I’ve been in this business for roughly 15 years. Throughout that time I have been a Microsoft Partner (various levels), Microsoft Most Valuable Professional, Microsoft Certified Systems Engineer (various levels and specialties) and overall based a large chunk of my business on the Microsoft platform. I have many friends around the world that work at Microsoft and I’m also a shareholder. In short, I’m familiar with their business model.

Some of you seem to be new to this so I’m going to help you out.

Over a decade ago Microsoft was an arrogant company that was prosecuted around the world for the criminal abuse of their monopoly. Thankfully they had enough attorneys and money to wiggle out of many steep penalties and restrictions but in a nutshell Microsoft thought it was well within their right not just to demand their software be installed on the new PCs, but that no competing software be installed. It undercut it’s competitors on the commercial side, gave software away for free to squeeze others out and launched many misleading and false campaigns (Google FUD) in order to discourage people stuck in their monopoly from even considering everyone elses software. Thanks to the global prosecution at the time, Microsoft couldn’t do the ultimate Hailstorm hat trick: force the Internet into Microsoft’s proprietary formats, protocols and authentication standards. So the Hailstorm died and Microsoft is a better company as a result of it, right?

Well. Sort of. Sort of the exact opposite. The exact same people are still managing the company.

Microsoft, for as long as I’ve been following them, takes on it’s competition in the most infantile way as possible.  They don’t do this out of lack of respect or maturity, they still own nearly 90% of the market and majority of the browsers, game consoles, office software (the list goes on). They view every bit of innovation as a threat to their immense monopoly on business computing and rightfully so.

Now, if this is the way they have behaved for years, do you think they have learned something valuable over their insistence of eliminating any potential third parties from their ecosystem? Or do you think they act like a little kid that got beaten on the playground and is trying to come back years later seeking revenge?

Microsoft 4.0: We’re all in… and there is no room for you.

When Microsoft launched BPOS, many of the partners took great offense to being nearly completely cut out of the pie. You can play in the Microsoft cloud, but you only get 6%.

Then Microsoft cut the cost of those services. Woops, so much for making money with Microsoft’s cloud.

But it get’s better – some of you were delusional enough to go on with the illusion that you may one day be able to bill the customers.

Folks… this is why you need to go to Microsoft Worldwide Partner Conference (or at least watch it on the web) if you want to hear the direction of the Microsoft business straight from the horses mouth. In this case, Steve Ballmer characterized the importance of Microsoft Partners concerns about the cloud as eloquently as he usually does “And I’m sure I will be hearing from you this week about the comissions, billing, account control, blah blah blah”

Dig to find the least effective liar

I am not necessarily the CEO of a company because I am the most skilled manager or the most skilled developer or the most amazing leader.

I am the CEO because I can speak for 2 hours and say absolutely nothing.

It pisses my staff to no end. They get called on every mistake or statement they make. I speak for 2 hours, promise stuff (that I later find out doesn’t exist) and have people apologize to me when they can’t find it. It’s a superpower, OK?

You get your feet put into the fire enough times and you learn how to avoid it.

CEO’s, COO’s, CFO’s and other CxO officials are phenomenal liars. At some point in the past they were honest – and man, people HATE getting bad news. So to find out what is really going on, you need to dig deep. Find that binary sales idiot that is just repeating whatever they are fed by the upper management and there you finally get some clarity about what is truly going on.

Wired has had spectacular coverage of recent Microsoft missteps.. First about how Microsoft is blatantly violating it’s own licensing agreements to help former managers that ultimately sell the businesses back to Microsoft – if you look back at the history of Microsoft, they took a lot of flack for giving away Internet Explorer for free. So a former executive branches out, violates Microsoft licensing to gain VDS popularity on the iPad until Microsoft get’s to publish it’s own Office for the iPad. That’s not anticompetitive, that’s downright genius.

