As of late the word out of Microsoft has been nothing short of idiotic fanboyism: Don’t look at others, we’re changing the world man!!! So it’s nice to see some realistic stuff come out from Microsoft that actually addresses the concerns - by the head cheese himself. You can read the whole note in its entirety here.

Some notable excerpts:

· Windows: The success of Windows is our number one job. With SP1 and the work we’ve done with PC manufacturers and our software ecosystem, we’ve addressed device and application compatibility issues in Windows Vista. Now it’s time to tell our story. In the weeks ahead, we’ll launch a campaign to address any lingering doubts our customers may have about Windows Vista. And later this year, you’ll see a more comprehensive effort to redefine the meaning and value of Windows for our customers.

For what it’s worth, lingering doubts is a little soft. People hate Vista and Office 2007 enough to ask for illegal or old copies of XP/2003 or abandon your entire platform and application to head over to a Mac.

Apple: In the competition between PCs and Macs, we outsell Apple 30-to-1. But there is no doubt that Apple is thriving. Why? Because they are good at providing an experience that is narrow but complete, while our commitment to choice often comes with some compromises to the end-to-end experience. Today, we’re changing the way we work with hardware vendors to ensure that we can provide complete experiences with absolutely no compromises. We’ll do the same with phones—providing choice as we work to create great end-to-end experiences.

It’s nice to see that they actually recognize this now. For years Microsoft’s stance was: “Apple is not really our competition. IBM is.”

I’d like to propose something here. Take the $300 million and take $150 out of it and go by a webcam. Record Steve saying that out loud. Seriously. Add a soft voiceover: “Mac. Great for indulgent douchebags and toddlers that think the computing world revolves around myspace. For the other 97%, come take a look at Windows.” Invest the remaining money in the “Vista: Sunk Ship” campaign you were going to go with.

Seriously, how is it that a guy that runs f’n Microsoft can put together the reality of the business computing so eloquently in one paragraph but nobody thinks to run with the message on the actual facts?

Looking ahead, I see an incredibly bright future for our company. As I said at the June 27th Town Hall for Bill, we are the best in the world at doing software and nobody should be confused about this.

Nobody arguing that. We just wish that was what Microsoft focused on again.

You cannot be all things to all people. Or you turn into a Walmart. I for one think Microsoft is better than a Walmart, I hope Steve realizes that and figures it out before they lose even more ground. That’s the big Microsoft problem - it’s trying to be everything to everyone and everywhere all the while it’s competitors are getting better and better.

Oh, and for some Dilbert levity, kudos for the PHB quote:

5. Focus on employee excellence.

Apple has been making some noise lately with the new iPhone 3G. While I’m a die hard keyboard fan, I rarely talk on my cell phone but carry around my iPod Touch everywhere and its easily my favorite gadget. Why? It works with my business stuff and it lets me enjoy the nice part of this business - the friends.

So last night I checked the Apple iPhone inventory and they had iPhone in stock. I showed up at about 8:20 am this morning and got into a line. Don’t get me wrong, I live in Disney World and standing in a line for 90 minutes for 45 seconds of fun is just a part of the magic.

I stood there and typed a long email to Howard and by the time I looked up nearly 30 minutes had passed and nobody had walked out the store. Finally, one person out with his iPhone 3G. I was not about to wait and figure out how long the 100 people would take to get through the line.

Just how hard did Apple and AT&T work to screw their customers? It’s pretty amazing, and intentional, to force people through the in store process and not rely on the online system that was used in the original iPhone launch. Is the iPhone that special that over a week after the launch they cannot properly stock and distribute the iPhone? Not really, they just don’t want to. They know that people standing in the lines are there just chomping at the bits to get the iPhone, so why not take the opportunity to make you stare and play with the entire Apple assortment of solutions while their 16 year old “geniuses” learn how to type.

Needless to say I left, but you know who I feel bad for? Microsoft. How demoralizing must it be to work there and see their competitor bash them in the press and television, come out with crippled services, uber-closed devices matched with extensive inability to meet the demand for both the hardware and software (Google for Mobile Me woes). You break your back working on Windows Mobile, team up with companies to build hundreds of solutions and offer variety and choice - just for the clients to vote with their feet away from you, away from your solution and away from your partners.

