March 10, 2005 5:24 PM PST

Microsoft hops into managed PC business

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Microsoft is making a foray into the managed-services business, starting with a deal to manage the PCs for consumer products company Energizer Holdings.

Under the terms of the pact, which has not been formally announced, Microsoft will take over responsibility for managing, updating and supporting the battery maker's roughly 6,000 computers. It will also host a variety of applications, including e-mail, portal and instant-messaging services. The deal is expected to be phased in over the next serveral months.

"One of the knocks against Microsoft has been that they don't understand their customers' business."
--Paul DeGroot, analyst

The Energizer pact is the first of several that Microsoft wants to run as part of a project the company hopes will help it better understand its customers' needs, a Microsoft executive told CNET

"We want to add a limited number of additional customers in order to really improve the diversity of our experiences, the depth of the knowledge we are going to gain, and then drive that back into products that will improve the experience of all of our customers," said Mike Adams, a general manager in Microsoft's IT unit.

The efforts will be revenue-generating, but Microsoft did not put a price tag on the Energizer deal or say how many people would be involved. An Energizer representative was not immediately available for comment. The deal with Energizer was reported Wednesday morning by online technology site TechTarget.

Microsoft's IT department will be charged with overseeing the efforts. Adams stressed that the effort was a "project" aimed at improving Microsoft's understanding of its customers and not a new business.

Microsoft has long touted the fact that it uses products internally before they are released to customers, a process called "dogfooding" that the company has said has been of great benefit. Adams said that this will take that effort a step further.

"The concept was really to take what we are doing in IT and make that available to some customers in a different, more direct way than we've been able to in the past."

Paul DeGroot, an analyst at market researcher Directions on Microsoft, said he is not sure whether Microsoft will learn that much from the effort.

"I'm not sure, quite frankly, how much insight you get into your customers when you run their IT department," he said. "There is going to be a tendency to have them work like you work."

At the same time, DeGroot said that Microsoft has long been criticized for not having the same kind of industry-specific understanding as companies like IBM that work more directly with customers. "One of the knocks against Microsoft has been that they don't understand their customers' business," he said.

While many technology companies, such as IBM and Hewlett-Packard, have substantial businesses offering such outsourced tech help, Microsoft has generally left such work to its partners. The company's own, comparatively small consulting business

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Maybe they'll finally get a grip on the reality of managing....
Maybe MS will finally understand the limited and kludged tools they provide are not as seamless and reliable as they think.
As they have to consider the patching process across different applications and the infernal testing that is required. As well as detecting and patching non-microsoft products.

Fred Dunn
Posted by fred dunn (793 comments )
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I broke this story a long while back
I've been blogging about this for a couple months already. Interesting, that the news media orgs are JUST now picking this up. I saw the news in the media on first yesterday.
Posted by rodtrent (20 comments )
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Want a cookie?
Posted by Bill Dautrive (1179 comments )
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