Wired followed up the post with more angry partners (please read the whole blog post here):

I was recently at a conference for technology solution providers, put on by an industry association. There I was sitting at a roundtable near the front. To my left and right were executives of managed service providers (MSPs), internet service providers (ISPs) and others, but the real action was directly across the table, frothing at the mouth. It wasn’t a rabid dog, it wasn’t a sports fanatic describing a huge loss — it was a Microsoft sales rep.

After listening to the backlash from the executives, the rep finally reached his boiling point, when the question was asked, “When are we going to be able to start billing our clients directly for Office 365?” His eyes glared back at us, his face turned red in anger, and with a firm voice, he blurted, “never, it will never happen.” Emphasis on the never was hard to mistake.

Any questions about where partners exist in the Microsoft cloud?

We have a saying in Texas.. Fool me once.. shame on me.. Fool me 8 million times..

{ Note to self… Vlad, come back to this part of the blog post and find better wording for “complete morons”.. something like “cloud specialized Microsoft partners”. }

Still, shame on you.

But we can make money in integration…

Shame on you.

But we don’t really like to bill anyhow, or the liability, or the support..

Right, because your clients are going to love you so much as their advisor when the stuff blows up as it does nearly every quarter? Shame on you.

But the money is not really in the licensing, it’s in the support..

Shame on you.

I really don’t know any more insulting words that I can share with you than those that Microsoft is apparently shamelessly issuing from Ballmer all the way to regional sales guys.

The shame really is on you – because Microsoft should not be blamed for any of this, not one bit. They are just trying to provide the best product at the best possible price and they are quite clear that they do not want you in it.

Any illusions you may have towards any future you have in the Microsoft cloud is your own fault, not that of Microsoft. Microsoft is responsible to it’s shareholders, not to you. And whatever amazing value you think you bring to the equation – well, it’s just facilitating your death faster. Because whereever you think you have an opportunity in the Microsoft ecosystem, you are dealing with a Microsoft client that they want to control – like Apple does – from the way they do business, sell you a mouse, phone, songs – everything your clients digital paws touch.

That’s it. End of story.

For my American fans.. Much of our disenfranchised population believes that we are slowly sliding down as a society and an industrial power because we don’t make anything anymore. We just outsource and import. This is the same thing. If you are making a solution, the most recognizable part of that solution better be you. Everything else should come secondary.

Or you can just pick better partners.

I work with Microsoft. I do so because they have the best software. But when I sell my products and solutions, Microsoft isn’t even in the top 10 reasons why they ought to buy my stuff. If you cannot differentiate yourself enough it’s a good indication that you will eventually be displaced by your partners. So pick your friends better and plan your business to be something more than an easily replicated service.

So many of you have emailed me to ask about my impression of what was said and done at Microsoft WPC that I have to make this brief post about it. If you ever have a question, feel free to email me at vlad@vladville.com

First of all, the attendance. I wasn’t there so I can’t speak to the count of people that Microsoft says was on hand. My staff (we sponsored Microsoft WPC and were there as huge Microsoft fans) was there at a booth and mentioned to me that we had a lot of foreign audience – so I see no reason to doubt the numbers and I don’t think that really matters as far as the big picture is concerned. I know many of you feel like WPC is a waste of time for a small business and that there is no ROI to it. And you’re wrong. And perhaps Microsoft would put in more SMB tracks if there was more SMB interest in working with Microsoft. It’s a causality loop – and I’m not playing the devils advocate here just pointing out the common business sense – you have to spend your money with Microsoft to make them care about you, not the other way around.

Second, Office 365. No big surprises there. But suffice to say if you’re not doing this, your clients are being marketed to and you’ll soon be pushed out of those accounts if you don’t have an offering.

Third, Apple. Every year Microsoft shows it’s remarkably low level of class when it addresses whoever is pissing them off at the time – be it IBM, Oracle, VMWare, etc – and they seem blissfully ignorant of the fact that the audience is not their staff and is not brainwashed to believe that Microsoft is the only technology capable of making money on the planet. Same mentality exists at Apple but at this point Microsoft is doing more than just shamelessly copying Apple products poorly – they are going after their business model too.

