Microsoft Reveals More About Managed Services Plans

By Peter Galli  |  Posted 2006-11-14 Print this article Print

Microsoft plans to make its managed services offering available to more customers in the next year, but the services will focus on messaging and collaboration rather than on desktop management.

BARCELONA, Spain—Microsoft plans to increase the number of customers that it provides managed services to over the next year, but these services will focus primarily on messaging and collaboration rather than on desktop management.

The companys foray into managed services to date "has been a real learning experience. To say that we found a few issues would be an understatement," Bob Muglia, Microsofts senior vice president for servers and tools, said in his keynote address at IT Forum here Nov. 14.
To read more about how security took center stage at IT Forum Europe, click here.
Microsoft started its managed services business with a pilot program with Energizer Holdings Inc., in St. Louis, which was then expanded to include XL Capital, in Hamilton, Bermuda. That Energizer program lets Microsoft keep some 6,000 desktop systems up-to-date by downloading patches, deploying the latest software, managing e-mail, electronic document storage and the associated servers, and providing help desk and other user support. The software maker, based in Redmond, Wash., also believes that a substantive number of customers will, over time, want to acquire some of their IT infrastructure as a service they paid for, Muglia said at a press event following his speech. Microsoft believes the opportunities abound for its partners. Click here to read more. "But I need to say that these will not be customized environments, but rather environments with a reasonably limited number of choices that a customer could acquire. This trend is going to happen in a major way in the years ahead," he said. While the idea of managed services had received a lot of attention in 2000, it was not successful then as the infrastructure and the software were not ready "The most important thing for us is that, as this happens, our software is used as part of the process," Muglia said. Microsoft has also learned a lot from its foray into managed services, including that its software needs to work across the Internet transparently, and with everything, and it needs to transform the way it moved data back and forth. Read more here about how Microsoft is losing Rick Devenuti, who instituted its managed services program. "We also need to focus on multi-tenancy, where the software is able to recognize that there may be many corporations being served by one or more servers in a server farm," Muglia said. Microsoft has also learned, the hard way, the complexity of desktop deployment within this environment. This is one of the reasons that it acquired Softricity and the SoftGrid technology, which will be a major enabler for software as a service for desktop management as well as reduction of costs for on-premise desktop management. While some Microsoft partners are concerned about the prospect of competing directly with Microsoft, Muglia made clear that Microsofts entry into this space was not designed to compete with its hosting partners, and would initially focus on desktop managed services and not applications. Click here to read more about how some partners have reacted to Microsofts move into managed services. But Muglia did admit that the company would look at the application side down the line "at least from a learning perspective." There is also no lack of customers looking to Microsoft to provide managed services to them and, as its capabilities grew, the company would take on more of them, he said. "This has the potential to be a substantive market over time and we think of it as an incremental opportunity on top of our software business. It primarily helps customers save on their internal labor costs, and that is where the dollars will transfer from. Were bullish on this front, but it will take a little while," Muglia said. Check out eWEEK.coms for the latest news, reviews and analysis in Web services.
Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel