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AberdeenGroup Volume 10 / Number 20
September 29, 1997
Microsoft: The Joker of Enterprise IS Computing
Microsoft is a great company. It has unified the desktop and accelerated
the delivery of the benefits of computing technology. The company's
financial success, employee policies, and corporate citizenship are models
for other organizations to emulate. And Microsoft-driven changes in both
the worlds of technology and business have helped spark the economic growth
and many of the new opportunities that abound in the world today.
But one area of the high-technology world that Microsoft's marketing
machine is turning into shambles and for which Microsoft has become an
increasingly destructive force is enterprise IS computing. In the spirit of
helping our clients plan their enterprise IS strategies, Aberdeen is
publishing this Executive Viewpoint to assist business unit and IS
executives better understand why they each may have such a dynamically
different view of Microsoft and help them establish a common middle ground.
Executive Summary
Microsoft wants its software - operating systems and applications - to be
the industry standard from the electronic wallet to the datacenter. Such
ambitious goals are an excellent way to further motivate Microsoft's
already motivated employees to do their best every day. But at this time,
Microsoft has over marketed its current capabilities to meet the needs of
enterprise-level computing.
Two major buyer groups want to believe Microsoft's enterprise marketing
machine. The first group consists of business executives that both want to
gain an advantage over their competitors in any way possible and have
learned computing technology with Microsoft-powered PCs and Macintosh
desktops. Business unit executives trust Microsoft. After all, Microsoft
more than any other technology supplier has allowed business unit
executives to leverage the capabilities of IS technology to meet
ever-expanding business objectives by bringing computing to the office
masses.
The second major customer group that is quickly embracing Microsoft's
enterprise story is experienced IS professionals who do not want to miss
out on the next mainstream application operating environment. This group,
many members of whom missed out on client-server, relational database, and
web-based applications, for a combination of personal and potential
business-benefit reasons wants to be on the bleeding-leading edge of
implementing Windows NT Server.
But at this time, Microsoft has not delivered the production-quality,
enterprise-level products that organizations can use when the charter is:
"Don't screw up the enterprise's information assets - the company's
financial health and peoples' jobs are at stake." What it has delivered are
versions of products that embody what it has learned to date and
demonstrate the directions it is going. Aberdeen firmly believes Microsoft
is headed in the right direction for delivering a trusted
enterprise-computing operating environment - it is just not there yet.
However, the Microsoft marketing engine -fueled with monies derived from
desktop products and flush with success - has prematurely moved ahead of
the company's product capabilities in the enterprise-computing area.
Microsoft marketing knows the "-ity" terms of enterprise-level computing
such as availability, reliability, security, scalability, manageability,
upgradability, flexibility, recoverability, inter-operability and
affordability. And no matter whether Microsoft's products have these
characteristics or not, the marketing machine is claiming enterprise-level
qualities.
Aberdeen's conclusion is that Microsoft's irresponsible marketing has the
real potential of becoming a destructive force in the IS industry.
Setting the Stage For Microsoft as a Supplier To Enterprise IS
Since 1992, Microsoft has publicly stated its intention to grow Windows NT
into the first and only operating environment capable of supporting
datacenter operations, departmental applications, workgroup activities, and
individual end users - including mobile users. In other words, Windows NT
would eventually be what was at the time considered to be the Holy Grail of
distributed, enterprise computing.
At this time, Microsoft has delivered NT Workstation for the corporate
desktop to support business-critical, online transaction processing
applications as the client operating environment and NT Server for
workgroup network operating system requirements. In addition, it has
delivered a highly integrated set of products called BackOffice for
delivering database (SQL Server), Internet (Internet Server), messaging
(Exchange Server), transaction (Transaction Server), and systems management
(Systems Management Server) services. The combination of NT Server and
BackOffice applications are intended to provide users with the ability to
run production-level applications at both the departmental and enterprise
levels.
