The Wild West is a recurring motif at Microsoft's Worldwide Partner Conference (WPC) in Denver, where buffalo images, cowboy hats and mechanical horses dot the show floor and Microsoft channel chief Allison Watson rode on horseback across the plains (in a pretaped video) to arrive at her opening keynote. It's an apt metaphor for the new frontier Microsoft hopes to lead its partners across: the changing landscape of the business software market.
With on-demand, hosted applications vendors aggressively building market share in the consumer, small and midsize business markets, Microsoft shifted course several years ago and began developing a hybrid "software plus services" strategy to respond to the SaaS (software as a service) threat. But partners have grumbled that the strategy is murky -- before WPC, a number said they felt Microsoft hadn't been clear about its respoonse to the software as a service movement.
That fog was intentional, Microsoft COO Kevin Turner told WPC attendees in his closing keynote.
"A year ago we launched and started talking about software plus services. We didn't give a lot of details to you. I got people that wondered if we just held our cards close to the vest and didn't share it. I'm standing up here today to tell you, the reason we didn't share that much with you is we didn't have it figured out," Turner said. "We're still figuring it out. Next year we'll be smarter about it than we are this year, and this year we're smarter about it than we were last year."
The message is still evolving, but several partners said WPC has finally helped clarify Microsoft's strategy and tactics. In numerous presentations at the show and in a white paper published this week on "Microsoft Software + Services Partner Opportunity," Microsoft has begun laying down a blueprint for its strategy, which involves eventually adapting all of its software to work in three different delivery models: traditional on-premise deployment, partner hosted, and hosted directly by Microsoft, as its forthcoming CRM Live service will be.
"I still need to see more of the steps, but at least they've solidified it -- and I give them credit, because I think it's the most realistic approach I've seen in a long time," said Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based Gold partner. "To actually come out and say 'this is a hybrid approach: it's not all one thing, or another, but it'll be somewhere in the middle.' I found this to be surprisingly realistic in a very good way."
"I would say that everything I've seen thus far is far more articulate and far less confusing than what we saw six months ago," said Tom Williams, director of strategic alliances for Web analytics technology developer WebTrends, in Portland, Ore.
Williams has had a front-row view of Microsoft's efforts to shape and clarify its software plus services approach: He serves on the Live Partner Advisory Council, an in-the-trenches group that gives Microsoft feedback about its hits and misses.
"We spent the entire first day beating them up about the fact that their branding strategy was so disjointed," Williams recalls.
NEXT: How Partners Fit Into Microsoft's Live Strategy