Reseller News

Microsoft flexes muscle in mid-market

MICROSOFT unveiled a new focus on addressing the IT demands of midsized businesses at its global partner conference.

Speaking to Reseller News at the event, Steven VanRoekel, director of mid-market solutions in the Windows Server Group, said although the company has had particular offerings for small and enterprise-sized organisations, it has not specifically addressed the mid-market before.

“You have had this big group in the middle — the mid-market — that has been left in the dark for a long time,” he says.

Microsoft says around 1.2 million businesses worldwide have between 25 and 500 PCs and fall into the mid-market segment.

Since this is the fastest-growing sector for the company and one where IT spending is slated to grow by 12% in the next year, Microsoft is now paying it particular attention, says VanRoekel.

“We are going to be doing a lot of work to focus on this segment to move them forward by giving them great IT value,” he says.

VanRoekel says mid-sized organisations have distinguishable features.

The have at least one server onboard and IT staff, but tend not to cross the threshold of hiring highly specialised IT people.

“Mid-market customers tend to manage the gamut of IT needs — anything with a plug and a wire they are in charge of,” says VanRoekel.

They are also very resource constrained and need to trade off implementing new technology against other vital business investments.

As a result, IT staff in such organisations are reactive and spend more time fixing problems than thinking about investing in IT to benefit the company.

They tend to endure the pain of legacy systems, such as NT 4, Exchange 5.5 and Netware, rather than moving to newer technology, says VanRoekel.

Therefore, it is a difficult market for Microsoft partners to sell into and not having products aimed specifically at this segment has not helped either, he adds.

A new Windows Server bundle, comprising Windows Server 2003, Exchange Server 2003 and Microsoft Operations Manager 2005 and 50 client access licences, will give Microsoft partners a single offering to take to customers, says VanRoekel.

The bundle provides customers with the core infrastructure on which to expand their use of IT and will create services revenue opportunities for partners, he says.

The aggressive price of the offer at 20% less than normal creates parity in pricing between Microsoft’s Server System offerings, says VanRoekel. “Mid-market customers are not small enough to take advantage of Small Business Server pricing and not large enough to take advantage of our volume licensing. They are caught between pricing schemes and end up paying more than the other segments.”

Microsoft has also launched its first segment-specific technical website for mid-sized businesses which provides guidance for best-practice installation of Microsoft software.

“We refreshed the thinking at Microsoft to produce great content for the mid-market-constrained IT person,” says VanRoekel. The content from the portal has also been published in an accompanying textbook.

Offer not ready for New Zealand

MICROSOFT’S new server bundle, designed to drive its renewed focus on midsized organisations, will not yet be available in New Zealand.

Microsoft New Zealand is still assessing how it will roll out the new promotion on its Server range and some kind of similar deal will be launched later this year, says Elizabeth Kirby, mid-market business manager. “We have a variety of plans in progress, but there are still some areas we are working on,” she says. Nevertheless, Microsoft is making serious commitments to the mid-market in New Zealand, she adds. “There has been a quantum shift in how we go to market to meet the needs of the mid-market,” says Kirby. “Our customers have been pretty specific in what their requirements are and we have made significant changes in our model to address those needs.” Staff numbers in Kirby’s team is growing from two to eight this year. The number of telephone-based account managers who service mid-sized organisations and provide partners with leads where customers do not have IT service providers has increased from two to three.