As tough as this may be for Microsoft, it’s an inspirational event for the rest of us. If you design a killer product that people want, they will take the abuse and tolerate problems because only you have what fits their needs.

As an entrepreneur, it is a pleasure to see that a giant multi-billion behemoth is unable to compete when customer is king.

It’s Friday… time for something lighter.

There comes a time in every businesses lifecycle when it has to realize that it has been surpassed. That is the challenge of running a technology company. You try to lead and run with one leg but the other leg is dragging you back with all your relationships, legal woes, criminal behavior and the blood of enemies. In such times you have to figure out what is the best thing for you to do. Stand still and make the best out of your circumstances or try to run and hope that nobody digs too deep and sees beyond the marketing.

Earlier today Sarah and I chatted for quite some time about the challenges Microsoft sees today in the marketplace. Sarah was on SBS Show #20 (hey, we should do one of those together again!) and has a very popular blog, is a writer for RWW.. she is by no means perfect: she carries a Blackberry and is a huge fan of Mesh. And as some of you are aware, my opinion of Mesh is:

Microsoft Mess: Translucent blue theme for FolderShare combined with a rather crippled version of logmein.com functionality, sprinkled with missing features, beta tags and overall admission by Microsoft that it cannot compete in Web 2.0

Sarah feels that this is a double standard.

Of course it is!

I don’t know about you, but I tend to hold a $60 billion a year software company to a higher standard than a Silicon Valley startup with three dudes and a gfx d00d in the basement. But that’s just me.

Is it fair that people distrust Microsoft while completely falling head first in love with everything that Google does? Of course it isn’t fair, people should not be distrusted just because they are convicted felons with lawsuits over anticompetitive behavior across every continent except Antartica.

Is it fair that Microsoft is being slammed for their S+S move and going more direct? Of course it isn’t fair, but the people complaining are the ones that played a major part of that $60 billion dollar a year business.

So what can Microsoft do?

That advice is going to cost a few million dollars.

But I’ll tell you how Microsoft is going to continue to fail in its efforts until it can look in the mirror.

Microsoft wants to compete in the new world with the old tools.

It wants to find friends in the new places but it’s new friends don’t want to hang out with its partner base.

That’s the darn truth.

Microsoft wants to be relevant in the Web 2.0 world but it wants to bring over all the baggage of its current tools and systems that the Web 2.0 generation rejects.

Microsoft wants to compete with Gmail with Exchange. That doesn’t work. Exchange is too cheap (for partners to resell at a wage that sustains their business) and too expensive for people that want a free solution.

The consumer and business isn’t wrong. They have options for free and while most cannot hold a candle to Microsoft in terms of feature set, they may be good enough to get the company up and running.

But surely after company grows enough it will need Microsoft tools, right? Right? They will need a server, they will want to invest money, they will try to clean up and.. right? Well, let’s look at Microsoft’s main competitor to Vista. Is it Linux? LOL. Is it Mac OS X? Oh, it’s Windows XP? You mean to tell me people will just take something that works over the latest and greatest that doesn’t even though its several generations ahead of everything else on the market in terms of security?

That is the part that Microsoft is scared about.

Microsoft knows that when a company chooses a platform it takes a lot of effort to get them off it. Why do you think they constantly gloat about how many Notes deployments they took over? Why do you think they keep on harping on Oracle so desperately? Because they want the platform.

Google either doesn’t make or loses remarkable amounts of money in its many properties simply designed to get you to click on ads. They are an ad company.

Apple, in their own right, is now the king of mobile computing. iPhone gives them a platform for applications that no other company has.

So where is Microsoft? They are not a consumer favorite. They are not a bleeding edge favorite. They are not a very stylish or cool company. They are a business solution.

As far as business solutions go, they are the best.

But Microsoft’s failure, and ultimate undoing, is that it is at its core a company that wants to dominate everything. It cannot settle for being second best. It cannot settle not to own the defacto standard and concede that to PDF, it cannot accept Flash everywhere so it must come up with Silverlight, it just cannot tolerate one ounce of competition.

And now Microsoft finds itself at the crossroads.

We are the defacto leader in the commercial software space.

But our client’s don’t want that.

And in its effort to be the biggest, best, first and only solution everyone should ever consider for anything, Microsoft finds itself making more enemies and less and less friends.

That is not a company or a climate that I would bet on.

