July 29, 2004, 1:47 PM — Microsoft Corp. is looking to turn security from a "concern" into a "business asset" and "opportunity" for the company through software enhancements and management applications, the software maker's chairman and chief software architect Bill Gates said Thursday.
Today, security and network complexity is on top of all business customers' minds, Gates said in a presentation at Microsoft's annual financial analyst meeting in Redmond, Washington. Users want to know how to update their systems and how to move away from passwords to systems with smart cards and biometrics, he said.
Microsoft is addressing these concerns, both by working to create more secure software and by offering software management applications, including the Microsoft Operations Manager (MOM) and Systems Management Server (SMS), Gates said. As a result, the perception of security as a perennial problem for Microsoft should change, he said.
"The security area turns from something that is a concern to us to a significant business asset as well as an opportunity," Gates said.
The desired change might come later rather than sooner. Microsoft earlier this month said two key patching products, Windows Update Services (WUS) and a single "Microsoft Update" Web site for patching, as well as software management offering called System Center 2005, are delayed until the first half of 2005.
Those same delays might impede another Microsoft priority Gates highlighted in his opening speech at the financial analyst meeting. The vendor wants business customers to upgrade their software more often, what Gates called increasing the "pace of software innovation" in business environments.
Microsoft makes most of its money selling software to business users. But once a sale is made, business users are slower than consumers to upgrade their systems. "One challenge in the software business model is that once you license a piece of software, it never wears out," Gates said.
"A lot of what we need to do with software is increase the agility of the corporate server and the corporate desktop," Gates said. The plan to do that includes SMS and other management offerings that help system administrators update PCs and servers, sometimes without needing to physically work on the system.
"There is an upgrade opportunity for those people, but you have to make the cost benefit very straightforward. We can do that by giving them tools," to test and deploy our software, Gates said.
The move is part of Microsoft's key sales strategies for its 2005 fiscal year, which started July 1. Chief Executive Officer Steve Ballmer in his recent annual strategy missive to Microsoft employees said that Microsoft must "work to change a number of customer perceptions, including the views that older versions of Office and Windows are good enough."
Many businesses continue to rely on older version of Windows on the desktop. Research firm Gartner Inc. in a poll of attendees at its U.S. Symposium in October last year found that only 14 percent of attendees had upgraded to the 3-year-old Windows XP. The poll, answered by 186 people, represented more than 1.3 million desktops and 460,000 laptops.
Gates in his speech touched on several other areas that Microsoft is working on, several that the company recently delivered products in or is slated to do so soon. These include speech, search and Tablet PC ink recognition. Longer term work includes improvements in the way Windows stores files and handles digital media. These should be delivered in the next major release of Windows, code-named Longhorn, which is expected in 2006.
Microsoft's financial analyst meeting runs all day Thursday and includes presentations from most of the company's top executives.