Microsoft initially marketed (circa 1994 - ancient history in Microsoft
time) NT Server and BackOffice as the replacement for UNIX, OpenVMS, and
AS/400 - then backed off as the products proved too fragile for production
applications. But with the latest releases of Windows NT Server (version
4.0) and SQL Server (version 6.5) combined with the availability of
high-performance 4-way Pentium Pro servers and leading-edge
enterprise-level application software from firms such as SAP, BAAN,
PeopleSoft, IBM and Oracle, the Microsoft Marketing Department has decided
that it is again the right time to target enterprise-level decision makers.
And so Microsoft's current corporate marketing message, as highlighted at
its much criticized "Scalability Day" event in New York this spring (see
Aberdeen's Impact, Microsoft NT Scalability Day: The Emperor Has No
Clothes, May 1997), is that NT and BackOffice are ready to run the
multiuser, production application operations of even the largest
enterprise.
NT Product Capabilities versus NT Marketing Messages
Aberdeen research shows that NT is very capable of running workgroup and
departmental applications and supporting desktop PCs running the Windows
operating environment. We continue to note the growing percentage of
software licenses for NT reported by leading software suppliers. And user
interviews show that NT is being used for deploying numerous new functions
within enterprises that could not previously have been automated with
either Unix or MVS for a combination of cost and support resource
considerations.
Many early application deployments on NT, however, have run into well
documented problems due to availability, scalability, security, stability,
maintainability, and manageability.
Microsoft recognizes the availability issue and plans to correct the server
side of it with the release of Cluster Server (code named Wolf Pack) later
in 1997. Cluster Server will consist of software that allows users to
configure two identical production servers with common disk drives such
that if one fails the other will take over. (Note that if both servers are
running above 50% capacity there will be a major performance degradation
when one fails.) Neither Microsoft nor hardware suppliers are yet
projecting what increased availability users should expect in return for
the expense and overhead of Cluster Server.
Scalability, security, stability and maintainability problems above and
beyond what IS executives expect to encounter for an enterprise-level
operating environment continue to be reported by experienced production
users of NT 4.0. Microsoft plans to improve upon these aspects of NT in
version 5 which may be released as early as mid-1998.
And finally, Microsoft has entered into several technology sharing
agreements with other suppliers to jointly develop manageability products
for supporting NT servers. The resulting products have only been as good as
the effort put into the development collaboration and the underlying
technology base.
But as we enter the fourth quarter of 1997, NT 4.0 and the BackOffice
product suite still do not have the necessary attributes professional IS
managers need to run an enterprise-wide production application operating
environment. And no matter how loud and how often Microsoft claims its
products are ready and safe for running the enterprise, they do not now
meet the benchmarks of quality set over the last 15 years by others.
And that brings us to the central theme of this Viewpoint - Microsoft's
marketing messages have gotten ahead of it's product capabilities for
enterprise-level, production computing. This has created the following
predicament for IS professionals - how do you convince your business unit
executive peers that the functionality in Microsoft's products does not
match the enterprise-level capability claims of its marketing? And at the
same time, IS organizations need to continue to develop internal expertise
in the NT operating environment to support desktop, workgroup, and
departmental users - they should not reject it out-of-hand. How can IS
professionals implement the appropriate operating environments to support a
medium-to-large enterprise's numerous different applications with Microsoft
shouting that it's products can do everything - even though they cannot?
Only a Joker would put its customers in such a difficult position.
Microsoft Culture Versus Enterprise IS Requirements
The next obvious question is, "How will Microsoft approach enterprise IS
computing in the future?" Aberdeen believes that Microsoft's products will
mature appropriately over time - an objective the more IS-experienced
members of Microsoft's management team are earnestly working towards - but
that there may be several hard pot-hole bumps for professional IS users to
ride over during the process.
The fundamental cultural disconnect between Microsoft and enterprise IS
executives centers around the trade-offs between maintaining product
compatibility and introducing new, advanced - but disruptive and sometimes
unstable - technologies.
If one is only concerned about the desktop, it is possible - although
expensive and time consuming - to introduce new, more advanced
technologies, such as MS-Office 97 (could not transfer files to earlier
versions of MS-Office without employing a conversion process) and Windows
95 (upgrading PCs originally shipped with Windows 3.1 was generally an
unrealistic option), that are not transparently compatible with the
products they replaced. And even product failures on the desktop, for
issues like memory leaks, can be solved with the three-finger salute of
alt-ctrl-del while only affecting the individual user and maybe one
transaction.