I tweeted recently that when you see the flamboyant loudmouth (CEO, Ballmer) of the company say the exact same thing as the guy running the company (COO, Turner) there should be no doubt where the company is heading.

It is what it is.

Microsoft doesn’t need partners in a sense where partners are a part of the solution. It needs partners in a sense of partners being a part of completing the transaction.

This is a major change since the days of technical complexity requiring a geek – the world is changing to the one that is decidedly geek free. It’s not there yet but it will get there eventually.

The decision for IT Solution Providers seems quite clear: Are you providing a solution or are you making a sale? If it’s the later there needs to be a clear and major distance between you and the Microsoft brand.

Microsoft Worldwide Partner Conference is the defacto number one ticket in the business software world – has been for nearly a decade. If there is a high profile meeting you need to have or want to get your message across, WPC has been the place to do it. Year after year it breaks the attendance records and serves as a launching platform for Microsoft’s strategy for the year and for years to come.

This year marks the first time that many of the partners I work with will not be making the trip. Not just IT Solution Providers but (sponsors) technology companies as well. There are the typical excuses:

1. I have too much on my plate right now
2. We don’t see a reason to go
3. I don’t like where it’s at (Los Angeles)

This year there is a new predominant message I keep on hearing: “I just don’t see the point.. Too much $$$ for too little value.. No ROI for the small partners..”

If partners that Microsoft depends on to deploy their solutions see no value in attending Microsoft’s conference, then can Microsoft really be blamed for building business models that not only exclude but force the exclusion of Microsoft partners from the Microsoft solution chain?

Granted, most of my discussions are with the infrastructure partners who do not do enough business with Microsoft to be a part of the strategic discussion – but they all do depend on benefits they receive from Microsoft in terms of promotional marketing collateral, (nearly) free software to run their computers and networks with and licensing help.

This can be a dangerous path separation for the two parties. Microsoft, from their cloud business development standpoint, typically sees infrastructure partners as deployment assistance / setup laborers kind of like your cable TV installer. Meanwhile, infrastructure partners tend to be the gatekeeper (think “internal IT”) for small businesses that run Microsoft networks, they aren’t exactly the cable guy. So between Microsoft deciding they will handle the sales and billing and partners deciding that there is no value in working closely with Microsoft, what happens to the Microsoft software during the next refresh/upgrade decision making cycle?

Many (myself included) have criticized Microsoft for spending too much of it’s focus on crushing competition themselves, instead of counting on the partners. Let’s see if that message changes this year – because Microsoft has found out on Windows Phone and BPOS that without partners it’s not really able to get to the business customers on it’s own great marketing.

Time will tell.. but we’ll be at the Microsoft WPC as both attendees, sponsors and Looks Cloudy as press. I hope we can offer some insight of what it’s like to be there from all 3 angles.

One of the biggest signs of success and opulence is losing respect for money. If you have trust-fund-baby friends out there that have never had to work for a dollar (or euro or pound to be fair to my readers), you know what I mean.

But when corporations do it it’s like a thousand times worse.

First, shareholders must cringe when they read about what their profits will be going to. Employees aren’t far behind – as they are both the shareholders at times and probably feel they ought to get a better bonus structure if the company is doing so well. Stock markets follow this stupidity and don’t reward companies that make foolish decisions (buying of Skype, partnerships with Nokia) so even Microsoft is seemingly going away from rewarding it’s employees with stocks and using cash (“cash” sounds better than “salary”) instead.

Bad Idea Faceoff

First of all, relax. This rant is meant to be a joke, even though it draws on the facts.

Apple wants to build a 12,000 employee building that looks like a spaceship without an inch of flat glass vs. Microsoft branded tablet.

This is the kind of stuff you expect to hear come out of Donald Trump’s mouth, or maybe on an episode of MTV Cribs. But when two of the biggest software companies on earth get together to collectively put spinners on their stock value you’ve got to wonder if Shaq is now a corporate strategy consultant.

