17 December 2007
by Simon Quicke
Microsoft has finished the year with some indications that the channel is going to be supported by several product launches that should push customers in the direction of hosted services and virtualisation.
On the hosted services front, the vendor last week took the wraps off its CRM Live offering and widened its workgroups service to consumers and small businesses.
On the virtualisation front, Neil Sanderson, product manager for management and virtualisation at Microsoft, said that its decision to include the software for free in its Server 2008 release next year would change the landscape.
Until now, those resisting the move to virtualisation have been put off by cost and complexity, according to Sanderson, so the inclusion of it as part of Server 2008 might increase the number of users in the market.
"Cost is an issue and a lot of customers that are interested in it are not sure about the return and the skills and whether it will fit into their investments," he said.
Sanderson said that from a reseller perspective, the inclusion of Hyper V 64-bit virtualisation technology would lead to increased sales, bringing in new customers and encouraging 32-bit users to upgrade.
But he assured resellers that the bundled software would not result in a loss of revenue. "Although the technology is part of the OS, the management tools that are critical are not free," he stressed.
Elsewhere in the software vendor’s business, it continued to expand its own take on hosted applications — software plus services — opening up both Office and its CRM products to the web.
Darren Strange, Office product manager at Microsoft, said that after an initial wave of criticism of the vendor’s approach that was a halfway house between on-premise software and SaaS, those that had criticised its actions were now starting to move closer to its approach.
He added that it had launched its service for individuals to use Office on the web, but expected its workspace service to be taken up by SMEs as well.
Dale Vile, managing director at Freeform Dynamics, said that Microsoft had tapped into the buyer psychology by offering a hybrid model.
"If you go from one extreme to the other, moving from completely on-premise to hosted applications for your core business software, then it can turn people off," he said.
Paul White, director of Microsoft Dynamics products, said that it had launched CRM Live, which has been running in the US, offering customers the same features as on-premise versions of its software over the web.
He added that the vendor took the view that resellers should use third party specialists to run the hardware, but must ensure they offered tailored services.
"They have to work out where the value is to the customer and it is around the components that they can offer where they can differentiate themselves," White said.
Vile agreed it made little sense for resellers to invest in servers and backup technology when they could concentrate on adding extra value.