Microsoft can continue to exist as the best and biggest software company that makes business solutions. Microsoft can even design the online application suite that works and draws users to them slowly.

But Microsoft shareholders are not patient.

Microsoft management is not patient.

Microsoft made $60 billion in revenues last year. Google just cracked $5 billion yesterday. Microsoft is jeopardizing its $60 billion company to curb the dominance and rise of the $5 billion company that only exists to sell ads and systems to support those ads.

Can Microsoft and it’s shareholders be happy with the $60 billion a year? How quickly will we see a call for the change of management at Microsoft as they keep on losing the share of their cash cow and become less and less relevant in the Web 2.0 ad cloud?

Microsoft lacks leadership and Microsoft Mess proves that - instead of something new and fresh at the core it’s same old Microsoft - crippled acquisition, feature and functionality incomplete until Version 3.0, poorly integrated across the range of current applications but a big promise of SDKs and a plea for someone to please pay attention to it.

“The point is, ladies and gentleman, the greed - for lack of a better word - is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, greed for money, for love, knowledge - has marked the upward surge of mankind.”

It also served the upward surge of Microsoft and got it to $60 billion a year.

But will Microsoft realize that it now needs to change…. because as motivating as the quote above is, the guy who said it ended up in jail and lost it all. Will Microsoft?

Folks, I have done as much as I possibly can for you to communicate your concerns to Microsoft. We’ll see what happens. However, I have a job to do and I don’t have much more time to spend on this so I’m going to give you some leads and let you communicate your pains directly to Microsoft.

You should first start by getting in touch with Steve Ballmer (CEO), Kevin Turner (Chief of Operations) and Allison Watson (Partner Program)

If you are an SBSC or Small Business Server focused contact the two ladies below:

Andrea Russell
Small Business Specialist Community
Andrea.Russell@microsoft.com

Aanal Bhatt
SBS/EBS Parner Marketing
aanalb@microsoft.com

If you have feedback specifically about how the SBS/EBS product group can help you ask Kevin:

Kevin Beares
SBS Community Manager
kbeares@exchange.microsoft.com

If you’d rather talk to a partner and you’re scared to talk to Microsoft directly:

Partner Area Leads
https://partner.microsoft.com/US/40011087
Mark Crall, USA
Vijay Riyait, UK
Travis Hilton, AU

And to see if any of your feedback is making any change in direction keep an eye on this blog, Steve is the go-to guy for S+S:

Steve Clayton
Microsoft S+S Evangelist
http://blogs.msdn.com/stevecla01/
Twitter: @stevecla

Here is where we stand right now:

Microsoft has decided that this is the direction they are going, partners be damned (or however you interpret 6% commission for handing over your clients to them) there is more money in fighting with Google than working with partners on a premium solution.

For the partners side, you guys are angry, dismayed, betrayed and aren’t going to take it anymore. One of the people I respect a whole lot in this space said it the best: “I am not going to mention or allow any solution that takes my customers away from me.” So partners will build a wall from Microsoft.

As for me, I have done all I can even though it isn’t my job. I have not received a Cease & Desist letter from Microsoft and since a pr0n scene with a Microsoft logo is about as low as I can go I don’t have much more to add.

I’ve done my best to eloquently voice the pain that you have expressed to me, I have been told that it is what it is and it’s as good as it gets (masked with some mocking and patronizing) so if you have the time to pursue it further for the greater good of our community please follow the contacts above.

I have summed up why I think this stalemate is bad for us all, but at the end of the day I have a job to do and it’s not fixing Microsoft and it’s partners. I’ve done all I can for you folks, try the shrimp and tell them Vlad sent ya.

I’ve spent the better part of last few days talking with partners, working with a few of my Microsoft friends and trying to make sure they don’t get fired for knowing me, trying to get to the bottom of why the Me S+S is perceived as something that is not good for us.

Go ahead and throw the axes and feces this way, yes, I told Microsoft where they messed up and how to correct it. The bottom line is that we all compete at a certain level but we also win tremendously when we all play along and do what is in the best interest of the customer. We have to find a way to work together on SMB solutions - that in fact is the reason I am unhappy.

Question: Why is Vlad upset about this, he’s being handed gold hand over fist with Microsoft pegging their compensation at 6% while his partners get 10x the storage, can mark up the solution 50-200% without blinking (yes, most our 10GB Exchange hosting is sold at $15-$30/mbox) and they get their branding and control of the client too. Why is he raising a stink over this?

