it is in a year that is a clear indicator that business and enterprise customers are clearly adopting cloud strategies, products and services. Ballmer goes on to say that there is no question that Microsoft is embracing the cloud opportunity with all the nearly 10,000 partners present and promised its commitment to a financial and partner-centric approach to next generation computing.

In his speech Mr. Ballmer outlined the following evolving vision and strategy at Microsoft:

1) The Partner transition to the cloud.

MS started FY in centre of gloom of financial crisis. Bt thru hard work of partners around the globe we’ve seen and been rewarded with success. Our success is built on the relationship we have with our partners.

• Win7 94% customer sat
• Office 40 M seats.
• Online services thousands of new enterprise customers are migrating to SharePoint and Exchange On-Line (BPOS)
• 670K trail downloads of SQL 2008 R2.
• Azure from 0 to hero, over 10,000 paying customer building applications to Azure.

Opportunities Ahead.

Opportunities for all of us in the Cloud.

Several themes that Ballmer and Microsoft are focused on, these are:

1. Cloud will create opportunities and responsibilities

• Windows Azure and Online Services will allows us to reach new markets and customers, streamline operations, improve agility, focus on business value, deliver reliable, secure and private innovations and solutions.
• With the MS Cloud tools we can remove barriers that partners face when selling a new sol’n. Rather they can sell the business value that IT can use to be more relevant to the business.
• Partners can better manage the experience and effectiveness of IT systems by managing, deploying, supporting, and creating applications and solutions in a dynamic manner. The cloud allows partners to effect change without disrupting the business

2. The Cloud learns and helps you learn, decide and take action

• Product Focus: Office, SQL, Bing
• The Cloud supports and facilitates natural language, stats/BI, and reasoning tools and helps bring enterprise to the cloud – working where, when and how people work.
• Dallas helps people publish data streams ia the cloud to allow business, customers and partners link their information to relevant stats and analytics.

3. New social and professional interactions

• Products: Office, Communications Server, Exchange, SharePoint, WindowsLive, Dynamics CRM Online
• Bringing social interactions into the enterprise e.g. facebook, twitter, etc. vi SharePoint, Office and Exchange 2010. Trying to improve the ability to collaborate (presence and secure ad-hoc websites) on the go and in real time with Microsoft tools and standards.

4. The Cloud drives Server Advances that drive the Cloud

• Products: Server 2008, Windows Server, Azure, SQL, SQL Azure
• Based on experiences with scaling Windows Live to millions of people in 100s of countries. the scale, complexity and management of these systems has influenced our architecture of SQL and Windows Azure to develop and propagate and infrastructure that our enterprise customers and partners can use to deliver a scalable, global, local solution.
• Now we are asking the Question, how do we bring Azure and SQL online into the enterprise. We want to deliver a full cloud infrastructure with a consistent develop, manage, and host solutions in the Microsoft cloud.
• SQL and Windows Azure are the cornerstones of Microsoft’s Cloud Strategy.

5. The Cloud wants Smarter Devices

• Products: KINECT, Explorer, Windows, WindowsPhone
• Build devices that can bring services down from the cloud and execute locally in a fast, rich manner.
• Integrate information and deliver that information in real time, where ever the user maybe and on what ever device that they may be using.
• The Cloud will be critical to the synchronization needed by enterprise to keep its records in check, meet governance requirements, and secure the privacy of its users.

Coming in 2010 and 2011  a big push on slates – interesting mix of brands (Foxconn a Chinese manufacturer) to the expected PC folks, but also Onkyo and other broad consumer brands Sony, Tosh, Panasonic, etc. Big press of MS Slates for Fall of 2010.

WindowsPhone 7: “in Barcelona it received really NICE reviews” the number of brands on the WindowsPhone 7 slide has really dropped DELL, HTC, SonyEriksson, Samsung are the standouts. But with Android rapidly growing with DELL, HTC and Samsung you have to question their commitment. Should Microsoft buy Nokia? or RIM?

Cloud pitch that Microsoft is all in. You want to help people be productive bet on Microsoft, Not Cisco, Apple, Google, etc. Microsoft’s Cloud “all in” strategy includes:

• New Form factors
• Windows PC/Netbook sales
• Business Productivity
• Enterprise IT and management:
• ISV Applications, Device Web and Enterprise
• Move to the Cloud

POV: It wasn’t SteveB’s most passionate speech, but I do feel he is nearly done mustering support and focus across Microsoft’s vast empire for the needed transition of the company from its very successful and profitable client/server business model to that of the cloud. The devil is in the details, but getting the partners, developers and ISVs on-board is mission number one and this WPC could be a turning point for Microsoft, its partners, and its customers.

Just reading how Google’s employees are being switched to Google OS and those that aren’t are choosing between Apple or Linux. The article goes beyond just the trials and tribulations between Google and Microsoft and adds additional food for thought with regards to whether Steveb and team can right the listing Microsoft Titanic.

