Government // Enterprise Architecture
Commentary
8/5/2010
06:40 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: In Database Wars, Microsoft Says It Gets No Respect

Microsoft's gaining on Oracle and IBM in database revenue but can the company truly scale to help CIOs attack the deadly 80/20 IT-spending ratio?

Quick: enterprise sales made up what percentage of Microsoft's total fiscal-year revenue of $62.48 billion: (a) 24%; (b) 36%; (c) 51%; or (d) 62%?

The answer's 36%, according to Microsoft, or about $22.5 billion. Is that more or less than you thought?

The reason for the pop quiz is that Microsoft seems to feel it's not getting the recognition it deserves for its enterprise-level products and devoted a 40-minute phone conversation this week to touting its big-business achievements via some numbers and customer references and hints at future plans.

I find this interesting because it's become something of a theme at Microsoft over the past year as the company has begun swinging back—sometimes quite aggressively—at what it believes are unfair swipes at its overarching enterprise strategy, its product roster, and its perception in the marketplace.

And according to the Microsoft exec who says he's the one responsible for marketing and articulating the positions and successes of Microsoft's highest-end products, those big revenue numbers noted above are among the world's best-kept secrets.

"With our enterprise business, it's really a matter of perception and reality," said Microsoft's Eugene Saburi, general manager of product marketing for the company's Business Platform Division. "I don't think we get our due credit for all the work we do and the successes we've had—almost a quarter of the company's total revenue comes from the Servers and Tools Business [$14.9 billion for the year, or 23.8% of total revenue] and overall enterprise customers make up 36% of our revenues.

"But the perception of that is a challenge we'll have to work on," Saburi said, having noted previously that Microsoft's enterprise business is only 10 years old. "We've made a lot of progress, but we clearly need to do a better job of sharing that news and getting credit for it."

I always wince a little when I hear tech companies talk about not getting their fair share of "credit" because the ultimate proof of value and relevance is the degree to which CIOs are—or are not—voting with their wallets.

So we nudged the conversation toward the fundamental value propositions that Microsoft's enterprise business offer to its corporate customers, and Saburi related an approach that's dead-center consistent with what all of today's top IT companies are taking: helping CIOs lower the cost of infrastructure and liberate precious IT dollars to apply toward growth initiatives.

"This whole 80/20 problem—we've even seen some companies where it's 85/15—is a big priority for our customers and for us and we're trying to help them flip that ratio," Saburi said, referring to the crushing percentage of IT budgets that have to be devoted to maintaining and servicing low-value systems and old, creaky infrastructure.

And then, in what's either an intriguing paradox or perhaps simply a reflection of the emergence of The One True Way for all IT vendors to take, Saburi's overview of how Microsoft will try to help CIOs make that huge adjustment sounded almost exactly like the strategy that longtime rival Oracle is championing:

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"CIOs shouldn't be burdening themselves with spending all of their time worrying about infrastructure, and how they can scale it up and down, but instead on stay focused business and operational problems. They shouldn't be in the business of gluing and stitching pieces together, doing patches," Saburi said.

"That's the computing model of the last decade."

Compare that with this diagnosis of the CIOs' dilemma from Oracle CEO Larry Ellison, per our column yesterday called Global CIO: Larry Ellison & The New Oracle Rock The Tech World:

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