Now I don’t want to get on a rant, but come on Microsoft – haven’t you proven that putting Microsoft on a label doesn’t instill any confidence? Remember how hard Apple worked to destroy Microsoft and Vista trademarks? The constant taunting, jokes and ugly realities that people have not forgotten. Why in the world would you want to piss off all your partners that currently make devices using your OS? I know, I know.. because Google did it and they failed and Apple did it and they rock. Except Apple is a consumer electronics company and you are not. You’ll have the same level of success Google has had with their Nexus devices – nobody wants a “proof of concept” device. That is called “OS emulator” and you already make enough of those. Do your employees and shareholders really need to watch you launch another pot without a bottom like your Windows Phone that keeps on eroding in every metric available? Why can’t you just be happy that you get $10 (approximately) off every Android device HTC makes due to your patents and just retire to Florida like all the other retirees?

And Apple. Do you really want to put all of your employees in a glass prison? Don’t you have enough egg on your face from your Foxconn drama featuring suicides and explosions? Does Curpentino really need another Steve Jobs Penitentiary and correctional facility? And making a building out of glass? Go ahead and tell the world that the reception on the iPhone will suck so bad for the next 6 years that you had to build your headquarters in a way that everyone was working next to a window so they can get some cell bars. Seriously? What are you thinking? People can see through the glass and find out what you’re working – what about the corporate tradition of murdering people (ahem, suicides) secrecy?

Just take The Simpsons advice and build it under the sea.

Now back to being unfunny..

Respect Cash

There is nothing wrong with cash. It’s beautiful. The poorer the culture, the more beautiful their money is – it’s like a work of art.

Yet when companies grow their management seemingly gets bored and instead of perfecting their products and listening to their customers they decide to pitch a spaceshuttle styled glass building in California.

To everyone outside of your ears it only seems like you’re taking your eyes off the ball. To your customers, it sounds like you’re not really focusing on their problems. To your shareholders, you’re wasting money. Even your employees may feel slighted and boy do you have a problem on your hands when that happens.

It’s not a good recipe, no matter the size of the company.

Nearly three years ago I wrote series of articles that I called Lucy’s Sail (Google), about the change of OWN’s business direction and our focus and commitment to the cloud. It almost instantly made me the SMB community public enemy #1 but after thirty-something straight months of profit and revenue growth during the implosion of the US economy there are few people out there that doubt the cloud. That debate ended a while ago and even today the perennial powers of HP and Dell are both reporting lower demand for steel.

Imagine a crowded room full of people that love to talk and everyone has a microphone. Sometimes in order to get your message out you have to either be louder or just make the most extreme comment you possibly can in order to get people to start paying attention. I believe I went with “You have to redesign your business around the cloud or face career choices of a used car salesman or Geeksquad handy man dusting CPU and case fans by day, installing TVs at night.” I went on to hire Andy Goodman as my personal body guard and during one of the MVP meetings in Seattle sat down with Paul Fitzgerald and Kevin Beares to talk about their Aurora concept.

What I actually do for a living

I am in the business of making money. So while at times I may say stuff that makes you scratch your head, polar opinions rarely make it into contracts and into checks – there are no absolutes. So when it comes to the cloud – yes, it is and will grow as an even more dominant technology. But does that immediately or ultimately signify the death of all desktops, servers and client owned IT infrastructure? Only if you’re suicidal.

When I first spoke to Paul and Kevin about what I was working on, I explained that I have been doing the “hosting” business for a long time and actually worked with clients directly in the late 90’s on helping move things to the data center. One thing I learned early on is that in a utopian IT deployment, the client would retain all the control and data storage but outsourced all the nightmares: licensing, security, patching, upgrading, backing up, planning for capacity upgrades and general maintenance. Your typical small or medium business cares extremely little about their IT overall – but they care a lot about their data. Even the more IT strategic companies that buy the latest and the greatest will cringe and think about the TCO and costs associated with keeping everything moving. Here is what the SMB IT needs to look like:

Your small business owner does not want you to build a chicken coop, get bird feed, install a solar power array or a wind turbine to power the kitchen and then make them slaughter a bird every time they want a chicken. Ron said it right: “Set it and forget it.” –  they want you to set their IT up and they don’t want to think about it, hear about it, meet you to consider projects or plan to eat a roasted chicken 18 months from now.

