Ballmer Wants Partners To Help Microsoft Forge New Markets

Cheerleading as always, Ballmer also played up major releases of familiar products coming down the pike, including Windows Vista, Internet Explorer version 7, Office 2007 and Exchange Server 2007. While poking a few jabs at Microsoft's expense for Vista's interminable delay, Ballmer nonetheless told partners that the operating system, coupled with Office 2007, is the perfect core platform for them to construct and deliver a whole host of higher level products and services.

In fact, he urged partners to think of an integrated approach to selling Vista and Office -- along with other products -- to pack the biggest punch for customers.

"I've moved to both Vista and Office together and, trust me, it's the way to go," he said.

As for the contention that Vista isn't as relevant to partners right now because it's positioned primarily as a consumer-focused product, Ballmer says hogwash.

"Some say partners do not care about the consumer launch, and I say that's all wrong," he said. "If we have a strong consumer launch, it creates the air cover where people say that they want this software at work. So we are making a massive investment at both the consumer and business level."

Ballmer made some specific product announcements, including the hosted version of Microsoft Dynamics CRM Live, which met with loud applause from partners. The Live version of CRM, which is thin-client based and runs from a browser, is due out in Q2 2007; according to Microsoft, it's expected to provide major integration and customization opportunities for partners. Ballmer also touted the release of Small Business Server Release 2 and Windows Live Search, a service that commingles search results from the desktop, intranet and Internet. It's heading into beta in July, he said.

More than anything, Ballmer looked to rally partners behind the ambitious list of new markets that Microsoft is looking to penetrate in its quest to find new sources of growth beyond its flagship -- but highly mature -- Windows and Office franchises.

Among them, Ballmer cited the search and collaboration markets, which Microsoft plans to anchor with its Sharepoint Portal Server 2007. He announced a new QuickStart Program for Microsoft Search to help get partners up to speed on the tools and skills sets. And to date, the company has signed up 35 partners, including Wipro, FileNet and BearingPoint, to work with Microsoft on ways to exploit a $13 billion opportunity for search in the enterprise space.

Beyond search and collaboration, Microsoft is also targeting markets -- not unsurprisingly -- that put it in competition with best-of-breed vendors. That includes the security space, which Ballmer describes as a strategic push for the company this year, along with unified communications (think VoIP, mobility).

"While there will continue to be healthy co-opetition [with best of breed players like a Symantec], a rich security offering from Microsoft will help customers and give incredible alternatives for partners," he said, acknowledging that some of the conversations VARs will have with existing vendor partners about adding Microsoft wares might be "uncomfortable."

Unified communications is one such area where folks like Cisco already play heavily. Bill Gates first rolled out Microsoft's intentions in the space several weeks back. Ballmer emphasized the strategy for partners, explaining that the unified communications push will center around the following products: Office Exchange Server 2007, Office Communication Server (renamed version of Live Communication Server), Windows Mobile devices with built-in VoIP, and a forthcoming "Roundtable peripheral" that enables interactive online meetings.

Perhaps more than any other initiative on Microsoft's plate, the "Live" online software services push has created the most confusion -- and in some cases, trepidation -- for partners. Ballmer took pains today to assuage any concerns, calling the transition to a services-based software model, which includes advertising revenue and user subscriptions, a long road ahead that will find many places for partners to plug in.

Ballmer envisions a model where Microsoft hosts some services in its data centers and partners do some hosting of their own. Services will be resold through partners, and a major opportunity will unfold around the integration and customization work that will need to be done on top of the vanilla services offerings. Hence the positive reaction to the Microsoft Dynamics CRM Live, which is expected to fuel customization opportunities for partners.

"We are 100 percent convinced that this is the transition our industry will make over the next five to the years," he said. "That requires that we bring you, our partner community, along with us. We don't see this as a world we do everything ourselves."