IT'S GOING TO BE A WILD RIDE IN 2007. That's
how Jim Townsend, president of solution provider Information Strategies,
describes what VARs can expect this year with the roll-out of Microsoft
Windows® Vista™ and Microsoft® Office 2007. "This is
the biggest year for new product introductions in Microsoft's history,"
he says. "It's going to be a big year for Microsoft and also for
those of us in the channel."
Revenue opportunities will depend on the type of customers, the state
of their hardware, their level of technical savvy and how quickly they
want to adopt the new software. But Vista will be particularly attractive
because of its increased security features, such as BitLocker™ encryption,
user account control mode and the protected mode in Internet Explorer®
7, according to Jodi Honore, vice president of vendor management for software
at Ingram Micro. Vista will also provide many opportunities for VARs to
upsell and cross-sell both new hardware and new software.
A recent study by IDC commissioned by Microsoft reports that for every
dollar of Windows Vista sales, there will be $18 in additional revenue
for the partner. "I haven't seen this kind of partner revenue multiplier
effect since Windows 95," says Robert Doi, Microsoft's group partner
marketing manager for Vista.
Most solution providers expect to spend the first part of this year educating
customers, assessing their needs and planning a strategy for deploying
the products at client sites. Then, over the next 18 to 24 months, VARs
will sell lots of hardware and installation services as customers buy
new Vista-ready PCs and/or upgrade older PCs so they can run the new OS.
Hardware sales alone will be substantial. According to a study last fall
by VAR Softchoice, 74 percent of business PCs don't meet the memory requirement
for the premium version of Vista.
Long term, however, the biggest opportunities may lie in the workgroup
and collaboration capabilities of the new software. Many solution providers
see a burgeoning business in helping small and midsize companies leverage
all the new or improved capabilities of the software to dramatically improve
productivity and lower costs.
A Tactical Sale
Although customers are interested, VARs don't see an immediate stampede
to Vista. In fact, unlike previous OS upgrades, which were routine because
people were so dissatisfied with their current OS, Vista acceptance may
be more gradual, says Arlin Sorensen, CEO and president of Heartland Technology
Solutions, a solution provider and managed services provider. With Vista,
he says, "the hurdle is going to be that XP and Office 2003 are good
enough for most people."
That means Vista requires a more tactical sale. "We as Microsoft
partners have to really understand the products so we can educate the
client base on why they matter," he says. "It's going to require
more finesse and more targeted education, where we point out how certain
capabilities will benefit certain clients." And that can be different
from one client to the next. "It also means we need to be running
those products ourselves so we can demonstrate the value and share the
impact it has had on our own company."
Many VARs report higher customer interest in Office 2007 than in Vista.
In fact, Sorensen thinks that VARs can leverage interest in Office to
sell Vista, even though Vista isn't required to run it. "Partners
need to talk about the 'better together' story," Sorensen says. "When
you sell them together, that's when you give customers the most bang for
Office 2007 is more intuitive and easier to use, with a "ribbon"
bar that makes many features immediately accessible. One of the biggest
attractions is that Office 2007 also better supports and integrates with
other new products and with new versions of server products, which have
been somewhat overshadowed.
"This is like the perfect storm of new product releases," says
Townsend of Information Strategies. "You have the big fish in Vista
and Office, which affect lots of users. But they are pulling behind them
all these major revisions of server products," many now more tightly
integrated with Office. In fact, certain applications and features of
Office work only when used with the Office System servers.
Office Communications Server 2007, for example, will allow workers to
initiate a phone call from Office 2007 applications, such as Word, Outlook
or Office Communicator, by clicking on a colleague's name to determine
his or her availability. "The whole unified communications process
will start to take hold in 2007," Sorensen believes.
|Selling Vista-Ready Hardware
Nearly half of business PCs are unable to meet the minimum hardware
requirements for Vista, and 74 percent cannot meet the new operating
system's premium memory requirements, according to a study conducted
by solution provider Softchoice. The VAR surveyed 472 North American
organizations last summer and fall.
That spells a golden opportunity for VARs to sell lots of hardware
and consulting with project management services over the next two
years Many VARs already saw strong hardware sales in fall 2006 in
preparation for the move to Vista. BeckITSystems, for example, has
seen an increase in sales of high-end PCs, as well as memory, storage
and motherboards with Vista-ready CPUs.
In general, any computer older than two years will be unlikely
to support Vista, according to the Softchoice study.
