CRN Interview: Martin Taylor, Microsoft

As general manager for platform strategies at Microsoft, Martin Taylor leads the company's charge to contain open-source technology. In an interview with Editor In Chief Michael Vizard, Taylor discusses the lessons Microsoft is learning from rising customer interest in open source. Here is an excerpt:

CRN: One could say interest in Linux is the market's way of telling Microsoft that Windows pricing needs to change. What message do you think the market is trying to send?

TAYLOR: I would actually look at a similar construct but a different answer. You have to ask one of two questions. Is it either a) Windows is priced too high, or b) are we offering the right product at the right price point? We position Windows server as a multifunction server that does a variety of things. So in some ways, we've got a McDonald's No. 5 super-size offering that costs $2.99, and someone just wants a Diet Coke that costs 99 cents. So do we cut the entire super-size No. 5 down to 98 cents, or do we try to find a way to just give somebody the Diet Coke if that's what they want?

From that perspective, there are a couple of interesting phenomena happening. As companies try to monetize Linux,i.e. Red Hat,the Red Hat enterprise server and their advanced server costs as much or more than Windows server, if you want it to be supported with security and everything else. If you model our security and our support and everything else, they actually cost more. It's not so much Linux monolithic vs. Microsoft. But it's Novell SUSE with one price point, one set of functionality; Red Hat enterprise server with one price point, one set of functionality; and Windows server. When you understand what you are paying for and where, then you see the relative price pressures come into play.

CRN: What about Linux on the desktop? Is that a real competitive threat to Microsoft?

TAYLOR: We definitely see more conversations happening about Linux on the desktop in public-sector scenarios, primarily in emerging markets. A way to think about that is, there are Microsoft Office and Microsoft Windows in their current form and state. Is that the right set of products to deliver in an emerging market where you have a different set of challenges, from technology adoption, license pricing and usability scenarios?

CRN: Given Linux's momentum, why do solution providers need to stay focused on Windows?

TAYLOR: By design, we've always moved out service and support from the core part of our pricing because we invest in the channel quite heavily. Our value-add is really in the R&D in the technology. So if you see price pressures come in on the services side of the model between the three companies, what ability do you have to sustain any type of economic model in which you don't end up going into a tailspin five, seven or 10 years down the road, if the only place where you extract value is in the services without the technology R&D? The opportunity is building, innovating, installing and customizing all of those things that our channel partners do on top of the R&D that Microsoft is delivering. As a channel partner, you've got to have two questions: Do you ride Microsoft's R&D wave, or do you ride this Red Hat Linux wave, knowing there's going to be some potential conflict with a vendor?