My primary concern is my business. Always. My second concern are my partners, people who make my business possible by offering our solutions and helping us build solutions that their customer base is demanding. With what I think is close to 20,000 partners at OWN it is my responsibility to bring up their concerns. They don’t like S+S.

I am upset over S+S because it makes me look bad for confirming partner suspicions that Microsoft is not to be trusted. So for years as the MVP, as the vocal supporter of the SBSC, as the advocate of using Microsoft software I am now seen as someone that sipped the koolade and sold out the SMB partner base to Microsoft.

I am upset over the way S+S was pitched because it used the word competition about 5,000 times during the keynotes. I have spent years to communicate to this channel that cloud is a complementing technology that can make sense for some customers and that there is a decent business to be built on top of it. Microsoft just came out and effectively said “This is the future, suck it. You can be a part of it or go wash cars”

Finally, I am upset over S+S because I know what my partners are going to do about Microsoft suddenly playing in their back yard. They will throw the anchor out, build walls around their business and their customers, consider Microsoft competition and the feedback train stops there. This is bad for all of us - partners, slimy vendor whores (me) and Microsoft. Instead of working together we are now protecting our own turf. How exactly are we going to win? Make no mistake, partners see Microsoft as their competitor now. By association, so am I.

Question: What should Allison Watson say/adjust in time for Australian WPC and TechEd?

Dear Microsoft, ever noticed how none of the partners seem to have a problem with Google? Ever notice how none of us pay attention to them and use them for search, advertising, shopping, even gmail.com? Ever wonder why that is?

It’s because we as Microsoft partners do not compete with them.

We as Microsoft partners have a larger software portfolio, far more functional and integrated software, pricing and licensing options, ability to design custom solutions that really fit the clients needs. That in fact is how we become the trusted advisors that Microsoft urges us to become.

Now when you jump on stage and use the word compete over and over, declare that you will win, I know you are talking about your competition with Google, SalesForce, Apple, and so on. But guess what, we do not compete with those companies as Microsoft partners! We use Google search appliances. We sell and manage Apple computers - for gods sake even you write Microsoft Office and cloud solutions for that platform!

You need to be aware that when you talk about competition to your partners whose entire business is built on the on-premise solution, your competition is with your partners. You are perceived to be devaluing your solutions and while offering them to the same market that we serve you are competing with us.

Many partners I have spoken to feel that Microsoft has taken the software solutions that partner currently have their businesses and their clients businesses built on, and packaged them into $10/month S+S pitch.

So let’s review customer options - $10/month/mbox or $5,000 for the server, $300/month for the ongoing MSP fees, antivirus and thousands more for the migration work… How is a partner going to win in a price conscious market?

It’s not a problem when Google comes up with Apps because that is a consumer play and those customers will eventually come to partners when they need the power of Microsoft applications. It’s not a problem when Apple comes up with Me because that is a consumer play all the way that will never result in a Microsoft partnership.

It’s a huge problem when Microsoft comes out with S+S because it offers the same tools, our services, our value proposition, our go to market strategies and undercuts them by a factor of 100 or more.

How can a Microsoft partner win when you are perceived to be against their best interests?

How can you expect to have any partners if your partner conference is a giant announcement that you intend to compete with the people sitting in the room?

Question: Well, it’s the future so how do we soften the blow?

Be more cognizant of who your partners are.

Who in their right mind thought that a Walmart story was a good cherry on top of the keynote that announced head-to-head service offering that will compete with the mom and pop partner businesses in the audience?

Most Microsoft partners I know, as a matter of fact almost all of them, are small businesses. Small businesses that until this point saw Microsoft as a big manufacturer and promoter of their industry. Last week Microsoft just put up a huge Walmart sign in every neighborhood around the world that says “Lower Microsoft Prices. Always” in the minds of Microsoft partners and promised that Microsoft will win!

To take analogy a little further, the businesses that used to partner with MicroMart are now it’s competitors. The MicroMart partners that will win in this business are the ones that will work as MicroMart’s vendors in building it’s warehouses, producing it’s marketing and opening up little nail salons and Dollar Tree stores right next to it. All the mom and pop partners that currently exist will either turn into Jiffy Lube oil change car chop shops or try to serve a luxury clientele.

