Microsoft Took Less Traveled Road to Enterprise Tools

By Darryl K. Taft  |  Posted 2006-04-18

Microsoft Took Less Traveled Road to Enterprise Tools

Despite having clear goals in mind, Microsoft took a winding road to finally get a foothold in the enterprise tools space.

Rick LaPlante, general manager of VSTS (Visual Studio Team System), said Microsoft "meandered down this path" to the ALM (application lifecycle management) space.

"We said lets do some modeling tools. Then we said lets go buy a big company that shall be nameless. Well, that turned out to be a bad idea. Then we said lets go do our own thing because our value proposition is integration."

The company that LaPlante would not name was Rational Software Corp., which Microsoft looked at but took a pass on. IBM then announced its intent to acquire Rational for $2.1 billion in December, 2002 and then closed the deal in February 2003.

And what LaPlante would not say, Microsoft CEO Steve Ballmer did say in an interview with eWEEK last year at the launch of Visual Studio 2005.

Click here to read part one of this series about Microsofts journey to enterprise tools.

"We looked at Rational before IBM bought it," Ballmer said. "The number of actual seats and users they have is tiny. And so if you can take some of the good concepts and put them in an ease-of-use package and at a price point that you can get out, I think developers want this stuff. You just have to make it easy enough to use and at the right price."

Despite passing on acquiring Rational, the software giant went on to woo several Rational developers to come to Redmond to help build VSTS. Indeed, sources said Microsoft courted Grady Booch, Rationals chief scientist, but he decided to remain with IBM.

Yet, what started as a simple idea to expand Microsofts presence in the enterprise is now the main driver of the companys developer division.

"We think this is clearly going to be the growth engine for developer tools," S. "Soma" Somasegar, corporate vice president of Microsofts developer division, said. "And so far life is good."

LaPlante gave a bit of history on Microsofts initial push into enterprise tools.

"I remember around 1999 I had to get in front of Bill [Gates, chairman and chief software architect] and Steve [Ballmer] and say we should go into the enterprise tools business," LaPlante said.

"And the enterprise tools business in 1999, who really cared a lot about that, right? It was an uninteresting business," he said.

"So I went to them and said we really have to do something here," LaPlante continued. "I said theres an opportunity for us because this is whats been holding people back from building enterprise applications on our platform.

"Weve got to get the platform capabilities there. And remember in 1999 we had the roadmap for how to get the platform there, but this needed to be the next big thing."

And what was Gates response? "I remember precisely Bill saying to me: What makes us think we can do something here that these other guys havent done in the last 20 years?"

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A New Approach to

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That is when LaPlante sold the companys top executives on his strategy of approachability, productivity and integration, he said.

"It was a very easy job to get these guys to buy in," Somasegar said. "The issue was what is the approach to doing it. We really took a long time to figure out how we should do this. But the fact of whether we needed to do it was a very, very easy decision."

But they all knew it would not be an easy task.

"I remember Steve saying to me in that meeting: I will have an enterprise sales force before you have that product," LaPlante said.

"And we were roughly about right. We have a good enterprise sales force now that can sell, because this is a fundamentally different approach to selling."

That is how "Burton," the code name for VSTS, was born. Microsoft did not get Grady Booch, but another Grady. Grady Leno, former project manager on VSTS dubbed the project "Burton" after a snowboard manufacturer, as snowboarding is a favorite sport of his. Microsoft unveiled its plans for VSTS at its TechEd conference in San Diego in 2004.

Meanwhile, IBMs Rational unit continues to innovate on what is the grandfather of ALM toolsets and boasts greater market share. "According to industry analysts, IBM is a leader in the application development software market with two times the market share than Microsoft," said Jeff Henry, director of strategy at Rational Software.

"IBM has been committed to this space for more than 20 years, and we recognize that our customers operate in heterogeneous environments and want to leverage their existing investments. Unlike our competitors, IBM delivers a complete software development platform that helps organizations govern software and systems development as a core business process."

Said LaPlante: "Somebody at Rational said Microsoft only has 20 years to catch up. Im like: If in 20 years the best you can do is five percent of the market at that price point, I dont think I want to follow you. Thats just not interesting."

Borland Software also is a player in the ALM space. And Marc Brown, senior director of product marketing at Cupertino, Calif.-based Borland, said he believes Microsofts mass market strategy is viable and Borland is in fact aiming for similar ground.

"Borland is trying to address the entire ALM space, which includes capabilities for the CxO, VP of app dev, PMO, project manager and each practitioner [business/IT analyst, architect, developer, QA tester and performance engineer] providing them with the tools necessary to functionally work and a high-performing team," Brown said.

"Microsoft is still building out much of their solution and today is more focused on the project manager, the architect, developer and tester. As they continue to improve their offering, they may in fact broaden their support for more roles, but it will still be limited in scope to the Microsoft platform."

Microsoft announces the release of Team Foundation Server. Click here to read more.

Carey Schwaber, an analyst with Forrester in Cambridge, Mass., said she believes Microsofts prospects in the enterprise tools space are "pretty strong."

She said Microsoft has achieved enterprise-class scalability with its toolset. However, "the biggest obstacle to their penetration of the enterprise tools market is platform support," she said.

"I dont see this challenge going away any time soon. Enterprise IT shops are heterogeneous environments, and the drive to standardization of development tools means that many will eschew tools with limited platform support so as not to unnecessarily create silos."

But LaPlante said he believes Microsofts integration story will win the company a lot of business. "People would give up best of breed anything for an integrated system," he said. "They want the data to flow from test to development to operations."

Meanwhile, "Im of the opinion that their high volume/low cost strategy will serve them well," Schwaber said. "But selling to virgin territory wont be easy."

Marcel de Vries, an IT architect at Info Support International Group BV in Veenendaal, The Netherlands, said, "When Microsoft announced they would be delivering a new set of tools that fully supports our vision on building quality software, we jumped on board with the Technical Adoption Program and worked with Microsoft to see how we could replace the engine in our software factory."

De Vries said Info Support had been using "home grown and open-source tools to do our daily job. We wanted to start to use the Microsoft tools, so we could get rid of the burden maintaining a lot of these tools ourselves.

"This enabled us to be more innovative in the configuration, setup and tuning of our software factory and not needing to worry about commodity tools that help us build and execute unit tests or run a daily build."

Another user, Etienne Tremblay, a technologist at Electronic Data Systems in Plano, Texas, said: "Our experience with VSTS as been great up to now; we have used it in three pilot projects with good success.

The product has brought a great many tools for development teams to use, namely static code analysis, unit testing, nightly builds, work item tracking, bug tracking, reporting and also a great new source control system.

"The whole of the product features greatly enhance predictability of iteration outcome."

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