Microsoft feeling the open source heat

Microsoft and its partners must do a better job of communicating the features of the software giant's latest platforms and educating customers on how technology can help them, Microsoft boss Steve Vamos told hundreds of attendees at its partner conference in Queensland.

With Microsoft under pressure from a rising Linux and open source movement in this country, Vamos said that the thinking around open source is moving "from a philosophy to a reality."

"We need to make sure that we are actually out there getting customers to understand the value of our latest platforms. This is not a philosophical debate -- it's about, 'How do I save money and meet my business' needs?'" Vamos said. "As an industry, as a company and as partners, we need to do a much better job helping customers [understand] how technology can help them."

He admitted that in the past, Microsoft had been product and feature-focused and sometimes "complex" to deal with. "But the best way to become a great product company is be more customer-focused. Technology can have an enormous impact around knowledge and communication and the way we do things -- we need to do a better job," he said.

Vamos said the mindset of customers is now more about how to save money and use those savings to do more, adding that the IT industry won't see enormous increases in IT expenditure over the next few years.

He said Microsoft and its channel partners needed to articulate features to customers and take a more strategic and long-term view.

Microsoft itself had to simplify the way it does business "internally and externally," he said.

"What doesn't change and is a fundamental premise of our business is partnering. Is our partner business 10 out of 10? No it's not," he said.

He added that Microsoft needed to do a much better job of projecting the "good things in our company that we haven't done in the past," citing recent Microsoft-led schemes such as "Partners in Learning" which in conjunction with state governments aimed to keep school teachers trained in technology.

"At the end of the day, we don't want people buying alternative products because they're not comfortable dealing with Microsoft.

"I don't accept that Microsoft is anywhere near [market] saturation in any aspect of our business -- we want to become as good a relationship company as we have been a technology company," he said.

As an example, Microsoft Business Solutions (MBS) division holds a tiny five percent share in the ERP and CRM market in this country behind the likes of SAP, PeopleSoft and Oracle.

Microsoft also planned to increase "industry segment marketing" in its commercial business over the next year with a specific focus on the legal, manufacturing and retail verticals.

"These are three areas that are going to start to become a core part of our go-to-market engine when you're talking about mid-market and corporate customers," he said.

In the meantime, Vamos earmarked security, mobility, web services and service-oriented architectures as major technology growth areas over the next few years.

He cited Meta Group research that found that over eight percent of IT budgets are now being allocated to security while "we tend to take for granted how quickly mobility is picking up."

Vamos said that web services would arrive when the "technology that drives it becomes invisible."

"We've got a long way to go before we get there but that's where Microsoft is investing and that's where Microsoft has a competitive advantage," he said.

Sharing the stage with Vamos was Kerstin Baxter, director of Microsoft Australia's partner group, who pointed out that many local partners were "not taking advantage of what we have out there" referring to rebates and marketing development funds. "We know there's still confusion around [partner] profiling and getting into the program," Baxter said.

Baxter highlighted that channel partners should contact the vendor for assistance in order to close deals in competitive situations.

Byron Connolly travelled to the Sunshine Coast as a guest of Microsoft Australia.