Microsofts Grand Plan to Go Vertical

Can Microsoft transform itself from a product-focused company into a solutions-oriented one? Top brass are betting that it can.

Microsoft is shifting its entire sales and marketing strategy to focus on vertical markets.

Microsoft is reorienting its own field sales force to sell vertically; encouraging its solution-provider partners to sell vertically; and putting a sizeable chunk of the companys marketing dollars behind vertical campaigns for the rest of this year.

Its hard to overstate how significant Microsofts realignment around verticals could be. Microsoft has been an almost entirely product-focused company to date. If it is successful in going vertical, it will become a much more solution-focused one, more akin to IBM.

IBM realigned its sales and software strategy vertically, starting in late 2003. Now its Microsofts turn to try to do the same.

Approximately 40 Microsoft executives from across several of the companys seven business units have spent the last four months working out the details of Microsofts vertical plan, officials confirmed.

Microsofts goal is to have aligned half of its existing partners vertically; to have obtained vertical field commitments and training; and be well on its way to vertical lead distribution before the end of 2005, company officials said.

The companys growing emphasis on the midmarket also will have a vertical flavor. Microsoft is emphasizing to its salesforce and partners that new products aimed at companies with 50 to 250 PCs will do best if they are tailored for specific verticals.

Microsoft is readying several new midmarket products and services itself, including a new Windows Midmarket Server (MMS) SKU. The MMS product, still a year or two from delivery, will bundle together five different Microsoft server products into a single offering, much like Windows Small Business Server does.

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