Newsmaker: Gates scopes out the business landscape

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In terms of actually merging the code together, it's a reasonably conservative strategy because of this desire to preserve these other pieces and get moving very quickly so that all our customers have the new UI, which includes the role-based capability. The UI keeps...moving forward. Office and SharePoint have moved their UI forward a bit. So (the concern was) that there would be some big discontinuity. I think we've gotten past that, by and large. Certainly for the big customer bases--Axapta, Great Plains, Navision--they understand exactly how we're working with the code base.

Burgum: One of the things that Bill's worked closely with our teams on, too, is really thinking through how when we start addressing the commonality of the core business logic, of how we express that in a model-driven way back to the UI. We see (that) coming in the 2008 time frame, but we think that that's another big transformation. As Bill said, we're going to do that in a way where we preserve the business model for partners, preserve the investment to customers and get there in a very smart way.

(Our) software can scale up to cover a super, super high percentage of all businesses in the world.

Microsoft has always characterized its target market for business software as medium-size companies or departments with companies, not the Fortune 500. Has any of that thinking shifted as there's been consolidation in the industry? Oracle has been grabbing lots and lots of companies. Is it still realistic to have software that really targets the midmarket and doesn't target small businesses or large enterprises?
Gates: (Our) software can scale up to cover a super, super high percentage of all businesses in the world. When (companies) want to pick a new software application base, we will be in there competing in 95 percent of the cases. Now...there will be a small number of cases where we'll say, no, our solution doesn't have the maturity for that, we won't be pushing for that. But it's very hard to characterize. And once somebody picks one of these applications, they tend to stay with it for a five-or-more-year period. And then we're also competing to say, OK, given that you have that, let's surround that with productivity software and the other things as well. And so we'll never have this simple formula that says who we go after with our application software. And as we see opportunity, we have some of these code bases that really are scaling up to some pretty big customers.

Burgum: Our ability to scale also rides on the other great investments that are happening across Microsoft. There is a bit of a parallel with SQL Server, where there was maybe a spot where SQL was and now you see Small Business Editions of SQL doing really well, but you also see SQL scaling up into the largest of enterprises, and I think there's an opportunity for us to trail that.

Gates: Yeah, the truth is, the word "scale" is a little confusing here. The big issue nowadays isn't performance; I mean, we perform super, super, super well. It's within any vertical, how complex have you made the descriptions of products: How many tables do you have to describe that? Within any industry there might be one of the ERP packages--SAP generally more than the others--(that's) gone into more depth for somebody who wants that kind of complexity.

One of the big changes in the industry since Microsoft bought Great Plains has been software as a service, the Salesforce.com approach. Microsoft has talked about that as a capability you need to have, but not necessarily as the endgame. Is that still how you are looking at software as a service for this part of the business?
Gates: Everything Microsoft does, over time, will be available either running as a server or you can run it on-premise or it can be hosted. For most of our Business Solutions things, we have partners who are doing some of that hosting today. There are things that we're doing in our software to make that hosting work easier and easier, separating out the idea of how you administer when you're just running the hardware resource pool, versus (when) you're the business and you want to set certain parameters about how you can access what information. We see a lot of demand for on-premise. We'll certainly meet the needs for people who want to host this stuff. We think that's a perfectly valid model. Salesforce.com in a sense has gone with a very expensive sales approach, along with hosting. Most people who do hosting say, OK, it's here and they go with fairly modest sales and marketing investment, and so they are kind of an unusual combination.

More Newsmakers

[theoscnet]

Everything is just SUPER in Redmond!

"We're super happy with the growth"

"I mean, we perform super, super, super well."

(Our) software can scale up to cover a super, super high percentage of all businesses in the world

"how they take the updates in and when they pass them along to their systems--we've done super well on that,"

Reminds me of the days of Super Nintendo
Everything was just Super!

I'm just suprised a "super-duper" didn't get stuck in there somewhere, too...

Sorry, I thought that article was quite funny, just pokin fun...

[Earl Benser]

Gates is mightily impressed.....

...... Let's hope that there is actually something to impress the rest
of us.

But, from the Redmond blogs, maybe not this time.....

[Stomfi]

CEO Speak

These comments by Gates are obviously for the intellectually challenged, who need clever sounding words in a childish language they can understand and pass on to fellow CEOs and users of a similar ilk.
Unfortunately today, this seems to be the majority of the population, although Gates has always believed his supporters come from the ranks of those who can only understand what he does.
Sadly for Microsoft's customers, his "vision" is limited. (He rewrites things when he is proven wrong, like how he had to invent the world wide web when that didn't eventuate as a fad.)
New technologies are happening thick and fast in the latter part of this decade no matter how hard MS tries to put on the breaks, a strategy that has worked well for them so far. But advances in computing hardware coupled with open source software that can't be marginalised by the Gates money pot, look like numbering the days for a stand alone networked desktop system even in the home.
A huge problem for the Windows solution is that it is not cross platform and its application software does not run as well on other operating systems. Gates is trying to solve this problem with a web based solution, but instead of using a standard development platform like say Java, their "must be invented or owned here" strategy, has forced them to use something that anecdotal evidence suggests is inferior and insecure.
But like the old IBM before them, business leaders and the masses seem to think that big is best, so he knows he has their ear until the switch to more modern technologies and strategies by the end of this decade, marginalises his business model instead.