Microsoft: We Can't Do .Net Alone
crn.com
Microsoft, arguably still the world's most powerful software company, is getting poised to trickle the first concrete pieces of its .Net platform and toolset,Windows XP, Windows 2002 and Visual Studio.Net,into the marketplace later this year. But the greater challenge, observers and company executives say, lies outside the R&D lab.
Microsoft's Ian Rogoff says partners' efforts are key to the software giant's .Net agenda.
The paradigm shift from packaged software to Web services is far greater than the leap from DOS to Windows more than a decade ago. And while Microsoft fends off concerns about the security and reliability of its .Net technology, it is keenly aware .Net will become .Not if the company cannot corral a village of ISVs, solution providers and service providers to work together to build .Net and HailStorm-based Web services.
If that village should fail, Microsoft will fail, executives acknowledge. "This is the scary part. If our partners don't move, and don't move fast, Microsoft doesn't get .Net out there," says Ian Rogoff, vice president of Microsoft's Worldwide Partner Group. "If we don't, our servers, our technology and our toolset gets killed."
Quietly, Microsoft is harvesting these partner ecosystems to create a ".Network effect" around its next platform. Coined by Microsoft's marketing machine, it is deemed critical to making .Net as prevalent as Windows. So much so, in fact, that Microsoft Chief Software Architect, founder and Chairman Bill Gates will make a rare appearance at Fusion 2001, the company's annual partner conference in July, in an attempt to bring his lofty vision of "Web services in the [Internet] cloud" a little closer to earth for those charged with transforming the .Net blueprint into money-making solutions.
From a technology standpoint, the set of XML-based HailStorm services Microsoft unveiled in March and its B2B Corporate Federation Services, due in 2003, represent Microsoft's new OS offering for the Internet. These .Net Foundation Services in the Internet cloud are where software developers and solution providers can add value,and continue to sell Windows clients and servers as the end points.
And many more Microsoft-branded Web services are under construction, including Storage.Net, Sync.Net, Voice.Net, Visio.Net and .Net payment services, Microsoft sources confirm.
"This revolution is caused by the Internet, but the enabling technology is .Net," says Ronan Sorensen, director of strategic technology at Plural, which has a Microsoft .Net engagement for some financial institutions, including Simplexity, a brokerage and former Unix shop. "It will have a profound impact on how companies like ours design their solutions. It's very different because the opportunities that can emerge with this new platform will enable a new type of application."
The .Net Solutions Roadmap, which will be unveiled for partners at Fusion 2001 in Anaheim, Calif., will detail prototype business models, partner chains and new tools designed to ease the burden of creating these new Web services,now being dumbed down by Microsoft as "next-generation business applications. "
While Microsoft has a natural advantage tying its .Net services to its multimillion installed base of Windows and Office users, many observers view the .Net platform as more marketecture than reality. "HailStorm is still just on the drawing board," maintains Drew Brousseau, an analyst with SG Cowen. "Right now, it's an interesting research project. But it's quite a ways from seeing any revenues or profits."
But by most accounts, there's going to be plenty of business for .Net and HailStorm solution providers in project management, aggregating Web services (without development work) and customizing Web services for a variety of business processes. In addition, there are opportunities in integrating enterprise applications into the XML world and introducing customers to .Net by installing Windows XP on the client and Windows 2002 on the server. Windows XP, for instance, will offer integrated hooks into Microsoft Passport.
"I don't see how this can circumvent VARs. Somebody has to build these systems," says Galen Schreck, an e-business infrastructure analyst with Forrester Research. "Anything that is complex to deploy can't be all that bad for VARs."
Complex, it is. And risky.
Calypso Systems, Chicago, is one solution provider that has built a blueprint for a prototype next-generation business application that spans beyond the corporate firewall, over the Internet cloud and across service provider data centers. The mock application, which illustrates a loosely coupled XML document-based Web service, allows a "distribution of specialties" among the partner chain of ASP/solution provider, XML translation service, network bandwidth provider, ISV and, finally, the service provider, Calypso executives say. Moving from blueprint to execution, however, is another matter.
"HailStorm doesn't begin and end with the services Microsoft outlined, and the most complex development of B2B services is behind the scenes. HailStorm is not complete in any way," says Chris Kaufield, business strategist at Calypso. "Microsoft has to rely on trusted solution providers to fill the back end, and the solution provider has to weigh the risks about who to be associated with as a partner."
That includes the technology supplier, Microsoft, which is trying to control and grow various segments within the ecosystem.
Over the past year, Microsoft's $1.1 billion purchase of Great Plains Software and pickup of nCompass Labs was aimed to further its .Net agenda.
