Microsoft Refines Its Services Strategy

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2008 and beyond will be all about services for Microsoft -- or will it? It's an unspoken goal, but one that many assume is fueling strategic decisions being made by Steve Ballmer, Ray Ozzie and (for now) Bill Gates.


Forget open source for the moment, if you will; software-as-a-service must be joined or vanquished if Microsoft is to maintain its position at the head of the tech industry. An overview piece at internetnews.com describes the company's moves toward "software-plus-services," which is not the same thing as SaaS, but a strategy that Microsoft's wealth may all but demand.


In Redmond, resources are available for site purchases and construction, plus projected heavy growth in headcount (which is more welcome IT job news within a volatile larger economy).


Then, in the first quarter alone, Microsoft will put out not only the much-anticipated Vista SP1 -- expected to give the OS a major push among reluctant enterprise customers -- but also Windows Server 2008, Visual Studio 2008 and SQL Server 2008. The internetnews.com piece points out that the sales from SP1 will be exponentially positive, as many IT departments will upgrade server products at the same time that they deploy Vista, and set up the 2008 products as the services platform du jour.


From an investor standpoint, analysts like Research and Markets seem to see 2008 as perhaps a transition year, in which financials will continue to be strong, but not stellar, as the services strategy solidifies.


Relationships with and expectations for partners, for example, won't be adjusted without headaches. Today, for example, an overlap between paid MSN Premium services and free Live and XP or Vista services is being covered, and the difference often comes when the customer receives services from a Microsoft partner.