When one must manage an information infrastructure that affects either tens
of users and or tens of thousands of users, one must be very careful to
select suppliers that can deliver (not just promise) compatibility between
generations of product releases. True, the latest gee-whiz technology
components might not be quickly implemented into the enterprise's
information infrastructure, but compatibility ensures that IS can reliably
provide the services that end-users can count on to manage and execute the
fundamental organizational processes required to operate the business.
Microsoft's culture that encourages introducing disruptive but innovative
change into its desktop products has carried forward - and will continue to
do so - into its enterprise computing products. And where an application
operating environment that breaks on the desktop can be restarted with a
mere reboot and a few curses from an individual user that cannot get
programs to work as documented or has lost several hours of time, a reboot
of a multiuser production application can be very expensive to the entire
enterprise in terms of disrupted business operations and hundreds or
thousands of simultaneously lost staff hours.
Aberdeen notes that there is also a wide difference between what Microsoft
considers to be the appropriate levels of support ("Find your fix on our
home page and download it, wait for a service release, call your local PC
specialist, or, if you paid $45,000 for Premier Support and somebody is
available, we can fly an expert on our products only to your site at
substantially above the industry average day rate") and what IS executives
require. IS executives, who are more and more making service level
agreements with their end users, want their suppliers to offer availability
contracts supplemented with 24x7 expertise on call. Providing
cost-effective enterprise-level support has neither been part of
Microsoft's corporate culture nor business model.
Finally, enterprise-level IS executives are charged with planning their
organization's acquisition and deployment of new technologies in an
orderly, coordinated manner. Yet the entire roll-out of the NT operating
environment, including the dependent application services and associated
object technologies, has been anything but smooth. Products have not
performed as either promised or documented and release schedules do not
seem to be treated seriously by Microsoft management. This again creates
yet another major cultural clash between IS executives and Microsoft.
To Whom and Why Microsoft's Marketing Messages Sometimes Work
Aberdeen's research shows two groups of decision makers with whom
Microsoft's enterprise computing messages are working.
The first is business unit executives who want to improve the current state
of their enterprise's IS assets or want to automate additional processes
within their business - especially customer service and non-US operations.
This group tends to make the technology component decision and then assign
responsibility for implementing it to either internal IS staff or
third-party professional IS service organizations.
Business unit executives have, over the last decade, learned to trust
Microsoft on the desktop and have been wowed by the company's success and
global influence. They generally do not evaluate and compare the technology
aspects and functionality of alternative component offerings. As a result,
they assume selecting Microsoft as their primary software supplier - from
the desktop up to wherever possible - is the safe decision. When Bill
Gates, through the business press, says NT is scalable enough to run the
largest enterprises, they do not even want to question his reassuring
headline statements.
The second group with whom Microsoft's messages are resonating positively
is experienced IS professionals that want to be among the first to achieve
the enterprise computing vision being presented by Microsoft's marketing.
The advantages of having one common, Microsoft-supplied operating
environment from executives' portables to the desktop to the workgroup
server to the departmental transaction machine to the datacenter are
numerous. IS professionals can see lower support and maintenance costs,
faster application implementation times, lower acquisition costs for both
hardware and software, easier recruitment and training of staff, and more
functionality that can be more quickly modified to meet changing business
circumstances being provided by the enterprise's information
infrastructure.
At this time, professional IS managers that have committed themselves to
the NT-in-the-enterprise path are sometimes failing, sometimes using
non-Microsoft products to shore-up the deficiencies of Microsoft's current
product offerings, or in the stage of rolling out production applications
and then assessing what the real capabilities of the system they just
implemented are.
Aberdeen applauds these leading-edge professionals whose efforts and
feedback are most critical to maturing the Microsoft operating environment
at the enterprise level. And we all hope they continue to provide the
industry with their hard-won assessment of the current state of Microsoft's
products. When they say it is production, enterprise-level ready, Aberdeen
will be the first to magnify their voice.
