AOH :: ISN-1134.HTM

Ballmer: Microsoft Wants a Bigger Piece of the Software,

Ballmer: Microsoft Wants a Bigger Piece of the Software,
Ballmer: Microsoft Wants a Bigger Piece of the Software,,1895,1835544,00.asp 

By Mary Jo Foley 
July 10, 2005 

MINNEAPOLIS - Microsoft may love its partners. But that isn't stopping
the company from continuing to encroach on areas that have
traditionally been its partners' turf.

At the final day of Microsoft's worldwide partner conference here on
Sunday, Microsoft CEO Steve Ballmer kicked off his morning keynote
with repeated shouts of "I love you, partners!"

But shortly thereafter, Ballmer warned the company's channel partners
that Microsoft has its sights set on some markets that partners have
had to themselves until now. Ballmer said that Microsoft is planning
to make deeper forays into the business intelligence, document
workflow, security and managed services arenas in the coming decade.

Ballmer's revelations should come as no surprise to company watchers.  
Microsoft increasingly has been adding analytics capabilities to more
of its Office, server and tools products in the past couple of years.

Company officials have acknowledged they are planning to add
document-workflow and security features to Office 12 and Windows
Longhorn, which are both due next year. And Microsoft's consulting
services division has been testing the first of what could become a
family of managed services that Microsoft is expected to start rolling
out later this year.

"Things will evolve," Ballmer told partner show attendees. "Our
product line and spaces where we offer solutions like business
intelligence and security need to evolve.

"We need to evolve together," Ballmer continued. "Neither you nor we
should be 100 percent committed to doing things exactly way we do
today 10 years from now. We need to commit to continue to evolve, but
evolve together. And we need to make sure we respect our mutual skills
and talents and mutual opportunities."

As part of his keynote, Microsoft invited three partners to
participate in an on-stage panel. Two of the three asked Ballmer about
Microsoft's intentions regarding competition with its partner base.

"We [Microsoft] are extending the footprint of our horizontal, very
general business products," Ballmer acknowledged. "But we don't think
that should be an issue for us and the partners in this room. Maybe an
issue between us and Oracle, or us and SAP, but not between us and
partners in this room."

On the line-of-business applications front, Microsoft has been trying
to steer its partners to build on top of its ERP (enterprise resource
planning) and CRM (customer relationship management) products, as
opposed to continue to develop their own application technology.  
Ballmer said Microsoft's goals is to continue to work equally well
with partners whether they integrate vertically with Microsoft's stack
or prefer to build horizontally.

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