To see the writing on the wall, one only has to look as far as the turmoil currently happening within the Windows Consumer division, a restart with Windows Mobile that leaves Windows Mobile 6.x users (including nearly every MS employee) out in the cold with a dead product, long-time partners jumping ship for new tablet and tablet-like O/S platforms, and its own inability to launch a competitive product in a space it was once the pioneer, not to mention a music player and store that never was…. What is left Live and XBOX? Both which have had and are being challenged by other services that are often seen as easier and more in tune with the needs of their users. It my opinion that without a tangible connection to what people want to do with computing (consume information about their business, their activities, their customers and their friends) tools that Microsoft continues to decrease its own relevance in the modern computing space.

Of course an argument is that Microsoft is tied tightly into business technology and is it’s platform of choice because they offer everything from the data centre to the desktop, but if we look at changes that are now starting to reshape the enterprise (and by this I mean all businesses that transact with customers large and small) market we see the client/server world coming to a end in the not-to-distant future.

Start by looking at the combined Software as a Service offerings and the Platform as a Service offerings that are enabling both traditional and up-start business to manage their financials, customers, inventory as well as computing and processing power you soon can conclude the tools that Microsoft offers for managing, deploying and developing are quickly becoming yesterday’s news. In fact, I would further argue given IBM, Oracle and SAP’s focus on developing in-memory databases, web-based, mobile and business intelligence solutions that these will have an near term immediate impact on sales of Microsoft’s SQL database as instances of this product will be replaced by solutions that can run complex transaction and data mining queries in-memory and report in real-time rather than via traditional I/O coding. If you combine this with the cloud becoming a repository for web-platform tools like AppExchange for the business and Apple’s Appstore or Google’s Apps for business for consumers and businesses alike and you see how on-premise is quickly becoming a model of the past.

It seems that the market also continues to question the relevance of Microsoft in the future. During the past decade there have only been two periods when the stock showed life, those being the end of the dot.com boom cycle and when Microsoft was expected to buy into the search wars by acquiring Yahoo! but failed. The stock market seems to question Microsoft’s future plans since the company is no longer rewarded with a premium multiple that innovative leaders such as Apple receive.

Yes, I know Microsoft has launched its Cloud strategy and has promising applications from Office 2010, SharePoint, Azure, and CRM – but many of these are still tied to heavy enterprise investments in Microsoft’s traditional tools and platform solutions. So for hybrid environments (Software+Services) this may forestall rapid migration, but it doesn’t mean that Microsoft is truly “all-in” in my opinion.

My final thoughts are these:

1. Microsoft has lost its way at the worst time in the consumer space, its customer and its partners are looking to Microsoft’s competitors for innovation and sellable solutions. Dell and HP are the first off the boat, so how will Microsoft shore up the army of independent and small developers that may soon follow. This space is critical because it connects the data, information and systems to the jobs people are doing in and away from the office. Innovation begins with the consumer these days not with corporate IT, even SAP gets this.

2. Ballmer has bet on a long term strategy over short term gains. I agree that technology investments are not something you should tie to quarterly results, but looking at the quarters and yearly figures above. Seems it’s time to put up or shut up about this.

3. The ‘elephants’ Windows, Information Worker Group, and AppPlat are massive parts of the companies ~$60B in revenues. These massive businesses have the company committed to a course that makes innovation hard and political. While there are forces at work (Azure, Office On-line, CRM) that may effect a change of course – it will take significant management and ethos re-direction to make this work. I am not confident Microsoft has the hutspa  to make the bold and risky choices needed for this to happen. As such Microsoft may loose the enterprise market just as it is loosing the consumer market.

* Full disclosure, I worked at Microsoft and had an amazing experience while there, opinions in this blog are based on my person view of the company given the challenges they face in the market and the publicly available sites I have referenced in this blog. I do not hold shares in Microsoft.

I have an iMac and love it. I have a Win7 notebook and think its great. I’d love a new smart phone and would consider an iPhone. However, I am stumped by how Apple continues to rise above the fray.

Case & Point: Apple releases the iPad to rabid millions with tones of hoopla. Reviews are everywhere both for and against. There are critiques and praises about what its missing, what it great and how it compares to tablets past (Newton to Compaq’s TC1000 (had one and loved it!)) and present (Amazon Kindle). Official reports cite over 300,000 in sales the first day.

Then day 2 comes. The party for some is over. But for many others the romance continues.

And what happens on Day 2 is the reason for this rant. Apple releases a new O/S! I always feel you should hang out for version 2 and that being an early adopter has it perils, but for a vendor to release such a significant update right after the product is launched just spark too much hubris in my opinion! Seriously how happy would you been to have just dropped north of $500 and told, “thanks and now we have improved it for the next guy.”

If a lesser vendor (read Microsoft) released Windows 7 then said the next day that Windows 8 with 3-D, holographic, 10-core 128-bit O/S was available next month there would be hell to pay! But to all those that worship the book of Jobs it like, “This is great! I got the new toy and its going to be upgraded in a couple months and be much better. The next guy is really lucky, but I got mine first!”

Ah well, I know you’ll be able to upgrade iPad v1 OS3 to OS4, but will the iPad v 1.5 with O/S4 native be even cooler for even less? Looking at Apple’s history for product innovation and the simple answer is “quite likely”.