Dual Challenges

Starting Sunday, a few thousand Microsoft Business Solutions (MBS) customers and solution providers will gather for Convergence 2004 at the hermetically sealed Gaylord Palms Orlando resort to hear the latest on the MBS game plan to dominate business applications for small and not-so-small companies.

Later in the week, developers will flock to the combined VSLive and Mobile Developer conference in San Francisco.

Microsoft executives will have a lot of talking to do in both venues.

Publicly, Microsoft is pleased with MBS revenue growth for its latest quarter ended Dec. 31. MBS sales were up 41 percent year-over-year to $190 million from $135 million. But privately, the company is none too perky. Asked if Microsoft was disappointed with MBS performance thus far, one source close to the company said, "That is a [expletive deleted] wild, wild understatement."

It's too soon to say how the move to open Microsoft CRM sales to the full Microsoft channel will impact those numbers, but many observers say the company is far off the pace it needs to achieve if it wants to hit its goal of fielding $10 billion in business applications business by 2010.

There are bright spots: several instances of MBS and Microsoft "Classic" partners teaming on solution deployments. That fruitful collaboration is the goal of Microsoft's channel push. But angst remains among solution providers about their role in a merged channel program and the worry that Microsoft sees all software sales,even those of complex and interconnected business applications,as relatively fast-turn volume deals.

On the development front, many solution providers are seriously rattled by the latest slip of the next-gen Visual Studio and SQL Server products into 2005. While most had written off Longhorn promises as too futuristic to tout, they have long talked up the closely tied development suite/database tandem to customers. Now, even some true-green Microsoft developers speak wistfully of the open-source development model, which they say makes updates available more efficiently with less trauma.

Channel and developer anxiety now are serious concerns for those in Redmond, Wash. Make no mistake: Microsoft knows it. The question is how it will react.

How do you think Microsoft will fare on these issues? Let me know at (781) 839-1223 or via e-mail at [email protected]