Your typical small or medium sized business loves the cloud because it’s simple, efficient and easy. But if they knew the risk, they would take their data control a lot more seriously.

If you Google for “cloud downtime” or lost data you will see that cloud is far from bullet proof or immune from problems. Stuff goes down. And when it goes down it’s not like an eMachines box that comes back after a reboot – it’s arrays and arrays and arrays of clusters that need to be brought back up. Some cloud providers have even lost their clients data – permanently.

So what’s the competitive advantage to the IT Solution Provider who wants to fulfill their clients need for a simple and manageable IT but wants to give them control over their data? This is a long conversation Kevin, Paul and I had in ‘07/’08 and those guys delivered their vision in the form of Aurora aka Small Business Server 2011 Essentials. Here is mine:

ExchangeDefender for SBS Essentials

ExchangeDefender Hosted Exchange now directly integrates in SBS 2011 Essentials for account management, control and maintenance:

Built in directly into the SBS 2011 Dashboard, you can manage your ExchangeDefender cloud services and see any service alerts, service status, link to the documentation and all the relevant stuff without all the complex things your typical user does not care about.

It ties back elegantly into your Shockey Monkey portal which is already branded with your logo, company name, your pricing scheme and backed by a company that doesn’t compete with you. The authentication isolates accounts and change management to the accounts owned by this company and gives them the full management power without having to remember passwords or hop from service to service, site to site.

Account management is dead simple and gives the business control they want without the mess or complexity they don’t want, don’t need and can’t afford.

Tie that in with the Outlook 2007/2010 integration between ExchangeDefender and their desktop, Shockey Monkey backoffice management that gives you support and integration back to your PSA, ability to link in your existing business model with a cloud service provider that delivers seamless integration across Hosted Exchange/SharePoint, Offsite Backups, business continuity, hosting and everything else you need in the cloud where you call the shots, name the price and keep control of your client? How’s that business model looking now?

Oh, one more thing…

Wouldn’t it be cool if this thing also took all of the data your client stores in the cloud across Exchange, SharePoint, ExchangeDefender and so on… and created a local backup / snapshot / cache on your SBS 2011 Essentials box? Turning the local server into a secure storage locker for all your cloud stuff that you don’t want to build yourself? I hope that got your attention and I’ll get it to you later this year, but everything else you can have starting tomorrow after the TechEd launch. If you see my guys there, make them show it to you live.

Anyhow, my name is Vlad and I just built your business model and support tools for the next few years.  Click here and then give me a call.

Some of you that work closely with my team have heard that we have a beta of ExchangeDefender hooked up with SBS 2011 Essentials (server formerly known as Aurora). In effect, the software is designed to give microbusiness clients a way to centrally manage all their accounts – Exchange 2010, SharePoint 2010, ExchangeDefender and have the modifications applied to their SBS 2011 Essentials server.

We’re currently seeking a second wave of beta users. To apply, send email to: beta@exchangedefender.com

Requirements:

Active ExchangeDefender Service Provider

Active ExchangeDefender Exchange 2010 mailbox

Functional, physical, SBS 2011 deployment (no virtual machines)

System requirements exceeding Microsoft’s minimum hardware requirements for SBS 2011 Essentials.

Ability to provide admin access to our dev team for deployment and troubleshooting purposes.

If you meet all of the above requirements, we’d love to get the integration rolled out for you. There is no fee, no minimum number of users or a commitment / contract.

The overall experience will integrate the way users already manage their ExchangeDefender services (Exchange, SharePoint, ExchangeDefender) and unify the account signon and credentials across the systems.

