CRN Interview: Jeff Raikes, Microsoft

Jeff Raikes, Microsoft group vice president of Productivity and Business Services, discussed the vendor's plans with Industry Editor Barbara Darrow at the recent Convergence 2003 show in Orlando, Fla.

CRN: Can you outline what's going on with Microsoft's realtime communications and collaboration offerings?

RAIKES: The convergence of audio, video and the network is really going to change what people can do,the way we connect with each other,in a very positive way. A very rough analogy is when we bought PowerPoint [and got] software to create overhead [presentations]. But by the mid-1990s, it was projectors driving the new way of doing presentations.

Think of what we're doing in this world of realtime communication and collaboration when you have audio, video and the network coming together. Web conferencing is very important, but it's just the beginning of this wave.

CRN: Do you see PlaceWare [Web conferencing software Microsoft acquired in January] as an application or as part of the operating system?

RAIKES: I see PlaceWare as a service. I'm very excited about that, and so are the customers. They want someone they can tap into. Today, PlaceWare doesn't license the software; [it licenses] access to the service. You buy a certain number of seats, and then your company can run Web conferencing for training, seminars and events. In the future, as people get more used to it, PlaceWare will be used for ad hoc meetings.

CRN: Part of Groove Networks' appeal is that its [peer-to-peer] technology works through the firewall and provides secure connections. Could Microsoft use Groove's technology?

RAIKES: It's not a technology transfer in the sense that we're licensing intellectual property or [Groove founder Ray Ozzie is doing that] from us. It's more of a product design influence.

CRN: Dell [Computer] and Hewlett-Packard made some retail deals with Corel for WordPerfect Office. Microsoft had a response to that called OfficeLite, but it was killed. Can you talk about that?

RAIKES: There was some talk on whether we should do something like OfficeLite, and we did a lot of good research. But at the end of the day, we concluded that what we're doing with Microsoft Works, what we're doing with Office in the OEM area, and what we're doing with the [discounted] Student and Teacher license is the right lineup.

If you're Dell or Gateway and there's [a product whose name includes 'Office' and 'Lite'], then the [sales]person on the phone has to explain what the difference is in environments where we don't control the message. So will the customer really understand what it is they've got? I don't want that customer disappointed.

A key part of my thinking on the SKU lineup is how to maximize the opportunities for our customers to buy, and [at the same time] make sure that what they end up with gives them the highest satisfaction. Quite frankly, I had some concerns that if we didn't put more thought into it, we might end up with customer satisfaction issues. I didn't want to take that risk. I'm not going to preclude the idea that we may do something like that in the future, but for right now it's tabled.

CRN: There's a perception that Office is becoming a much bigger chunk of overall system costs as PC prices fall. Isn't there pressure to adjust your OEM pricing accordingly?

RAIKES: How many times do people compare how much the DVD costs with how much the DVD player costs? At the end of the day, what really matters is the value of the intellectual property.

If you're a small business, you might buy an upgrade at retail every two years. So you're generally paying less than a couple-hundred bucks every two years. It's less than $100 a year for a large business on an enterprise agreement [to upgrade Office]. So as a percentage of the PC cost, if they look at the whole license price, that's the thing competitors like to show. But most people buy upgrades, and if they buy it with their PC, it's generally $200 or less.

OEMs, of course, always want to look at the best way to reduce their component cost. So you'll always hear that dialogue, but at the end of the day, the customer value proposition is what's important. And I wouldn't want the OEMs' desire to get confused with what customers want.