This past week I had a chance to spend some time with Microsoft executives, customers, partners, and industry “influencers” at Microsoft Convergence 2012 in Houston, TX.

Perhaps one of the largest announcements at the event was Microsoft’s pending support of multiple platforms and multiple browsers of its Dynamics business applications, a change in its strategy that has long sought to bundle platform, infrastructure, and software components together, exclusive of other alternatives. Microsoft Dynamics CRM just became, or will shortly be iOS, Android, Blackberry, Chrome, Safari, and Firefox friendly. Couple that with some pretty compelling demonstrations of new mobile and Windows 8 applications, and it seemed like a refreshing change for the computing pioneer that many believe has lost its swagger and innovative edge.

However, the consistent customer response to these announcements at the conference was positive, and underscored the point that Microsoft customers are clearly moving in step with popular enthusiasm around device, OS, and browser agnosticism. In a telling sign that things are definitely changing in Redmond, I even saw one Microsoft leader intermittently working between his iPad and Windows 8 laptop (nope – not telling who).

In the big picture, this announcement (amongst others) could simply be taken as nothing more than some logical feature enhancements to compete in the current landscape. However, I tend to weight it a little more significantly. I believe this announcement is worth a little more consideration from Microsoft decision makers, customers, prospects, and competitors. Bear with me for a few minutes further as we explore this together.

TWO KEY QUESTIONS COME TO MIND:

Was this a defensive or an offensive move?

Was this a hint of a deeper participation in a networked world, or simply a change that had to be made to survive in the short term?

DEFENSIVE: Is this a forced surrender to a market that has clearly moved on from the Microsoft centric PC era (where Windows and Office were the only viable corporate candidate in town), and is rapidly embracing the new leaders of the post PC era: Google (Android, Docs, Gmail), Apple (iOS and the best devices on the planet), and rapidly emerging cloud computing platforms (a la Salesforce, Workday, Evernote, Dropbox)?

OFFENSIVE: Or is this the first of several strategic steps that recognizes that the customer is in control, and that the fast changing complexities and variables of today’s business landscape require technology interoperability amongst hundreds of platforms, databases, applications, and devices? Does Microsoft recognize that it’s strategy (and all companies for that matter) must evolve from protecting and extracting value from a fixed set of assets to participating in a broader set of fast changing assets and information flows?

The answer to these questions may very well align with the answer to whether Microsoft will move back into the ranks of innovative technology leader or die a long and slow death milking their cash cows in shrinking markets.

What Customers Want

In my experience, there are a rough grouping of two sets of corporate IT customers.

The first wants wants flexibility to “work the way they want to”.

The second can’t be bothered with architecting solutions. They just want it to work, and are happy to defer to the experts on defining a solution, as long as the price makes sense.

The sweet spot for Microsoft historically has been the latter scenario. Windows Server, SQL, Windows, Dynamics, Office. It all just works (except for when it doesn’t – perhaps you’ve seen a MS error or two in your day?). The latter scenario traditionally has lent itself very well to the small to mid sized markets who have limited resources. Ironically, this has also been Salesforce’s strength, especially in the CRM market. By many accounts, Salesforce.com has beat MS at their own game here, simplifying things even more.

The first category of customers have more often been larger organizations. However, this is changing. Customers that fit into the first category are not just enterprise customers anymore. Across business sizes, the craving for easy to deploy, on-demand tools that can perform increasingly complex tasks with absolute ease across devices and platforms is driving more and more corporate spending.

What was unthinkable a decade ago for many organizations due to cost and resource constraints, is now becoming commonplace. In fact, a recent Gartner analyst predicted that by 2017, CMOs would ACTUALLY SPEND MORE ON IT THAN CIOs. Line of Business leaders are now finding that they have direct access and capability to deploying applications and technology that help their respective teams perform better, without having to worry about heavy investment in infrastructure or even involve their own IT resources.

While painted above as two simple scenarios, the reality for most organizations is not quite that straightforward. Regardless of size, this is not as simple as being fully dedicated to On Premise or Cloud. It’s not as simple as being fully dedicated to SAP, or Oracle, or Microsoft. IT departments don’t just issue corporate blackberries anymore, and make their employees use them exclusively. Most companies have a slew of technologies that is increasingly convoluted, with a larger mix of applications, devices, services, and standards than ever before.

Most business process(es) and supporting technology are increasingly differentiated from one another. These situations are also changing quickly due to market pressures and advances in technology. It’s frightening how quickly Blackberries gave way to iPhones and Android phones, and how quickly Windows based laptops are givinh way to iPad and MacBooks in the corporate world. Similar replacements are taking place up and down the the IT landscape in increasingly shorter cycles.

And here is where Microsoft’s move towards interoperability can and should be key. The fact that they do have an evolving and maturing cloud computing presence (Azure), and a decade or so history with On Premise business applications, are *still* the default for corporate operating systems, email, and productivity suites, and have in place a relatively large and savvy partner channel, allows them to potentially compete across the entire spectrum of two key marketplace matrixes:

  • SMB to Enterprise
  • Cloud to On Premise

The Opportunities Ahead

The ability to compete across each of those spectrums is something that Microsoft may be as well positioned for as anybody. The pure cloud players don’t have much capability in On Premise deployments, nor many of the other capabilities that Microsoft has. Bundling their product offerings across their entire suite, AND simultaneously decoupling them to be available across multiple infrastructure and data platforms, with users accessing from a wide and varied slew of devices both offer compelling opportunities for Microsoft (and similarly for the incumbent enterprise software giants SAP and Oracle).

The key challenges and opportunities for Microsoft seem to be:

(1) Better orchestrate their relatively deep set of assets and core competencies across the entire IT landscape (Server, Database, Application, Device) both On Premise, in the cloud, and in various flavors of Hybrid deployment.

(2) Opening up more interoperability to the entire landscape has the potential to create many more opportunities for customers that have traditionally chosen to not operate on the “Microsoft stack”, and carve out new niches in increasingly hybrid corporate technology environments.

It will be interesting to watch things play out, and I have a sense that more people will be watching than ever before.

DISCLAIMER: Travel and lodging expenses were paid for by Microsoft and arranged for by their public relations firm, Waggener Edstrom

  • http://twitter.com/wimrampen/status/183605633940074496 Wim Rampen

    Divergence at Convergence? Is it a Resurgence? http://t.co/aIDKAr9I #conv12 #msdyncrm #msdynerp #ensw #crm #erp

  • http://twitter.com/mikeboysen/status/183619803628568576 Mike Boysen

    Divergence at Convergence? Is it a Resurgence? http://t.co/aIDKAr9I #conv12 #msdyncrm #msdynerp #ensw #crm #erp

  • http://twitter.com/insideview/status/183621023898406912 InsideView

    Divergence at Convergence? Is it a Resurgence? http://t.co/aIDKAr9I #conv12 #msdyncrm #msdynerp #ensw #crm #erp

  • http://twitter.com/jesus_hoyos/status/183767368466579456 Jesus Hoyos

    Divergence at Convergence? Is it a Resurgence? http://t.co/aIDKAr9I #conv12 #msdyncrm #msdynerp #ensw #crm #erp

  • http://twitter.com/jesus_hoyos/status/183925576892030978 Jesus Hoyos

    RT @BrianVellmure: Divergence at Convergence? Is it a Resurgence? http://t.co/BSVc8IVH #conv12 #msdyncrm #msdynerp #ensw #crm #erp