VARs see a lot of opportunity in helping SMBs use these collaborative
tools to better their bottom line.
"Realtors can do things like using InfoPath and a tablet PC to get
signatures on documents while they are in the field," Sorenson says.
"Customers will pay for that. If they are able to sell a house in
a matter of hours instead of a matter of days, that makes a difference."
The tool that has VARs most excited is Microsoft Office SharePoint Server
2007, which enables document sharing and workflow collaboration. Although
SharePoint is far from new, in the new version Microsoft has more closely
integrated it with Office. The combination of the two provides comprehensive
content management, enter prise search and coordination of business processes.
"SharePoint is, in my opinion, the greatest piece of work done by
Microsoft in a long time, and it's particularly under-used by small and
medium businesses," Sorenson says.
Nathan Hiscock, practice leader for Microsoft technologies at INRANGE
Consulting, also sees a lot of opportunities. "Office 2007 takes
Office from a stand-alone productivity tool to an enterprise application,
with things like SharePoint and PerformancePoint. All of a sudden you
can share info, and you have all these great products that are highly
integrated with Office." Once customers move to Office 2007, there
is a great opportunity for cross-selling. "This allows us to walk
in and provide a business intelligence solution."
Such solutions will be particularly attractive to businesses that must
document business processes and workflows carefully, such as legal firms
or medical offices, Hiscock says.
SMBs in particular are starting to ask for integrated products like SharePoint
that will improve their productivity, says Keith Sheppard, technical director,
NT Concepts. "Every office is trying to find new ways to centralize
and share information," he says. "We actually did a lot of prototyping
using the beta release of SharePoint."
Townsend has had the same experience. "We had SMB customers who
contacted us six months ago and said they want to adopt SharePoint, but
wanted to wait for the new 2007 releases of Office and SharePoint,"
he says. The VAR had some projects deployed to customer sites within two
weeks after the 2007 products started shipping. Says Townsend, "That's
Getting Up to Speed
Whether customers want to upgrade to Vista and Office 2007 in two months
or two years, they need to understand the products' capabilities and potential
to improve their business operations.
"There's an interesting challenge in helping our clients sort out
what to do with this new Microsoft technology road map," Townsend
Indeed, there are five different editions of Vista (including one for
small business) and eight different suites of Office 2007 offering 14
desktop applications. So clients will look to VARs to help them decide
which packages to buy and how to deploy them, says Ed Becker, president,
Some of the server technologies, such as SharePoint® and InfoPath,®
have been available for years, but the average user doesn't know they
exist. VARs "have done a poor job of educating businesses about these
capabilities," says Sorensen. But Office 2007 and the new versions
of the server technologies give solution providers a golden opportunity
to show clients their combined power.
It's an opportunity to have strategic discussions with customers about
what the new software can do and how they can use it to improve their
businesses, says Darren Bibby, senior analyst of global software sales
channels at IDC. He calls it "the thin edge of the wedge." The
door is open for solution providers to come in and satisfy the curiosity
of businesses about all the new products.
Customers may also need someone to assess their current hardware and
software, and help them prepare for migrating their desktops to Windows
Vista. "The key for the partner is to make sure the customers understand
the business value of upgrading and feel comfortable making that move.
Assessing their hardware and software compatibility is an important step
in that evaluation." says Microsoft's Doi. "Once they reach
that level of comfort, there's a big opportunity not only to sell Windows
Vista, but to offer other products and services that complement it."
|Contact Ingram Micro
for Vista Assistance
Ingram Micro offers numerous resources and a large team to help
solution providers leverage the opportunities provided by Microsoft's
|The following Ingram Micro
staff members are available to assist Microsoft partners:
|Todd Juchem, Microsoft
market development manager
(800) 456-8000, ext. 66037
|Kelly Williams, Microsoft
market development specialist
(800) 456-8000, ext. 67361
|Michelle Hendricks, Microsoft
senior market development specialist
(800) 456-8000, ext. 67367
|Shannon Cerveny, Microsoft
OEM market development specialist
(800) 456-8000, ext. 67362
|Shari Fruchtel, Microsoft
market development specialist
(800) 456-8000, ext. 67348
|Pam Marino, Microsoft
open value licensing specialist
(800) 456-8000, ext. 76163
|Kelly Fink, Microsoft
market development specialist
(800) 456-8000, ext. 67353
|Tom Mann, Microsoft
solution center engineer
(800) 456-8000, ext. 6778s