Overall Strategy

Exchange 2010 + SharePoint 2010 is our dominant product – and SBS 2011 Aurora is yet another brick that helps small businesses climb to the cloud for services that they don’t want to manage but keep their important data and backups local. By bridging the two we can reduce the amount of maintenance and double-management happening between the cloud service and the on-premise file server.

If you’re wondering how this fits our overall strategy – in 2011 you will see announcements from us, Dell and Microsoft that unify HaaS (Hardware As A Service) and SaaS (Software as a Service) and go towards eliminating a lot of the cost and a lot of the concerns businesses have with storing data on systems that are not under their physical control.

Of course, that’s just the tip of it. If you’ve been in tune with the messaging out of OWN as of late you know that we’re extending our amazingly successful platform in more and more areas.

It’s like having your cake and eating it too

I have written many stories on the Microsoft cloud control, dating back to the big WPC announcement and the infamous “coownership” tag Microsoft originally put on the idea of working without a VAR in the middle.

Few talking points in the VAR world are as venomous as the topic of billing control. It falls in the same neighborhood as criticizing someone’s religion or trying to change their mind on taxes – it’s a topic loaded with belief and faith and very little fact – with the exception of one: the VARs feeling like Microsoft’s got a hand in their pocket taking their money and the profits they could (or should) be making from their clients.

Microsoft allowing partners to directly bill for cloud services is the IT resellers channels version of “iPhone on Verizon” or “Duke Nukem Forever is ready!”

The fact of whether or not Microsoft should allow for this to happen really comes down to multiple facts that nobody has an answer to: Is Google beating Microsoft for the customers? Has BPOS been a glowing success? How big are SPLA revenues?

Allow me to break down the decision making tree, free of PR junk that keeps on entering this conversation. Remember, only the bottom line $ matters here because we’re not trading emotions, we’re dealing with 3 companies fighting to please their shareholders.

Is Google beating Microsoft for the customers?

With Ozzie’s departure, Microsoft finally unwrapped it’s tombstone on the grave of the innovative company it once was. Today, even Bob Muglia left – the man who has basically built Microsoft’s server / enterprise business. Who is left? Ballmer and Turner.

With Kevin Turner at the helm, Microsoft has become about one thing: We need to beat our competitors. Simply put, Microsoft chases.

Google Apps brought you Microsoft BPOS. Google came out with a low cost email product and Microsoft had to do the same.

Milestone 1: Microsoft will turn over billing control to partners when it becomes obvious that it alone cannot outsell Google.

Has BPOS been a glowing success?

The answer to this question varies depending on who you ask. If you ask Microsoft partners who have lost clients to Microsoft or Google, it has been very successful. If you ask Microsoft and it’s PR engine, it has been extremely successful and they will quote a long list of Fortune 1000 companies that moved to the cloud with them.

Then you consider that Microsoft had to rename the product and restructure it.

Milestone 2: Microsoft will turn over billing control to partners once it recognizes that further sales depend on the partner alone.

How big are SPLA revenues?

Microsoft partner argument for billing control is on the grounds that Microsoft partners offer critical value to the end client. However, Microsoft offers all the parts needed to build BPOS – it’s even in the SKU list on the SPLA agreement any Microsoft partner can sign with Microsoft.

So if the partners provide so much value, why aren’t they building it themselves?

Or are they?

Milestone 3: Microsoft will turn over billing control to partners once the SPLA profits fall below the BPOS profits.

To sum it all up..

This is all my personal opinion of course – but the track record clearly makes Microsoft a chaser in the IT world. I’m sure they would rather sit back and just keep on cashing in on market leading Windows and Office products day in and day out.

But Google crashed the party and Microsoft had to respond. Microsoft had to respond in a way that would make them a serious contender: By bypassing Microsoft partners, Microsoft was able to control the cost and make itself competitive instead of being priced out of the competition entirely by it’s partners and VARs.

