Doug Burgum, senior vice president of the Microsoft Business Solutions Business Group, and other executives at this week's Convergence 2005 user show unveiled a road map for development across the group's four product lines in an initiative known as "Project Green." The initiative includes extending the support time for the current applications and phasing in changes in two major waves using technologies such as Web services and role-based interfaces.
Sometime after 2008, Microsoft plans to offer a software suite that incorporates the best of each product line and allows companies to easily map out their own business processes. The following interview with Burgum is based on comments made to Computerworld and statements at public forums.
How is Microsoft doing in terms of business applications revenue?
We have an aspiration to have significant market share. Do we have a special goal out there? No. We don't have a profitability issue or problem. We would have one if we were trying to be profitable and weren't. If you are planning to invest money, as Microsoft has a plan to, in what you think is a big opportunity down the road, it's not a problem but an opportunity.
Anyone who characterizes profitability as something to be fixed doesn't understand Microsoft and the charter given to me. Each year, the amount of planned loss is less. In terms of revenue growth, obviously, you love to be growing faster than we are, but we're pleased with the revenue growth.
What are Microsoft's plans for hosted applications?
We have not announced plans for doing anything directly. Partners continue to host solutions, and we'll vigorously support those partners. Today, we still view that (segment) as a minority of the market.
Has there been any effect from PeopleSoft's takeover by Oracle on Microsoft and the market?
I think we are trying to be responsive. We know there were a number of PeopleSoft customers that were running (applications) on a Microsoft infrastructure. With some of the saber rattling during the extended ... takeover and trial, many customers became nervous.
If they're concerned about being forced over to Oracle, and we're appropriate (as an alternative), we'll find a home for you. We want to be a harbor for them if we've got a fit.
We're not going after the largest companies. Those guys (Oracle and SAP) can duke it out there. We're in a unique position. We're open for business for larger organizations and large enterprises. We're not trying to knock off a US$50 million installation of Oracle, SAP or PeopleSoft at the headquarters. But companies of a more distributed nature can use SAP's NetWeaver (middleware) to integrate us at a subsidiary or independent subsidiary.
This is one of the most highly fragmented markets anywhere. We define it as (being worth) $60 billion, and you'd have to have an enormously high growth rate to have high market share. We're bullish about the opportunities.
How does Project Green compare with previously announced plans by Microsoft?
Green is very much alive in terms of innovation. There will be two waves across the current product lines. It's different than what you heard a couple of years ago. The endpoint has not changed in terms of the vision of low cost and high adaptability. This is a better plan than what we had before -- we're allowing the customer to receive innovation at their own pace.
We extended the life cycle (of the current product line) from three to five years. If you go out and buy Great Plains 8.0 or 9.0, from the point it ships, you have five years of commitment.
Doesn't buying into Microsoft applications lock a user into the platform?
First, on a broad level, I believe that all the applications companies are trying to become platform companies, and platform companies are becoming applications companies. Today, we have an applications strategy that's focused on the Microsoft platform. Ever since the whole XML revolution, the Microsoft platform is very open ... more than that of some of the guys that give it (software) away. They confuse giving it away free for being open.
I don't hear customers complain that our applications take advantage of SQL Server or Office integration. We deliver value through deep integration, and we're open, so they can tie into legacy or other applications.