Microsoft focuses on Linux threat with partners

Microsoft focuses on Linux threat with partners

Microsoft CEO Steve Ballmer simply couldn't remain seated when asked to discuss the benefits of commercial vs. open-source software during a keynote question-and-answer session at last week's Worldwide Partner Conference in Toronto.

Ballmer paced around the stage -- blaming the iced tea he had to drink or the fact that he's a "little bit of a caged animal" on the topic -- as he exhorted more than 5,000 partners in attendance to consider where their opportunities exist today.

"Today, what's really the lion's share of all of the design wins on the server and is absolutely winning virtually all of the design wins on the client?" he said, bellowing for emphasis. "Is there a question?"

Seizing the chance to make a case before the partners, Ballmer also argued that they benefit more by sticking with Microsoft because there are more device drivers, applications and greater opportunities for developer productivity in the Microsoft environment. He also contended that technology innovation has happened "much, much more from commercial software companies than from open-source.

"In terms of innovation, I think Microsoft specifically, and commercial software in general, will prevail," he said.

Ballmer also stressed that the company stands behind its software, providing "a clear chain of responsibility" as well as indemnification for customers in case any intellectual property issues should arise.

"Last but certainly not least, the No. 1 message I've heard from our partners these days is, 'How do we more effectively go to market together?'" Ballmer said. "Who do you go to market with on Linux? Oh, IBM? Yeah, I'll bet that will work real well for your business."

Taking another shot at Microsoft's competition, Ballmer said, "How does IBM sustain that investment in Linux long term when the only money they make is (from) services? They make no money on the software. They make no money on the hardware, now that HP (Hewlett-Packard) and others are out there basically long term in the hardware business."

Linux was a central theme during conference speeches, even in videos the company aired for comic relief. In one, executives in Microsoft's partner group bit the heads off iced penguin-shaped cookies before gobbling up the rest. The skit appeared to be a little too much for Allison Watson, Microsoft's vice president of the worldwide partner sales and marketing group. She could be seen bending her head over to relieve herself of the mouthful of penguin crumbs.

Whither Longhorn?

Ballmer provided no insight into the launch date for the next major Windows release, code-named Longhorn. "We're not that good at scheduling," he said, shrugging his shoulders.

He did note that the extensive work done to prepare the upcoming security-focused Windows XP Service Pack 2, due for release in August, didn't help the Longhorn schedule.

MOM still due this year

At the partner conference, a Microsoft executive displayed a slide indicating that Microsoft Operations Manager (MOM) 2005 will be released next year. The product, however, remains on schedule for the second half of this year, according to a company spokesperson. It was tagged as a 2005 product in keeping with Microsoft's new naming convention of labeling offerings due in the second half with the subsequent year's date.

But the follow-on System Center 2005 product that was expected in the second half of this year has been delayed to 2005, the company spokesperson said. System Center is a new offering that provides a common database and reporting services for MOM and Microsoft's Systems Management Server. The product had been scheduled to launch 90 days after MOM 2005, but customers testing the beta requested additional functionality, according to the Microsoft spokesperson.

Windows NT Server 4.0 numbers dropping

How many users are still running Windows NT Server 4.0? Paul Flessner, senior vice president of Microsoft's server platform division, provided some figures during a keynote presentation.

He claimed that 46 percent of the NT servers were upgraded between July 1, 2003, and June 30, 2004 -- bringing the number down from 3.9 million NT 4 servers to 2.1 million.

"There's 2.1 million NT 4 servers still left on the planet, and that's a bad thing from our perspective," Flessner said. "Many of those are Exchange 5.5. Many of those replacements will include Active Directory. You will see a lot of momentum this year in the field around NT 4 replacement to Windows Server 2003."

Software Assurance update

Microsoft used the Worldwide Partner Conference to soft-launch a "clarity" campaign for its controversial Software Assurance maintenance program.

Under the program, Select and Open license holders have the option of annually paying a fee to gain the rights to all upgrades released during the contract time frame as well as some newly added support options.

Leeann Bagley, a Microsoft licensing representative, said feedback had shown that partners and customers were "lacking clarity," so the company decided to kick off a new campaign. In a conference session, Microsoft distributed a package containing brochures, posters and other marketing and educational materials designed to help partners point out the benefits of Software Assurance.

For instance, Microsoft suggests different sales messages, depending on whether the partners are speaking with an IT professional, a purchasing agent or someone from a company's legal department. "It's designed to make the representatives have a more productive discussion," Bagley said.

Sunny Charlebois, a product manager in worldwide licensing and pricing at Microsoft, said the company has been meeting its target projection for Software Assurance renewals, but she wouldn't say what the target number was.

One partner, who asked not to be named, said he has heard customers ask, "Until we know what the long-term product road map is, why on earth would I want to buy Software Assurance?"

Another partner claimed a 90 percent renewal rate.

Partner channel investment gets a boost

Microsoft last week said it's boosting its investment in its partner channel from US$1.5 billion to US$1.7 billion for the fiscal year that began July 1. The $200 million increase will cover additional field specialists, training, sales and marketing support and services, according to the vendor.

The increase is planned even though Microsoft recently disclosed that it's targeting nearly US$1 billion in efficiency improvements and cost reduction across the company. But Watson said partners "are very much like our sales force" so the last place Microsoft would want to make cuts is with programs targeted at those who directly face customers.

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