Five Observations From Microsoft's TechEd Show

1. VMware Gets Props From TechEd Attendees

VMware's booth was situated on the periphery of the TechEd show floor, but the company wasn't far from the minds of show attendees. VMware's vSphere 4 won the Best Of TechEd award in the virtualization category, and it also won the Attendee’s Pick award as the product rated highest by TechEd attendees across all categories.

It's an ironic twist in light of the feuding that's been going on between the two companies in the red-hot virtualization market. At VMworld last September, Microsoft and Citrix complained about being relegated to a tiny 10x10 booth, which was widely perceived as VMware's revenge for Microsoft handing out poker chips inviting VMware customers to switch to Hyper-V at the previous year's event.

We surely haven't seen the last of this fight, but for now, Microsoft says it's confident about the momentum that Windows Server 2008 R2 has achieved.

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"The big thing we're seeing now is customers actively pursuing a Microsoft virtualized server environment," Dai Vu, director of virtualization solutions marketing for Microsoft, told CRN in an interview at TechEd. "Even if customers have traditionally invested in VMware ESX, they're now deploying Hyper-V to those environments."

2. Microsoft's New Server & Cloud Division Paying Off

Microsoft last December underwent a re-organization that included the formation of a new Server & Cloud Division (SCD) that united the Windows Server & Solutions and Windows Azure groups. Leadership of the Windows Azure development team moved from Chief Software Architect Ray Ozzie to Server and Tools Business (STB) President Bob Muglia, and Amitabh Srivastava, Microsoft senior vice president, was appointed as head of the SCD.

In an interview at TechEd, Bill Laing, corporate vice president of the Windows Server & Solutions Division, said bringing these technologies together has gone "incredibly well" and will help streamline development. "It really feels like one organization, and that was our goal," Laing said.

3. The New Mantra: Multi-Tenancy

Microsoft recognizes that its products haven't traditionally been designed with hosting partners in mind, but that's now one of the company's top priorities. "Our products were not designed to be multi-tenant, and hosting partners have struggled with how to deliver solutions to customers," Muglia said at TechEd.

Microsoft now has more than 10,000 partners using Windows Server 2008 R2 in a hosting environment, and thus far one of the features they like most is its dramatically improved power consumption, according to Laing. Hyper-V's Linux support adds further flexibility, and hosters can mix and match Red Hat and SUSE by virtue of Microsoft's joint support agreements with Novell and Red Hat, Laing said.

4. Microsoft Uses Humor In Mobile Mea Culpa

In a TechEd session on Windows Phone 7, Terry Myerson, corporate vice president of Windows Phone engineering, showed a Microsoft marketing spoof video to convey his surprise with being asked by Steve Ballmer to leave his post as general manager of Exchange and lead the Windows Phone group's development efforts. "Wait, you're not serious, are you?" Myerson says in the video. "Steve, this is [extremely] nuts!"

In the video, Myerson quickly realizes that Microsoft's mobile OS has a perception problem with end users and that the company's marketing data is hopelessly outdated.

Microsoft's message to TechEd attendees: We know we allowed Windows Mobile to become irrelevant by not paying attention to what today's users want, but we've seen the error of our ways and are going to fix the situation.

"The phone has become in many ways the most personal computing platform we all have, and we need to adapt Windows Phone to be that way," Myerson said in the session.

5. Microsoft Not Shy About Pointing Out Cisco's UC Flaws

Microsoft in recent years hasn't wavered from its view that the software-only approach trumps the IP PBX strategy of Cisco and Avaya, even as it continues to work with Cisco on UC interoperability. The two companies' classic 'frenemies' relationship was illustrated once again this week at TechEd.

Microsoft made its case that Office Communications Server 14, expected to launch by the end of the calendar year, blows the IP PBX out of the water. In contrast to Cisco's piecemeal track record of building its UC portfolio through acquisitions, Microsoft offers a truly unified solution, Gurdeep Singh Pall, corporate vice president of Microsoft's Unified Communications Group, said in an interview.

"Cisco is trying to stretch into the UC market by buying a lot of companies. They're taking all these different workloads and saying, if you squint at it, it's UC. But there's nothing unified about it," Singh Pall said.