So is Microsoft beating Google? Are it’s partners building their own BPOS – to the extent that there is no reason to turn it’s control over to it’s partners – or is Microsoft losing them to Google? And finally, are partners stopping to sell Windows & Office and to what extent?

This is all that matters to Turner. This is all that matters to Microsoft.

With Microsoft trying to push Office down with the cloud, it may finally answer the question on how relevant it’s partners are to it’s success in the cloud age – and the numbers behind it are known to only two companies: Only one of them writes software for a living.

For additional perspective, download the latest Looks Cloudy podcast with Kate Hunt and Larry Walsh as they discuss the VAR control in the cloud.

My opinion remains that Microsoft has decided it doesn’t need VARs or partners in the cloud. If they are all in the cloud, and they believe they can take Google and Apple alone, then the only partners that matter are the ones that make stuff (hardware – Acer, HP, Dell, Samsung) and not the ones that deliver services that Microsoft should be delivering.

It’s all about money. Don’t expect Microsoft to share it unless it’s absolutely critical.

I’ve been reading a massive amount of coverage about Yahoo shutting down Buzz (competition to digg.com), AltaVista / AllTheWeb (competition to google.com) and del.icio.us. There is far, far more coverage and opinions presented over at www.techmeme.com

I don’t really want to harp on Yahoo!’s woes, they messed up when they didn’t shuffle all that mess to Microsoft and in business sometimes arrogance trumps your business opportunities. That’s just a part of it all so you can’t feel too bad for Yahoo.

However, these moves have two problems:

1) Lack of faith in management

2) Lack of adoption of new technologies by developers

We can ignore #1 since that’s a backwards looking aspect. People that made the mistakes of purchasing these properties for millions or billions of dollars are long gone.

You can’t quite ignore #2. When your development excitement dies, you die. Look at Windows Mobile for example, it had been so neglected that poor Microsoft had to give it the ol’ yeller treatment behind the shed and come out with the device that is modeled after it’s second most popular consumer electronics product after Xbox – Zune! If you’ve seen all the AT&T commercials (and are a marketing freak that pays attention to those things) you’ve noticed that even the Zune penis monster is back in the commercial as a little green or purple beast:

As we learned in Super Bad, people don’t forget.

And like developers haven’t forgotten about Microsoft’s mobile woes, they will not forget about Yahoo’s either. Microsoft, despite a relatively decent platform and truckloads of money, is not having much success drawing people to develop for them. Not because the platform sucks. Not just because their app store is reportedly stiffing developers and reporting that many won’t be paid until sometime in late January… I can go on but you get the picture.

After the Kin apocalypse and the Microsoft mobile resurrection, many who would likely be ecstatic to develop for the new platform that is so closely tied to the most successful software product of all time.. will likely stay on the sidelines.

Two Sides To This Story

Sometimes you have to admit to yourself (and your shareholders) that some of your investments aren’t all you’ve expected them to be. Lord knows we all have our own share of failures.

However, this is where honesty helps more than bravado. You don’t just take an axe to the leg and start chopping. You explain why it’s necessary. You admit the mistakes that you’ve made that eventually lead to the end result of having the product line killed.

You will never, ever, see the above happen. Ever. Never ever. Because organizations ran by VC and shareholders that overpower the management have a secret handshake agreement that absolutely prohibits honesty.

Being honest about f’ing up not only gets you fired, it makes sure you never work again. It also opens up a stream of class action lawsuits from angry shareholders and scumbag lawyers that make the new managements job of rebuilding the company even more difficult.

Lesson

Communication matters.

Honest communication matters even more.

Transparency matters even more.

Once you lose control of what you are building, and you do so with other people’s money, makes you both more risk averse (“I don’t want to be the one to burn this building down”) and less innovative (“Can’t we just buy something that looks like what we want instead of building it?”)

But let’s say that you can’t do any of the above for whatever reason. Can’t be honest cause you’ll get sued. Can’t be transparent because people will call you on your BS and point out everything you’re doing wrong. Can’t “un-VC-yourself”. Let’s say all of those are dead ends, what now?

