Microsoft's future plans quizzed by partners

Steve Ballmer rallied Microsoft partners in his trademark, high-energy style, but not all partners got what they wanted from the...

Steve Ballmer rallied Microsoft partners in his trademark, high-energy style, but not all partners got what they wanted from the software maker's chief executive officer.

"We have had together what I think is absolutely one of the most fantastic years in Microsoft history. I want to say thank you to the most important group out there, you our partners, great job!" Ballmer yelled from the stage on the final day of Microsoft's second annual Worldwide Partner Conference in Toronto.

Ballmer shared the stage with three Microsoft partners and answered pointed questions asked via the conference website from others. Partners quizzed Ballmer on issues including the company's plans to deliver services, its commitment to Microsoft Business Solutions (MBS), competition from Linux and practical issues when it comes to selling.

Earlier this week, Microsoft announced a revamped and expanded services offering. Services are the bread and butter of many partners, so Ballmer was asked if Microsoft intends to compete by throttling up its services business.

"We are not in the services business. We think it is important for a variety of customers and partners to be able to put technical skin in the game. We happen to bill for some of that skin, that is [Microsoft Consulting Services] is all about. If we were in the business of services, we would run this thing completely differently," Ballmer said.

Partners selling Microsoft Business Solutions' ERP, supply chain and CRM offerings, were still shaken by Microsoft's merger talks disclosed in June with ERP firm SAP, even though the companies decided against a combination.

"Nothing about that discussion takes anything away from where I think we are and the enthusiasm that I have for what we're doing with MBS in the midmarket and small businesses. We did not approach SAP because we don't like that strategy, we love that strategy," Ballmer said.

Microsoft's decision earlier this year to make Microsoft CRM part of its volume licensing programme and to cut the margin paid to partners for up-front sales also came under fire. One partner asked Ballmer to consider reversing that decision.

"No," Ballmer said. Microsoft CRM is part of the volume licensing programme because many customers who want to install the CRM product themselves, without calling in a Microsoft partner, Ballmer said.

Ballmer did promise partners that ERP and supply chain products will not be moved to the volume licensing programmes.

"There are no plans for the foreseeable future to do anything like this with ERP and supply chain, those will stay in the more narrow distribution, out of volume licensing," he said.

Partners asked Ballmer how to compete against Linux, which its backers say is more secure, cheaper and simply better than Microsoft products. Ballmer's simple answer was to look at where you make money today.

"Today, where does the opportunity exist? Today, what is winning the lion's share of all design wins on the server and is absolutely winning virtually all of the design wins on the client? Is there a question?" Ballmer said.

Ballmer also encouraged partners to not miss out on the opportunities it will offer with the next version of Windows, codenamed Longhorn, but said partners have to be careful planning their investment and it may be too early to start now. "We're not that good at scheduling," Ballmer said. "So we're not promising a final ship date today."

Microsoft has set 2006 as the target year for the Longhorn client, already a year later than the company originally planned.

Some partners attending the event had hoped for some more good news for their specific businesses.

"I don't like the way Ballmer answered the question on Microsoft CRM," said Celso Souza Isberner, a partner at UniOne Consulting, a Microsoft Business Solutions partner in Sao Paulo. "I disagree with the way Microsoft started offering volume licences for CRM."

Mark Rotman, president of Messageware, would have liked to hear more from Ballmer about classic, infrastructure partners. Messageware sells products to improve Microsoft's Exchange e-mail server.

"Sounds like Microsoft Business Solutions is number one this year," Rotman said. "I was hoping to hear something else, we're a horizontal infrastructure player." Specifically, Rotman came to the partner event to hear how his company can get more attention from Microsoft in selling its product globally.

Microsoft next partner event is scheduled for 8 - 10 July in Minneapolis.

Joris Evers writes for IDG News Service

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