Microsoft Sells Vertical Approach to Partners

The company plans to develop a full business applications stack, and hopes to bring partners on board.

MINNEAPOLIS—As Doug Burgum, the senior vice president in charge of Microsofts Business Solutions group, began his abbreviated keynote address to some 6,000 partners Friday at Microsofts Worldwide Partner Conference here, more audience members were leaving than listening.

Generally an insightful, if rambling, speaker, Burgum got right to the point in todays address: Any partner who has not developed a Business Solutions practice should think about it; any infrastructure partner who doesnt plan to sell business applications should partner with another associate who does.

"Its not just a nicety, it becomes a necessity for us moving forward—for us to develop the full stack. And partners need to develop a full competency," Burgum said.

"The business opportunity will expand if we can offer the full stack to customers, particularly when Oracle [Corp.] is coming in and offering infrastructure, tools and a full portfolio [of applications] and SAP [AG] is competing against Microsoft on portals."

Microsoft Corp.s strategy of developing the full stack from an applications perspective is twofold, but clearly interrelated.

On the one hand, the company is working to service-enable its four Enterprise Resource Planning suites—Great Plains, Navision, Axapta and Solomon—so the applications can be more easily interoperable with Microsofts infrastructure stack (and to enable users to quickly change processes as their businesses change—not an unusual message.)

On the other hand, Microsoft is working to provide vertical solutions, developed by partners, that sit on top of the four Business Solutions suites—and, eventually, the single merged suite proposed under Project Green—that again better interoperate with the stack.

The latter effort seems a more difficult prospect, given Microsofts propensity for selling software and services through a vast channel network (96 percent of the companys revenue flows through the channel), as opposed to taking on those functions internally.

The hitch: Microsoft has to convince partners that its vertically oriented full-stack approach is the right one, and that they should play along—and move quickly.

"Its important to bridge the Classic [Microsoft infrastructure] side with the Business Solutions side, wrapping that with partner solutions, and in many cases, vertical solutions," Burgum told partners. "The connective power is one of adaptive, insightful processes. We deliver that through the entire stack and that becomes the winning strategy for you, moving ahead."

Burgum also moved to assure partners that Project Green is not going to get in the way of profitability, despite its kludge-y details and long-awaited release date (somewhere around 2008).

"We have Green now. Green is here now and you can sell with confidence; customers can buy with confidence, and we feel great about our road map," Burgum said.

/zimages/6/28571.gifRead more here about Microsofts Project Green.

To clear up any misconceptions about this next generation of Business Solutions software—there were plenty around Green until Microsofts spring Convergence conference, when executives there finally released some details—Burgum reiterated the road map to date: Wave One of Green will consist of a common user interface across all the suites, utilizing SQL and Business Intelligence capabilities.

From the portal strategy, Green applications will utilize Web services to make sure that all Microsoft products are easy to connect with each other, and with any legacy applications users may have.

/zimages/6/28571.gifClick here to read more about reactions from Microsofts partners to the companys vertical push.

As development efforts march into 2008, there will be more common elements to all the products; eventually the suites will arrive at a point where there is a converged solution, Burgum said.

In the meanwhile, with details of Green still sinking in, Microsofts verticalization effort remains for partners to grasp—an understanding that seemed to be eluding many this week. Burgum strove for clarity.

"Microsoft has had a product approach and it was up to you to go out and sell them," he said. "Now we want to move to the solution approach—from technology to technology plus vertical. We want to build out the best vertical relationships. Thats the theme of where were taking the whole company."

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