For Enterprise Software, Microsoft Wants You

Dennis Byron

Microsoft -- like most companies whose shares are publicly traded -- holds periodic meetings with "its investors." What this actually means is management speaking to investment analysts employed by companies such as UBS, Bank of America, and so forth that trade the company's shares and recommend investment strategies to pension funds and other large institutional investors. With the advent of the Internet, retail investors and anyone else whose lives might be affected can listen in to such meetings via the Web -- live or after the fact.


That's you! You should care both personally and professionally. Listening to what Microsoft has to say (or reading the transcripts) lets you filter out the subsequent bias of press articles about the meetings, the opinions of those investment analysts in attendance, and even of bloggers. Personally you should care because your retirement money is more than likely invested in Microsoft somewhere along the line. Professionally you should care because nine out of 10 of you use Microsoft products somewhere in your enterprise software mix. And about half of you (or your bosses) consider Microsoft one of the top two most strategically relevant information technology (IT) suppliers to your company.


There is some debate about the latter statistic. I am using numbers put out by The Research Board as quoted by Microsoft COO Kevin Turner. Other analysts say they have seen surveys that give a different view. These researchers say that although everyone uses Microsoft products and services, because those products and services are commodities, Microsoft is really only as strategically important as the company that delivers the water jugs to the company coolers. In my research, I find that the answer you give about Microsoft's strategic importance in the enterprise is so dependent on size of company and industry that it is almost not worth surveying for.


But the bottom line is that you cannot afford to omit Microsoft from your IT decision process.


That fact is going to be truer in the next 12 months than ever before. In its Fiscal 2010, which began July 1, 2009, Microsoft is out to convert you if you are not already a Microsoftie. If -- instead of a Microsoft product or service -- you use IBM Lotus Notes for collaboration, Oracle (ORCL) Siebel for CRM, Google (GOOG) Search for either advertising/publishing/lead-handling (or you actually use one of Google's products for enterprise search), EMC VMware for IT resource optimization, and so forth, expect a high-powered sales call. Already Microsoft says it has unplugged over 10,000,000 Notes users (there are 15,000,000 to go), grown its Live CRM business dramatically against competitors, gained .5 percent share in search in one month because of Bing (sounds small but tenths of a point are big news in cereal, toothpaste and apparently search share), gained on Linux in terms of number of instances if not revenue share (primarily because of a surprising dominance of netbooks), and made a dozen other important market share advances.


In fact, as outlined at its July 30 Financial Analyst Meeting, market share is the Microsoft mantra for the next 12 months. Microsoft might even prefer market share over revenue growth (which Microsoft thinks will decline for the whole industry during the relevant timeframe - a good but not sure bet).


For the rest of 2009 and in 2010, Microsoft is investing in you instead of new products or profits. Expect some good deals to come your way.


(For more detail on this subject from an IT investment research perspective, see companion blog posts on my site concerning Microsoft in ERP and Microsoft in competitive mode.)

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