Microsoft's Great Plains division, for example, is transforming the advanced planning engine of its order processing software into a .Net engine that will ship next year. Its client-based Explorer.Net services such as BusinessDesk is being engineered to mine data from .Net Enterprise Servers and harness HailStorm services, Great Plains executives say. The nCompass Web content management system will be rebranded as a Microsoft .Net Server this fall and is being re-engineered as a .Net service as well.
Microsoft's overwhelming dependence on its channel to get .Net out of the labs and into the Internet cloud has many wondering how much of that village,ISVs, service providers and solution providers included,might get swallowed up by the Microsoft empire.
On the ISV front, Microsoft says that its acquisition of horizontal business application ISVs will accelerate as it tries to push its bCentral Web services to small businesses while at the same time getting .Net services running on the client, server and in the Internet cloud at midsize companies and large enterprises.
"We're betting on five things: a rich client, software as a service, loosely coupled applications with distributed intelligence and on-premise or hosted solutions," says Rogoff. "That's the reason why we bought Great Plains. You can integrate [its software] with bCentral, with HailStorm, and all of a sudden you have on-premise bits and on-the-cloud bits."
But Microsoft's hands-on approach to evolving the distribution and reseller channels for .Net,the service provider and solution provider,is both a blessing and a curse, some say.
The stumbling of ASPs,another important part of the .Net village,has invited Micro-soft's direct participation. Microsoft, for example, is negotiating with several international and regional telecommunications and cable companies to serve as the distribution channel for .Net application services, sources say. Several large deals are expected to be unveiled this summer.
As Microsoft's own bCentral site and HailStorm and other .Net Foundation Services further commoditize the value of general-purpose ASPs, those partners are responding by refocusing on vertical markets and licensing their application delivery technology to these network service providers.
TeleComputing, a Microsoft ASP, for example, is expected to formally launch on May 29 a private-label program that will enable major network giants to license its TECOS managed service and ASP platform and Microsoft-based application delivery framework.
One telecom company that has already struck a deal with TeleComputing is a household name, sources say.
And while Microsoft will spell out the .Net Solutions Roadmap and set of associated tools at Fusion 2001, there's no guarantee that partners will execute to Microsoft's liking. As it is, the company is less than thrilled with the channel's performance in selling Windows 2000 and line of .Net Enterprise Servers into the market.
"Microsoft's not happy with solution providers' ability to penetrate the enterprise, and they're frustrated with the perception they're not a credible enterprise player," Clay Young, vice president of marketing at solution provider ProClarity, formerly Knosys, said following Microsoft's recent formation of a Worldwide Services Group.
"There's a high degree of correlation between that frustration and their desire to own the solution cradle to grave," Young said.
This gives rise to speculation that Microsoft may be eyeing solution providers, and even a Big Five consulting firm, as acquisition targets should .Net fail to muster support. While it executes deals with network service providers, Microsoft may also digest a service provider or a string of solution providers to ensure market adoption of .Net and its own online ambitions with bCentral, observers claim. The formation of a large global services organization and buildup of a massive service provider infrastructure in Redmond remains a real possibility, according to analysts from Gartner and Zona Research.
It's a position Microsoft CEO Steve Ballmer adamantly denied in a recent interview at company headquarters, noting that Microsoft has no designs to become a services company like IBM Global Services.
As they enter the .Net realm, solution providers are wrestling with more immediate concerns such as getting the necessary skill sets in-house, stimulating client interest, projecting the revenue stream for subscription-based services and keeping up with moving target subscription and/or transaction financial models under consideration. They also wonder how Microsoft will divvy up the subcontracting opportunities and are anxious to see the new rules of engagement under development at Microsoft Consulting Services.
The switch to the .Net platform will be costly and complex for solution providers, some of which remain concerned about security issues and Microsoft's proprietary approach to Internet standards. "We want to offer those solutions on a subscription basis, but I'm still nervous they're going to do what they've always done,force us to use their entire [software] stack," says Larry Alston, CTO of C-bridge Internet Solutions, Cambridge, Mass.
For many partners in Microsoft's camp, however, having a Windows client and server as the end points for .Net is a way to keep their feet on the ground as they peer into the Internet cloud. While the HailStorm set of services won't be fully operational for some time, perhaps years, many solution providers have no doubt that Microsoft can retain its ownership of the platform market in the Internet era. If it can whip partners into shape, that is.
"We started with many of our clients 15 years ago in the Unix environment and have migrated them to the Windows platform with clever technologies like Exchange, SQL, Digital Dashboard. Microsoft opened an extremely profitable area for us to do development and make profit, and this is merely the next step in the big game for us," says Richard Figer, vice president of sales for Cleveland-based S.B. Stone & Co. "It seems to me that .Net will eventually revolutionize the way that we conduct business." |
