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6/24/2005
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Microsoft Toys With Managed Solutions

Even as it reorganizes sales to serve specific industries, Microsoft's services group is experimenting with "managed solutions" it claims could buoy partner profitability and decrease customers' costs.

Even as it reorganizes sales to serve specific industries, Microsoft's services group is experimenting with "managed solutions" it claims could buoy partner profitability and decrease customers' costs.

Microsoft's relationship with battery maker Energizer Holdings is just the first in a handful of experiments in which the vendor will provide desktop management services, said Rick Devenuti, corporate vice president of Microsoft's Services and IT unit.

Under that deal, Microsoft's IT department is securing and handling Energizer's desktop images, Exchange and SharePoint implementation.

In an interview with CRN last week in Redmond, Wash., Microsoft CEO Steve Ballmer said the company is studying ways to wring costs out of managing the desktop for every size of customer, but he stopped short of disclosing a sweeping managed services strategy.

"We said to ourselves, 'Look, we have to engineer a solution,' " Ballmer said. "Whether we deliver it, who knows? Whether our partners deliver it, who knows?"

Rather than supplant partner opportunities, Devenuti maintains that "managed solutions" that emerge out of projects such as the one at Energizer, plus other packaged intellectual property from the Microsoft services organization that shows up in the form of SKUs, will free up partners from commodity IT services and refocus them on higher-margin opportunities higher up the software stack.

"We're at the very earliest stages of the concept of how do we take what we do, turn it into a Microsoft-proven solution, deploy it so that we understand it and then roll it out to partners with the right accreditation so a customer can say, 'I want that thing,' " Devenuti said. "And they can buy it from [Microsoft Services] and they can buy it from a type of partner."

One of the first SKUs likely to emerge is one for Exchange deployments that has been under development for about four months, Devenuti said. The offering would assess and tune factors within the customer's environment such as storage, bandwidth, operational processes, IO and Active Directory that help ensure successful implementation of Exchange, he said.

"A partner can show up with a Microsoft-proven solution and know that it will be the same experience," Devenuti said. "The thing about SKUs, if done well, [is there's a] predictable outcome: repeatable implementation."

Some observers said Microsoft is under competitive pressure to reduce operational costs and increase IT efficiencies for Windows desktop users. Since launching corporate Linux desktops last year, Red Hat and Novell have announced services for desktop management and other IT functions and have criticized the Windows desktop environment as too costly and complex.

James Fogg, owner of JDFogg Technology Consulting, a solution provider in Wilmot, N.H., said Microsoft's "managed solutions" ambitions have stirred an internal debate among partners. Some buy the argument that the pie is big enough for all, Fogg said, but he is nervous about Microsoft's interest in managing corporate desktops and its Windows OneCare all-in-one PC health service for consumers and small businesses.

Patch management and antivirus/antispyware services have become lucrative for VARs, Fogg said. "For one or two people in a small consultancy, that's a big part of their business," he said. "And I see it as a threat to midmarket customers. It'll take Microsoft a little while to get good at it. But managed services is a lucrative opportunity they haven't tapped into yet."

Bob Suh, chief technology strategist for global technology and systems integration at Accenture, Wellesley, Mass., said, "There are many reasons Microsoft provides services. Some clients making a big commitment to Microsoft technologies insist on [the vendor] playing a prominent role in its successful implementation."

HEATHER CLANCY contributed to this story.

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