Speaking at the Microsoft FAM (Financial Analyst Meeting) on July 27 in Redmond, Wash., Bob Muglia, Microsofts senior vice president of Server and Tools business, said Microsofts .Net platform has outpaced Java, particularly the Java Enterprise Edition, over the past five years to become the development platform of choice for enterprise development.
"Five years ago we had problems with J2EE [Java 2 Platform, Enterprise Edition]," Muglia said. However, "Weve grown from having a quarter of the market to, now, 60 percent," he said. Microsoft displayed the FAM presentations via Webcast.
"J2EE has run its course," Muglia said.
Yet, he also said that although Microsoft is strong in the database and developer tools spaces, the company sees that in both areas, "we are mature and we have high usage, but our revenue numbers are lower than our usage numbers… As we focus on the enterprise segment, we have the ability to drive up our revenue share."
Moreover, Muglia said Microsofts revenue share with its Visual Studio tool is small, but that tools like VSTS (Visual Studio Team System) will fix that. The company is also pursuing higher-end enterprise sales for its database and tools, Muglia said.
In a May 2006 study, research firm Gartner, in Stamford, Conn., identified IBM Rational as the leader in the team tools space, with more than twice the revenue of Microsoft. With the release of its Team Foundation Server, Microsoft officials said, the company is now firmly in the race.
However, competition in the team tools arena is heating up, with new entrants and stalwart companies such as IBM, Serena Software, MKS, AccuRev, TechExcel and most recently JetBrains.
Muglia also said the Microsoft Server and Tools unit will be involved in the companys move to merge software and services. "Were incubating new things like Microsoft Managed Services," he said. "This is a great business; a business that has incredible upside."
As Jeff Raikes, president of Microsofts business division, said, "Our bet is that software plus service is what customers really want."
Meanwhile, given the multiple development styles and frameworks that Microsoft faces, the company must adapt to each different approach, said Ray Ozzie, Microsofts chief software architect.
"As a company we must invest in frameworks for relevant audiences and we use our Visual Studio tools" to do that, Ozzie said.
Ozzie said Microsoft must create frameworks for different types of development. For instance, in the Web development space Microsoft has ASP.Net, and for AJAX-style development Microsoft has its Atlas tool.
Meanwhile, Muglia said Microsofts Server and Tools revenue grew to $9.7 billion in fiscal year 2006 and he expects the divisions revenues to grow to between $11 billion and $11.1 billion in 2007. To encourage that growth, particularly in competition with Linux, Microsoft has to shore up its efforts in security, Web capabilities and high-performance computing, he said.