[Image] 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. [Image] AberdeenGroup, Inc. 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