With the release of Server Foundation, Microsoft now has a server product offering for businesses of any shape or size. But the logic behind the development and marketing of these products isn’t always clear—does Microsoft simply make up arbitrary size divisions and create products accordingly? How much of it is based on the needs and concerns of real businesses and business owners, and what are the key drivers?
I recently interviewed Bill Hilf, Microsoft’s Director of Platform Strategy, to get some insight into these questions as well as his impressions of the direction of the Server Foundation platform, what’s going on at the grass roots in the business world, the potential importance of cloud computing, and why Microsoft is on the advertising warpath.
James Bannan: Server Foundation is shaping up to be a great product. There’s obviously a major need for it in the small business space and I’m interested in your views on how you see it moving forwards as a platform within the overall scope of the Server 2008 suite as well as a future platform for software plus services.
Bill Hilf: We look at Server Foundation in a framework built on a range of products for the Windows Server portfolio which attempt to address needs from the very small to the very large. I’ve been in the server business for quite a few years, and over that time we’ve learned that you really can’t take a one-size-fits-all approach, as it causes problems in many dimensions—technical, capability, flexibility, pricing and so on. So we’ve been working over the years to create more specific product offerings to fit the right size of customer, like Essential Business Server, Small Business Server, and Home Server.
We found that takes the structure of a pyramid, and to take the example of the Asia Pacific region, at the base of the pyramid are tens of millions of small businesses, and while the vast majority of them have computers, server penetration is typically around 2-3 percent. When we correlated the data with other theatres like the U.S., which has around 12 percent server penetration in the same business segment, we realized that there’s a lot we can do to help businesses use the same sort of technology which larger businesses have access to, but first we had to get two things right—the price and reduced complexity. It was also very important to offer this product only through our OEM partners so that there was a single, uncomplicated transaction point.
With regards to the future of the platform and the question of Software Plus Services, the “plus” is very important to us. I recently had lunch with our major platform OEMs and they are all asking the same question. The critical aspect of Software Plus Services is how to evolve technology and solutions at a certain pace so that different parts of the world can keep up. A good example is Indonesia—when you look at the broadband penetration there which is very slight, compared with South Korea which is massively interconnected, obviously cloud solutions are inappropriate because there’s simply no practical way to connect en masse. From a global perspective, Software Plus Services is a continuum rather than an end-point—particular industries in different countries will have specific needs which dictate that their infrastructure has to remain on-premises much longer than other industries elsewhere in the world. Examples are certain financial or security data which have to remain on-site for a variety of governance reasons. On the flip side, there are plenty of industries which can offer more consumer-based solutions in the cloud as they don’t have the same barriers to implementation.
In that context, Server Foundation offers a fundamental and simple set of services which the majority of small businesses never had access to before. As they grow and evolve over time, they will have a variety of choices to meet their expanded needs, and our ultimate goal is to be the platform of choice regardless of size. But, even then, one-size-fits-all does not apply. As businesses expand their needs will be different—some will want to host mail, some won’t; some will want shared cloud data, some won’t and so on. As we evolve our Software Plus Services strategy, Server Foundation along with all the other products in the server family will have a “plus services” component which is designed to give that choice and flexibility. Forcing a business down a particular technology path just because they’ve hit a certain size is ridiculous, and our strategy is to always provide options and flexibility.
James Bannan: What are some of the challenges which you personally have encountered when trying to pitch products to a segment as diverse as the small business market?
Bill Hilf: A great example comes off the back of SBS—Small Business Server. It’s been a great product for us, but at a slightly higher end of the small business market. We found that it’s been great for a variety of businesses, but when you start to dip below 15 users and into environments where the word “server” is a foreign one, we found that the value offered by SBS just didn’t reach down that far. Those “micro-businesses” were using PCs as servers even though they didn’t really know what a server was. In one business that we went to, we found a PC with some accounting software and a local printer, and users had to line up and wait to use this PC to print off their reports. While we may find that strange and primitive, they really had no concept of client/server architecture or accessing shared resources. For this class of user, offering a product like SBS is just inappropriate, and we really needed a product which was very simple but which offered a load of value.
The example I love to give is that of my brother who runs a small construction company in California. He takes loads of pictures of projects he’s built and then uses them to show to prospective clients. The ability to access and share those photos over the internet, between PCs or on his mobile phone was quite revolutionary for him—he used to carry around stacks of printed photos. While this solution may seem entry-level to most of us, it’s fundamentally business-changing for him. He uses Server Foundation now (he’s my brother, so he sort of has no choice!), but now he can take advantage of what for him is a radical concept but which is basically file sharing, and bring him further along the technology curve, giving him access to tools and solutions he never had before, including data protection. Those concepts are central to Server Foundation. We’ve already had some positive stories coming back to us after the initial round of sales.