Microsoft Steps On ISVs’ Toes

Bill Gates may have unwittingly rankled a few ISVs this fall while showing off Outlook 2003 at the glitzy launch of Office System. Busy highlighting new features in Outlook, Microsoft's chairman and chief software architect briefly turned to the audience and offered this aside: "You know, a lot of people used to build third-party add-ons to do this [sorting] function. But we were able to integrate it right into the platform."

Well, bravo. "Integrated innovation" happens to be Microsoft's new catch phrase. But to many of the company's ISV partners, some of whom happen to develop and sell such add-ons, Gates' words feel more like the competitive dagger twisting a little deeper.

The fact is--and while Microsoft officials will downplay it--a good many ISVs increasingly worry that Redmond is encroaching on their territory. WennSoft president Jim Wenninger is one such ISV partner casting a wary eye. A longtime Great Plains partner that now falls under the Microsoft Business Solutions (MBS) umbrella, New Berlin, Wis.-based WennSoft sells a suite of construction-industry applications. Wenninger complains that while Microsoft is adamant about wanting its ISVs to migrate their applications quickly to the .Net platform, it has failed to provide a clear road map of what solutions Microsoft itself will be taking to market. That effectively places Wenninger in limbo, he says. He's reluctant to forge ahead with an expensive .Net port of each construction module only to find out later that Microsoft is getting into some of the same markets. "We want to partner with Microsoft, not compete," Wenninger says, "but it's unclear what their road map is. There are some construction components in their Solomon product line. And if they are going after that market, we want to expand on that, not compete."

Extending or expanding the platform is a notion Microsoft is pushing heavily at ISVs. Case in point is Microsoft's recent introduction of the Microsoft Business Framework (MBF), which blurs the boundaries of the platform and third-party applications even more. Delivered as part of .Net, MBF consists of prebuilt logic and other tools that provide a horizontal foundation of functionality for many applications. The idea is that MBF acts as an on-ramp of sorts for ISVs, who can skip past the lower-level development plumbing.

"MBF lets ISVs, in a sense, outsource the R&D on horizontal functionality to us, [and] then extend the apps on top of the platform," says Orlando Ayala, senior vice president of small and midmarket solutions and partner group at Microsoft.

At the Microsoft Worldwide Partner Conference 2003 in New Orleans in October, Ayala conceded that Microsoft had done a poor job of communicating to MBS partners, pledging to present a clearer road map of "what we mean by applications and the platform" within the next couple of months. Yet ISVs still worry: As Microsoft keeps adding to its platform, can they still operate viable businesses?

"The stuff they are doing raises the question of how we fund our development work," says Mike Sayen, director of EDS PLM Solutions, Plano, Texas. "How do we recoup for being on the new [Microsoft] platform if customers are not going to pay us?"