Microsoft Moves Managed Services Leader Into Server Group

Ron Markezich, vice president of managed solutions and co-CIO at Microsoft, is relinquishing the CIO role and, along with 500 Microsoft IT people focused on managed services, is moving into the company's Server and Tools division. Markezich will report to senior vice president Bob Muglia.

The upshot of the move, announced internally on Monday, is that Markezich will take sole ownership of MIcrosoft's emerging managed services efforts, and Stuart Scott will become the sole CIO, a company spokesman said. Scott and Markezich shared the CIO post.

Last week, Markezich's old boss, Rick Devenuti, announced his retirement, effective at the end of this calendar year. Together, the two executives drove Microsoft's managed services strategy.

That effort, pegged as a way to help Microsoft develop and deploy managed desktops and e-mail in heterogeneous accounts, was viewed as a conflict with systems integrator and VAR partners, despite Microsoft's contentions that partners were involved at the test-bed sites: Energizer Holdings and XL Capital.

Both Hewlett Packard and Siemens are working with Microsoft on the Energizer effort, for example, said Ed Cummings, senior director of customer offerings for Microsoft Managed Solutions.

Several partner sources close to Microsoft said the Redmond, Wash., company had learned via these early implementations just how hard this work is and, as a result, is moving toward more of a partner-led model. Cummings and group spokesman Tom Ryan said there has been no change in strategy.

"We are very early in the process," Cummings said. "What we've done with the two customers at this point is learning how managed desktop services work. We're learning the business to the level our partners already know. Then if we start thinking about advancing the state of the art, we'd want to do that with our partners."

Managed services are a priority for Microsoft, which has traditionally garnered its revenue through the license sales of its software. But with the proliferation of broadband, more VARs and vendors are looking at hosting and managing applications for customers.

Whereas Salesforce.com and other new-age software providers are self-hosting the infrastructure and applications for customers, Microsoft has to weigh the consequences of doing that against the damage it could do to its license-driven partner model.

On the consumer front, Google's advertising-supported services-in-a-cloud strategy also is forcing Microsoft and other traditional software vendors to rethink their delivery modes.

One longtime Microsoft partner, who requested anonymity, said the software giant's shift of managed solutions into what is essentially a product group shows that the company wants to make these solutions deliverable via channel partners.