Management Toolkit

Microsoft: Commoditising managed services

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Managed Services

Martin LaMonica CNET News.com

Published: 12 Jul 2005 12:25 BST

When it comes to Microsoft's strategy for the managed services business, the game plan has a familiar ring: high volume and low cost.

Chief executive Steve Ballmer offered a few details on the company's long-term plans for expanding its consulting services at Microsoft's worldwide partner conference on Sunday in Minneapolis.

Rather than pursue the highly customised, consultant-heavy approach seen at IBM Global Services, Microsoft will mimic the commodity PC model, he said, as it pursues managed services — those services that help companies run systems already in place.

"The world will be moved to not just managed services, but managed services that are somehow designed, if I could say it this way, more like a product or a standard offer and less like a set of customised outsourcing services," Ballmer said in response to a question during the conference.

Microsoft already has a managed-services project under way with Energiser to run the company's desktop PCs. In that deal, Redmond's first significant move in this area, it also offers a number of hosted applications, such as email and instant messaging.

Through that trial engagement and a few others, Microsoft intends to develop more service offerings, Ballmer said.

"I told our team we're not learning fast enough what it will take for us to engineer the technology that lets managed services evolve from a world of infinite customisation to a world of much more standardisation," Ballmer said.

The question of the software giant's intentions in services is of keen interest to Microsoft's partners, such as systems integrators and value-added resellers, which offer consulting in conjunction with Microsoft software.

In Microsoft's push into business applications, the company is already accused of competing against its packaged application partners.

In his speech, Ballmer said that partners will need to "evolve" their products and services over time as Microsoft enters new markets, such as services and applications.

He noted that Microsoft is still in the process of devising its managed services, such as desktop support, and that the role of third-party consultants is not yet totally clear.