Interview: Microsoft VP details new approach to business

Microsoft Corp. last month launched a Solution for Intranets and a Solution for Supplier Enablement, the first two in a planned series of integrated software, service and support packages aimed at helping companies address specific business problems.

Charles Stevens, corporate vice president of Microsoft's Enterprise and Partner Group, spoke last week with Computerworld about the new solutions-based approach, which he publicly unveiled at the company's Fusion 2001 partner conference in July.

Q: How do you see the life of an IT manager changing as a result of Microsoft's new solutions-based approach?

A: IT is not just about infrastructure and technology and products anymore. IT is about the fundamental business of the company. And IT managers are not just technology managers or infrastructure managers. They're also business people. And they need to drive a business requirement with everything they do, whether it's operating people's desktops or managing the infrastructure or deploying business solutions.

So for Microsoft to be successful in the enterprise, we obviously have to provide reliable technology and great products. But we (also) have to provide real business value ... We have to configure these products, integrate them, sell them, support and service them in a different way to address the customer need....

These solutions are on the cutting edge of changing Microsoft -- not taking it away from being a product technology company, because that's the basis of everything, but translating that product technology into something customers can use every day that drives business value. It's very simple.

Q: How much progress has Microsoft made in pitching the solutions to corporate customers?

A: I think we're still in the early stages, to be honest. In terms of the sales force, which I am responsible for, we've put what I would call the infrastructure in to be able to sell these solutions. We've actually changed a number of things -- the cap management model, the compensation model, a bunch of the sort of systems and processes so that we can sell not just products and licenses but these much more complex business solutions and IT solutions.

We've trained approximately 5,000 people in the field who are going to be responsible for either account managing or selling or providing tentacle support on these solutions.

We're also in the process of engaging partners very closely around these solutions, both large global systems integrators who are going to lead with these solutions, plus what we call certified partners, who are going to help deliver and customize the solutions for smaller- and medium-sized customers as well.

Q: Have you noticed any change in the way corporate customers react to Microsoft?

A: There are customers (who say), 'We're surprised when you come in and say, well, what's your key business problem or business challenge?' ... They're not used to Microsoft saying that. They're used to Microsoft coming in and saying, 'Wow, we've got this new technology to jazz your desktop or to improve the performance of your servers or whatever.' And they're still interested in that. ... But they're very interested when you ask, 'Hey what are the key business problems and challenges that maybe some of these solutions can help.' You can talk to businesspeople as well as IT people about that. You can talk about the business value of IT. I've been to 10 countries in the last six weeks, and I just see a dramatic change in the basic relationship we have with customers.

Q: Can you describe how a typical sale might work?

A: The (Microsoft) solutions specialist and the partner would try and understand obviously your business requirements. ... We'd configure [the solution] for you, produce a proposal bid for you basically of the whole system. The whole cost would be software, the integration, services, everything, end-to-end.

Then we'd say, 'The total cost of this thing is US$500,000 less what you already have licensed from Microsoft. It turns out from our configuration tool, we know you're already licensed for Windows and SQL Server and Office. So the total cost is $500,000, but you're already licensed for say $200,000, and that includes service and everything. So what you need in addition to what you already have is another $100,000 in licenses and another $200,000 in services,' just to make a simple example. `For $200,000 in services, you've chosen Avanade or this partner, so you pay that directly to them. The additional $100,000 you owe in licenses to Microsoft.'

Depending on what agreement you have, an Enterprise Agreement or Select, that can be added onto that existing agreement. So that would flow through whoever the reseller was that sold you that agreement. You don't have to sign a whole new agreement or renegotiate it. It's just an add-on to whatever agreement you already have. It's designed to be as straightforward as we can make it.

We want to tell the customer the total cost of the system, because then we can say, 'Hey it's going to cost you $500,000, but it's going to increase your bottom line by $2 million by driving this amount of revenue or this amount of cost savings.' We want them to look at it on the basis of the total cost, even if they've already paid some of the cost, because we're trying to establish what the business value is and what their return is on that investment.

Q: What types of solutions packages are due out in the next six months?

A: I know the ones we're developing, but the order they come out, it's hard to predict. We're doing a bunch around the IT area, particularly around security and management and data center infrastructure and development, new development methodologies.

We're also doing a set around employees, like business intelligence and productivity solutions based on Office and SharePoint (Portal Server). We're doing some more business-partner solutions, too. And then there are the (solutions that revolve around) connecting customers.

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