Only one thing: Put your head down and focus on what you’re good at – and focus on being the best you can possibly be at the thing that people value about you or your organization the most. In a fast paced technology world where hype is at times more valued than common sense, consider the fundamentals and perhaps even allow to be passed by once in a while. If your foundation is strong, you can experiment – if not, it’s just a gamble (and a dumb one at that).

In the recent months I have been talking to several of our close partners about the competition, specifically with regard to Microsoft’s BPOS product. Currently, Microsoft has the single biggest advantage in the marketplace for Hosted Exchange and that advantage is the price.

There are some nuances that can be argued over – such as liability, cost of billing, whether or not it is or is not channel friendly, features, limitations, etc – all of which have been addressed in one post or another on Vladville.

The only time I hear about BPOS is when our partners lose their clients to Microsoft.

Let me restate that: The only time partners lose business as VARs/MSPs/etc is when the clients realize that they can work directly with Microsoft and that there is no reason to even consult with the partner.

This is not the case of Microsoft not being channel un-friendly, this is the case of capitalism and Microsoft providing something that the end users and businesses demand.

In this scenario, the discussion comes down to price: Can you do it cheaper than Microsoft and remain the service provider or are you on your way out?

For a lot of people dealing with BPOS, this is their last meaningful IT project they will undertake: the migration to the cloud. Literally all the successful stories around the direct-to-user cloud are from integrators that helped the client move on up.

Can’t fight that.

If the price is the only consideration, we’ll help you keep your clients. Certainly not under the Own Web Now umbrella or our staff & service – but the time for discussion on whether the cloud is real or not is sort of a mute point when you’re losing clients and opportunities to Microsoft who is one tool (Kaseya/LPI/nAble) away from making you an unnecessary obstacle.

If Exchange is to be a commodity, you need it in your solution stack with the appropriate disclaimers – and we’ll help you deliver it. If on the other hand you expect service levels and a product suitable for business, we already help tens of thousands of you deliver it today.

If you’re interested in working with us (and details), vlad@vladville.com.

It launches in November.

Earlier today I got a question that I feared answering for a long time. I have to be completely honest and admit that I didn’t think it would take this long for someone to ask it, especially considering that most of my blog posts are about the future of IT solution providers. The question is very similar to the scene where the Bob’s ask Tom to describe his job: “What would you say… you do here?”

The question posed to me was:

“With all the stuff that you guys are doing with Shockey Monkey, are you guys giving up on being a security company and moving towards becoming a CRM player?”

No, we are not.

Now, the longer part of that answer is a little more complex. You see, for the better part of the past 20+ years, Microsoft has controlled the world of small business applications. With few small distractions by IBM, Novell, Intuit and even Linux, the world of business computing has been all Microsoft and nothing but Microsoft.

Microsoft was able to extend it’s relevance by abusing it’s monopoly to blackball computer manufacturers, crushing Netscape by giving IE for free, etc. But they were not prepared for the Internet. They were not prepared for mobility.

This has opened the marketplace to the level that Microsoft is no longer a dominant platform – and very soon not even a dominant business software solution. Today Intel bought McAfee. In cash. They could have gotten them for far less in the past. Yet, they decided to go for it now. Why?

Why? Because Microsoft is no longer the defacto platform of the Internet, mobility, search and application. Which means dealing with security outbreaks will become a bigger and bigger business.

Everyone that has been reading my blog has seen what Own Web Now has been up to.

I want us to extend our footprint in security — but I now also have the opportunity to extend our applications.

So the answer to the question of if we’re changing our focus is yes. The “platform” game is pretty much set. I don’t see many people buying servers. Ever again. Yes, I’ve heard about Aurora and I’ve heard about EBS and I’ve heard about WHS. Very impressive. Except it doesn’t sell – because people buy solutions, they don’t buy hardware.

Follow what sells. Everything else is a distraction.