Ballmer outlines Microsoft's enterprise ambitions

by Chris Kanaracus

March 12, 2008 —

Microsoft CEO Steve
Ballmer used his opening keynote at Microsoft's Convergence user conference
to not only preview a number of updates to the company's Dynamics line of business
software, but also to make a firm declaration of the software giant's enterprise
market plans.

"I still get asked, is Microsoft a serious player in business applications?
... This is mission-critical for us," Ballmer asserted. "The biggest
decision I made -- unless we close this Yahoo deal -- was pushing into the business
applications area," he said at another point. He revealed no new details
of Microsoft's ongoing attempt to buy the Web-based search and content company.

Ballmer also claimed that Microsoft is now the "leading provider of enterprise
software" in terms of "total dollar volume."

A Cirque de Soleil-style, gymnastic dance routine preceded Ballmer's remarks
at the Wednesday event. A squad of women dressed in white, plumes of dry ice
swirling around them, climbed long sheets of cloth and spun on metal rings as
a piano and guitar-driven number blasted out of the sound system in Orlando's
Orange County Convention Center.

But the bulk of his presentation was a look at Microsoft's product strategy
for Dynamics and its broader push around "software-plus-services"
-- its bid to extend its core client applications business with hooks into the
Web.

IT is grouped into several categories, Ballmer said: The desktop, the Web,
servers and devices. "The future of computing is to bring together these
four models," he said. "In Dynamics, we are trying to move to embrace
that right away."

One key new product, Microsoft's Dynamics AX 2009, is set for release in the
first half of this year.

New features include an integration with Microsoft's unified communications
platform; a "one-stop shop" for data related to compliance issues;
an integrated workflow framework; and broader localization and globalization
capabilities, such as support for multiple languages and time zones.

Marketing materials for the new Dynamics software make much of its so-called
"desirability" features. According to Microsoft, the Dynamics user
experience team worked with students at the IT University of Copenhagen on "desirability
studies" and created a "Feel IT" methodology.

The end result is that AX 2009 features a set of more than 30 "role centers,"
application views tailored for different types of workers.

Microsoft is also trying to solicit user input through a portal called Microsoft
Connect. The site gathers feedback and users can also vote on proposed features,
according to a news release.

In addition, the audience got a peek at Microsoft's on-demand offering, Dynamics
CRM Live, which is set for release in the third quarter.

Five hundred customers have been testing it in recent months, according to
Ballmer.

A demo showed off hooks into the Office suite, and also how users can plug
in outside data services such as maps from Virtual Earth into the application.
In addition, the software will have a declarative workflow toolset for designing
new business processes, according to Microsoft.

In addition, a number of online services for extending Microsoft's existing
CRM (customer relationship management) and ERP (enterprise resource planning)
applications are available. They include a payment service using technology
from Chasepaymentech Solutions and PayPal; an integration with eBay; and a search
engine-keyword marketing service.

Microsoft also announced a set of tools and services aimed at migrating companies
that have "outgrown" QuickBooks over to Dynamics GP.

Even as it rolls out new features, Ballmer insisted that Microsoft will continue
developing its entire range of Dynamics software.

"I get asked many times by customers and partners, are you committed to
this strong lineup? Yes. We have a long-term view for each one of these products,"
he said. While customers can expect newer features to find their way into all
the software, the specific attributes each one has "will all continue to
be enhanced well, well, well into the future," he added.

He described Oracle as primarily a competitor and SAP as a partner and competitor.

As for IBM, Ballmer said that "none of their actual software product lines
are today that strong. ... They're really more of an enterprise services player
that just doesn't really love our software that much."

While a large enterprise might have an SAP or Oracle implementation as its
backbone, there are "divisions or processes frankly where it is just simpler
and easier to take Dynamics AX or one of our other ERP systems and customize
and tailor it for a specific process."

Microsoft is using Dynamics AX for the Xbox game console's supply chain and
manufacturing infrastructure, and is in the process of moving many workers over
to Dynamics CRM, according to Ballmer.

But the company needs outside customers to fulfill its plans. To that end,
it announced Wednesday that it is expanding its partnership with systems integrator
EDS, hoping to sell more Dynamics CRM to midmarket and large enterprises.

Ron Rittenmeyer, CEO of EDS, claimed his business manages "more Microsoft
software than any other company in the world" -- some 3 million desktops
and 100,000 servers.

"We see the entire Dynamics thing as definitely an enterprise-grade solution.
It's matured," he said.

EDS will initially roll out the services in North America and Western Europe,
he added.

IDG News Service