10 Predictions For Microsoft In 2008

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8. Windows XP service pack 3 will be delayed at least a quarter

Microsoft is working on a third service pack for Windows XP, which is currently slated for release in the first half of 2008. But in light of the fact that Microsoft originally intended to release XP SP3 in 2006, most partners have adopted a wait-and-see attitude.

One system builder who requested anonymity expects Microsoft to release XP SP3 around the same time as Vista SP1, which is slated for Q1. There's also a belief in the channel, based on recent research, that PCs with Vista SP1 run slower than XP with comparable hardware, the source added.

"I think XP SP3 will wind up making the XP PC run more like Vista. Microsoft realizes that nobody wants Vista, so they're going to come out with XP SP3, which people will accidentally download because it's supposed to be 'better and improved'. Then, they'll realize they hate it, but won't be able to get it off their machines," said the source

But Todd Swank, director of marketing for system builder and solution provider Nor-Tech, Burnsville, Minn., says XP SP3 reflects Microsoft's desire to shore up the OS and its realization that some customers are staying on XP.

"If Microsoft recognizes that people are going to be on XP for a while longer, they want to make sure the experience is a good one," Swank said.

9. The release of Dynamics CRM 4.0 will have a bigger-than-expected impact on the SaaS market

With this week's release to manufacturing of Dynamics CRM 4.0 -- the first major update in three years -- Microsoft has put CRM suppliers such as NetSuite, Oracle, Sage, Salesforce.com and SAP squarely in its crosshairs.

Ryan Toenies, CRM solutions vice president at Inetium, a Minneapolis-based VAR, expects Dynamics CRM 4.0 to gain significant market share in 2008 because it offers customers the option of on-premise, Microsoft- and partner-hosted deployments.

Some Microsoft partners have raised concerns that the hosted CRM applications, which Microsoft will make directly available to customers for a subscription fee, could compete with channel partners' own offerings. But a growing number of solution providers are eager to host Dynamics CRM 4.0 themselves and offer it to customers as subscription service.

For VARs that can make the necessary infrastructure investment, the partner hosted model holds the greatest potential, according to Toenies. "If you're looking at creating a vertical solution on top of CRM, this will allow you to host and offer services," he said.

People want flexibility in the IT decision making process and CRM 4.0 gives them the power of choice, says Mike Belongie, vice president of sales and marketing at Axonom, Minneapolis.

"I think Microsoft is going to kill Salesforce with the Dynamics CRM 4.0 release. It's now a truly a multi-tenant product, and I've been closing deals with the message that it's O.K. for customers to start out with the hosted version," said Belongie.

10. It Will Be Hotter Than Hades At WPC 2008

Um Houston, we have a problem: The average July temperature in the sprawling Texas metropolis where Microsoft's 2008 Worldwide Partner Conference will be held is 94 degrees. Fortunately, partners will most likely be distracted from the intense heat by the even more intense humidity. The good news is that Houston bills itself as the world's most air conditioned city.

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