Microsoft shifts to pitching 'Solutions'

Corporate users may start to notice that Microsoft Corp. isn't merely pitching individual products anymore.

The software giant last week launched Solution for Intranets, the second of its planned series of software, service and support packages intended to help companies solve specific business problems. The first, Solution for Supplier Enablement, announced last month, aims to help companies hook into online procurement systems and electronic marketplaces.

Microsoft officials said customers can expect to see three or four more of the "full-blown" solutions within six months. "We often realized Microsoft could do a better job of solving our customers' pain points by delivering technology in a more integrated way," said Valerie Olague, director of enterprise solutions, explaining the new approach.

Publicly unveiled in July at Microsoft's Fusion 2001 partner conference, the "solutions" approach required Microsoft to spend months training sales, service and support specialists and partner systems integrators on the fine points of configuring various products for specific business scenarios.

For example, the Microsoft Solution for Intranets includes architectural and deployment guidance plans to bring together SharePoint Portal Server, SharePoint Team Services, Office XP, SQL Server, Windows 2000 and Windows Media Technologies.

A Microsoft solutions specialist works with a customer to determine its needs. The customer then has the option of building the intranet itself with solutions-based documentation aids or enlisting the help of Microsoft consulting services or recommended outside systems integrators.

Early adopter H&R Block Financial Advisors Inc., a division of H&R Block Inc. in Kansas City, Mo., enlisted a Microsoft architect and two local Microsoft consultants to work with two of its IT staffers.

The firm also hired a local Microsoft partner to integrate Microsoft software with various packaged and homegrown applications, such as its customer management system, financial planning and portfolio management software, and Internet research tools.

H&R Block had been planning to take a best-of-breed approach, using products from a variety of vendors to develop its intranet into a portal linked to various applications and information sources. But after settling on Microsoft's SharePoint Portal Server for content management, the firm learned about the Solutions for Intranets early-adoptor program and decided to give it a try.

John Thompson, director of e-business at H&R Block Financial Advisors, said the solutions-based approach brought "a series of products that were all near or at the top of their respective genre in the industry" and gave his company knowledge "about the way the products fit together that I don't think we would have found if we bought the product, found the documentation and looked at the Web site."

Although the solutions-based approach has been lauded by some analysts and corporate users, it may not work for every company.

Gene Phifer, an analyst at Stamford, Conn.-based Gartner Inc., said that in the case of intranets, many vendors offer products to help build single front-end layers for portals, and the Microsoft Solution for Intranets may not be a good fit for enterprises running applications on a variety of operating systems. The SharePoint Portal Server "is not the most robust portal platform in a truly heterogeneous environment," he cautioned.

Until its more open .Net development platform is ready, Microsoft's solutions might make more sense for small to midsize companies, especially those that are relatively new to intranets and want to work in a cohesive Microsoft environment, Phifer said.

But Louis Columbus, an analyst at Boston-based AMR Research Inc. who tracks supplier issues, said he has been impressed with Microsoft's "new appreciation for just how heterogeneous the world is.

"They realize they have to have strong connectors into SAP [software] and into Oracle [databases]," Columbus said of the effort Microsoft has put into its new solutions approach.

Pricing Plan Presents One Total

Microsoft's new solutions may be collections of existing software products, coupled with services and support. But when it comes to pricing, the software maker intends to present a single figure to customers.

Charles Stevens, vice president of Microsoft's enterprise and partner group, said that to help customers evaluate their return on investment, solutions sales specialists will provide a price that factors in software configuration, services and support, as well as any of the customer's existing licensing agreements.

As a hypothetical example, Stevens said a solution might be priced at US$500,000, but the customer may already hold licenses for $200,000 worth of software, leaving the total cost at $300,000. The customer's reseller contract can then be amended for the additional software, he said.

The configuration tool that helps sales representatives come up with the solution price is being tested and should be rolled out early next year, Stevens said. The tool was jointly developed by Microsoft and Pivotal Corp. in North Vancouver, British Columbia.

Valerie Olague, director of enterprise solutions at Microsoft, said customers can continue to get product support through their existing premier support contracts, but they can tack on solutions support for an extra fee, which gives them a solution-level identification and access to a specialist in that particular area.

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