Curtain Closing on Gates Era at Microsoft: Ozzie sees IT role for 'Live' services; users are unsure

BOSTON -- Just days before he succeeded Bill Gates as Microsoft Corp.'s chief software architect, Ray Ozzie last week heralded a new era of "services disruption" that he claimed will transform the way enterprise IT infrastructures and business systems are designed, deployed, managed and used.

But the attempt by Ozzie, then Microsoft's chief technical officer, to spin a corporate IT angle for the company's Internet-based "Live" services strategy failed to strike a uniformly resonant chord. IT professionals at Microsoft's TechEd 2006 conference here were mixed on whether they think their companies will take advantage of the services in the next couple of years -- or if they ever will.

"I'm very skeptical," said Justin Smith, a Buffalo, N.Y.-based senior messaging and collaboration administrator at Sodexho Inc. Smith said the food and management services company's IT department is accustomed to delivering a certain level of technical support that he isn't sure an outside vendor could reliably match. "I believe in having assets internal rather than external, if it's a cost wash or similar," he added.

But Ozzie's name alone carried enough credibility for David Porter, a software engineer at Progressive Casualty Insurance Co. in Mayfield Village, Ohio, to at least give the services pitch consideration. Porter said he has been impressed with Ozzie since he gained fame as the father of Notes at Lotus Development Corp. Ozzie later founded Groove Networks Inc., which Microsoft acquired last year.

Blended Offering

Not surprisingly, Microsoft isn't suggesting that IT departments make a whole-hog switch from packaged software to online services. Ozzie said the company recognizes that the transformation will occur over a period of years. Microsoft is taking a "very pragmatic approach," blending desktop and server software with a set of its own enterprise service offerings, plus others provided by business partners, he noted. That will enable IT managers to "make the right trade-offs" for their companies, he said.

Ozzie and other Microsoft executives cited several examples of services that might appeal to corporate IT managers. An IT department could offload e-mail to Microsoft's Exchange Hosted Services. Windows Live Search, which is in beta testing, will allow end users to bring together in a single query information from their PCs, Microsoft's SharePoint collaboration software, enterprise applications and the Internet.

In addition, Ozzie noted that Microsoft plans to federate its Windows Live identity service with Active Directory to enable authenticated users to access a vast array of Internet-based services without having to create a separate identity for each one. His keynote speech made use of Microsoft's Windows Live Virtual Earth mapping technology to trace his employment roots in a display so detailed that attendees could see the colors of buildings where he used to work.

Joel Zinn, a Tulsa-based senior IT developer at American Electric Power Co., said the Virtual Earth technology could help the utility's service technicians as they respond to calls. But like other users, Zinn said he harbors doubts about services such as hosted Exchange, especially at a company as geographically dispersed as AEP, which is based in Columbus, Ohio, and has 5 million customers in 11 states.

"Utilities tend to be conservative, so [company executives] would have to be convinced that there's a good return on it," Zinn said.

Andy Gorman, a senior technologist at a major financial institution, said Microsoft's services vision had a "pie in the sky" feel to him. "It's good in concept," he said. "I just can't see it being implemented in the next 10 years, and I don't think many companies are ready for it. They wouldn't buy it culturally."

Many users also would be on pins and needles over concerns about information security and a lack of control over their data, he said.

But Gartner Inc. analyst Daryl Plummer said such concerns are perennial and have yet to stop any Web-based, service-oriented architecture or software-as-a-service efforts from going forward. Plummer, in fact, said he thinks Microsoft will have to move farther away from software infrastructures than it is now, and toward services.

Microsoft's own software licensing scheme is paving the way toward broader adoption of online services, said the chief technology architect at a major food-processing company. Many Microsoft users already pay a yearly software fee, noted the architect, who asked not to be identified. Shifting to a services model is the next step, he said.

But some TechEd attendees still had trouble getting their arms around the new approach that Ozzie laid out.

"I can't relate to what they're doing," said Tyrone Boyd, associate director of network services at Howard University in Washington. "It just doesn't register with me yet."

Copyright © 2006 IDG Communications, Inc.

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