Steve Ballmer is looking to make friends.
At a three-day conference, which kicks off on Friday in Minneapolis, Microsoft's CEO will try to summon his best sales pitch to more than 6,000 application providers, hardware resellers, distributors, systems integrators and software developers of all types.
His message? Those so-called partners should bet on his company's software in order to generate new business and profits.
Partners are a critical component in Ballmer's strategy to expand the company's reach into new areas. Microsoft competitors, such as IBM and Sun, are also investing heavily in partner relationships. Ballmer will also need to convince partners that Microsoft is a safer bet than a growing list of open source software options.
The CEO discussed Microsoft's strategy in an email interview with CNET News.com on the eve of the conference.
Q: At the partner conference this weekend, Microsoft is demonstrating some new forms abilities that will come in Office 12 and is discussing Longhorn. How important are those two releases for Microsoft, and can you give an update on where things stand with development of those two products?
A: Office 12 and Longhorn form the foundation for what is potentially the biggest wave of innovation for us since the Windows 95 time frame. We are on track to deliver both in the second half of next year. There will be tremendous new opportunities for partners from the innovations we're working on in Office 12, like the new file formats, new forms capabilities and other new technologies still under wraps. We estimate there will be a $140bn (£78.9bn) annual partner services opportunity on the Office 12 platform. When you couple that with the additional capabilities and opportunities for partners with Longhorn, you can see why we're excited.
At various times you and other Microsoft executives have talked about the possibility that in the future more software might be sold as a service. Additionally, there is the possibility for more software to be offered in a hosted manner as opposed to on-premise. Will that change the traditional role for partners as a channel for Microsoft?
Customers want flexibility in the way their software is delivered, especially due to the differences in priorities for IT by industry. Some customers care most about high uptime; some care more about easy manageability. Companies want to focus on their core competencies, and they want to reduce the complexity of running IT. The role for partners will certainly change over time as different technologies come and go and customers request new options — that's always been the case. One thing that won't change, however, is our dedication to working with partners to deliver value to customers.
Talkback
Betting on a single horse won't last you a life time. Something stockholders and customers should keep in mind when "their company" decides to go 100% head first into today's version of Microsoft's Partner Program.
Quote: "The one commonality, though — and this is the crux of the matter — is that the partners who specialise are the ones who will thrive."
Yeah, and overspecialise too much (how could you not once locked into that direction?) and you'll be dependant (which will not exactly help during negotiations) like never before. And being too dependant on something has a way on how you see the truth.
Also, Darwin figured out long ago what happens to overspecialized creatures once their environment (new strategic business tactics from Redmond HQ for example) changes too fast or too much.
In short, keep your options open. Always, with whoever you do business. Short term expectations of tremendous revenue and fortune are usually exactly that. Short term, short lived. Also be specially carefull not to get into a program that will slowly but surely claim all your resources and make you completely dependant that way.
Everyone knows how Microsoft treats their partners. Just look at Sendo. Microsoft will work with you, pat you on the head, tell you what a good job you're doing offer to look through all your code and technical specifications for you, then steal the lot and reproduce exactly the same thing themselves 2 weeks before you announce it. You'll then take them to court and get involved in a massively drawn-out court case that eventually bankrupts you, your company, your family and your friends. If you're very lucky, you may get out of them half of what you lost. But you'd have to be very very lucky.
Just say "no".