Enterprise applications Toolkit

Gates reassures businesses

Tags:
Timetable,
ERP,
Great Plains,
Delays

Ina Fried CNET News

Published: 29 Mar 2006 14:55 BST

...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 on 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.

At one point, Bill, you said Microsoft is focusing on consumer services now, but that there's actually more opportunity for business-oriented services. What shape might some of those services take? I mean, FrontBridge might be one example.
Gates: Well, for most companies, if you think of their IT budget, a lot of the money goes [on] personnel costs today, where you're managing systems server by server. A lot of the automation of making operations simpler can be done for on-premise or off-premise. And the main reason hosted will make sense is where you just want to get something up and running very quickly. If you don't think you can get the IT expertise within your business, then the off-premise [version] may be attractive. The things that people still have to feel very good about is that they still have control over how quickly things get done on their behalf, how their information is maintained. If there's not enough resources there that they get to choose what can and can't run, they still have that administrative control that they can do integration.

The industry is going through that evolution. Email and Web sites have been the easiest things to say, OK, I understand my administrative boundaries and my integration boundaries for email and Web sites. Of the stuff that's hosted today, those would be over 90 percent of it. Instead of buying a copy of SQL Server, I just want to open up and do a set of databases in the cloud. We'll get to that point where that's a very typical thing, particularly if you just want to try something out, you know, get it up and running quickly and then you might shift back later. The ideal for the industry is going to be if we have one architecture that [allows] you to shift things back and forth between on-premise and off-premise very easily, because it doesn't take much in terms of these various factors to make you want to switch in one direction or the other.

Are services like Windows Live and Office Live going to become more oriented towards midsize and larger businesses, or are those same types of approaches not as germane to larger organizations?
Gates: I do think there will be a tendency to have more on-premise with larger businesses than there are with smaller businesses. And consumers are sort of the extreme, but even there you'll still have servers in the house that are holding videos and music. Now, the administrative model of, if there's an error that comes up on that server, is it somebody in that house who has to look at that error message, or is there somebody they've got a relationship with who can look at it and diagnose it for them? That's kind of like hosted, when you're able to remote all the management of the thing. And in the history of software, people have been doing forms for that remote management stuff, you know, going back to before Microsoft even existed. Now, as we're making the software hostable, we're also saying even when you run it on-premise, if you give me permission and we have the right relationship, I can be examining the health of the thing and helping deal with certain types of issues that come up, even though it's your hardware, it's on-premise.

Some of that remote management technology is in Vista, right?
Gates: Remote assistance is [in] Windows XP, but it didn't work well through firewalls, and so now we've improved that and we think that will be a lot more mainstream than it is today. Most tech support calls today are still voice, you know, picking up the phone and describing what's on a screen to somebody at the end of the phone line. It should be that you're sharing that screen or you just describe the problem and that remote person takes over. So we're seeing that evolution of better software capability for letting the remote expertise be applied, no matter where the code is running.