However, the majority of enterprise IS executives do not want to invest in
cash-rich Microsoft's development efforts. As a result, they are waiting
for Microsoft's enterprise-level marketing messages to be backed-up with
proven products and credible user testimonials - including successful
bet-your-business production implementations within Microsoft itself.
Microsoft: Creating Yet Another Wedge Between Business Unit and IS
Executives
The last thing the IS community needs is another over-hyped,
under-delivering technology. Aberdeen research continues to uncover
weakness after weakness in Microsoft's NT operating environment for running
production, enterprise-level applications compared to alternative operating
environments. Even consultants who have successfully implemented
departmental applications with Microsoft's products will privately discuss
how much more their clients paid in terms of implementation services and
how much more expensive on-going support costs will be compared to
alternative operating environments.
But Microsoft is asking users to buy into a very good vision by marketing
it as today's reality. When business unit executives responsible for
initiating constructive change see the benefits of the vision, they
rightfully want it as soon as possible. But IS executives charged with
providing the enterprise with the highest levels of service at the lowest
cost soon find that they will be forced to sub-optimize both if they must
implement enterprise-wide and enterprise-level applications with
Microsoft's current products.
And more frustrating, experienced IS professionals with good memories know
how long Microsoft can take to deliver promised products, how many promised
features fail to be delivered, how much lower the quality of the delivered
product is than what was promised, how proprietary Microsoft's products are
despite promises of openness, and how many incompatibilities have been
introduced from product generation to product generation.
In short, enterprise-level IS executives do not trust Microsoft and yet
they do not know how to convey their very serious concerns to their less
experienced peers, superiors, and subordinates. This is at the heart of the
new wedge Microsoft is driving between IS and business unit executives.
Observations and Recommendations
Should a supplier of technology components directly compete with its
customers? As Microsoft's senior management shows that it has much more
interest in competing with travel agents, auto dealers, retailers, banks,
broadcasters, newspapers, Internet service providers, and other enterprises
outside the realm of high-technology product creation, enterprise decision
makers need to decide if they want to have Microsoft as a key supplier if
they are in an industry that Microsoft might want to participate in some
day.
In addition, Microsoft's relationships with complementary software
suppliers has been characterized best as "Microsoft wins, you lose" over
the long term. No company can supply all of an enterprise's technology
components. At the enterprise-level, every organization needs numerous
systems and application software suppliers to fully meet its needs. Yet
whenever Microsoft sees another software firm's products, such as in the
relational database area, are being routinely purchased by enterprise
buyers, it tends to go into the product area itself or partner with the
firm on a short-term basis and then change the rules of the game when it
better understands the technology and business dynamics. At the enterprise
level, IS executives want their different software suppliers to be able to
work together over the long term to improve the interoperability and
compatibility of their product sets. But when Microsoft is one of the
suppliers, IS executives may discover at any time the Redmond, Washington
giant has decided to compete with a complementary software supplier - to
the detriment of IS' ability to optimally manage operations.
IS executives require 1-3 (or more) years to manage the enterprise-wide
implementation of revolutionary and non-compatible products. Yet Microsoft
has given the IS community no assurances that products critical to its
enterprise strategy, such as NT Server, SQL Server, Exchange Server, and
Cluster Server, will not undergo drastic changes in future versions as the
company makes the modifications necessary to get them right. Compatibility
is a major requirement at the enterprise level, and yet it is highly
possible that due to its culture and history Microsoft might think IS
executives are only joking when they say they must have it.
Aberdeen's conclusion is that Microsoft's marketing approach to entering
the enterprise-level product space has not been constructive for either IS
professionals or business unit executives. Decision makers should be very
cautious of Microsoft's claims going forward. In addition, they should
continue to insist that
Microsoft and its most ardent complementary hardware supporters use
themselves as showcase examples of both the benefits and drawbacks to using
the NT operating environment for production, enterprise-wide applications.
And finally, before making a final acquisition choice, decision makers of
all types should thoroughly evaluate Microsoft's BackOffice server
offerings in comparison to leading alternatives - and never make a
selection just because the Microsoft logo is on the box.
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