I’m sorry Microsoft, but how exactly did you figure that was a good idea?

Why is it that people only seek to open up the community channels, ask for feedback, have an ongoing conversation and attempt to win hearts and minds after they have launched a nuclear assault?

In case you have been out for the past week, last week Microsoft made an announcement that due to the pressures in the marketplace from Google, Apple, SalesForce and others it has to change it’s business model to be direct with the customer. While traditional business model will still be there, Microsoft will push for more and more direct business.

On the face of it, this is nothing new as Microsoft has already competed in consulting with Microsoft Consulting, as well as direct financial and licensing relationship with the customers with Software Assurance and Microsoft Financing. The new angle in the conversation pertains to the Microsoft offering ongoing services to the client which rightfully entitles them to fully managing the client, marketing solutions that compete with the current technology or support provider, bringing in their preferred partners instead of the ones currently in the account, etc.

Was Microsoft simply foolish when they came up with the S+S model that effectively destroys their partner community? Microsoft is a lot of things but they are not fools. In the process of pricing and designing services you look at what your competitors are doing.

I was put through the same cycle of advisory blindness when Google purchased Postini. “But boss, they are advertising their prices on their homepage with one-click purchase, can’t we do away with the partner program application?” In short, no, because we are a partner company.  Somehow people failed to remind Microsoft of that when they me S+S ed up their strategy. I’ll tell you exactly what they did - they looked at the Google Apps or SalesForce and thought:

“You know what, instead of pushing this through Volume Licensing that requires a lot of paperwork why don’t we just do what Google does and we’ll even one up it, we’ll give them 6% commission for just doing the referral. Let’s face it, nobody that is interested in this will work with the partner anyhow, and they get a few bucks out of every conversation so we can go direct and be partner friendly at the same time!”

Where Microsoft lost it’s partner community in the me S+S is in the fact that we know their business and their business practices better than they do. We know how Microsoft markets. Sign up for a few newsletters and they give you a few more. One group pushes another and the TechNet subscription offering with an enticing free software offer comes up in the sidebar. Soon even Microsoft Action Pack and MPAN find their way into the newsletter. Coincidence? No, just trying to break into the account with a Microsoft solution. Genius. Want to see how this plays out for you when you recommend or offer Microsoft solutions?

Microsoft owns the client. They need to stay in touch with them and offer them valuable services of course. Why not use the opportunity to upsell?

    Click here to buy Vista Ultimate, now 30% less!!!

Partner just lost a licensing deal. Microsoft should also be an active participant in the community. So it should naturally invite it’s customers to local events where material can be tailored for the customer that is not managed by a partner.

    See how easy customizing CRM is? Let’s do a quick marketing blitz!

Partner just lost on the advisory fees, consulting and perhaps further sales. But what is the ultimate exit?

Growing? Need local servers? Need managed services? Want help with migration from Lotus Notes or SalesForce? Well check this out, our partner locator. Which ZIP code do you live in sir?

Quick question, who climbs to the top of the partner locator? The partners who take clients best interest and recommend software and solutions that make sense and not ones that collect the most PAM and Microsoft Partner Program Points? Good night.

Let me repeat: Microsoft is not a fool. They know what they are doing. They likely have a ton of metrics and numbers to justify the fact that the SMB consulting space should not exist beyond a certain level. To an extent, I agree with them in that and have written extensively on how you can avoid falling into the dinosaur herd.

Microsoft made a fatal mistake in it’s direct approach because it showed it’s hands.

No number of adjustments to the course is going to make partners feel easy about the long-held suspicion that Microsoft is after our clients. They just came out and confirmed those fears, laid down the rules of the game, pegged the partner value at 6%, dictated ownership of the client and the right to do with them as they please.

Where does this leave you? Well, you could jump the crocodiles from one solution after another and hope to stay one step ahead of Microsoft as they move all their applications to the cloud and make the on-premise or partner solution unprofitable or unjustifiably expensive.

Does the significance of the problem make sense to you yet?

Does it now make it painfully clear why I’ve written so many sharp articles bashing the mindset of SPF and riffraff? Did you listen to me all this time that I’ve been waning you about the impact the SMB space will feel as the complexity of the solution spectrum goes away? Do you now understand the value of having a business over a specialty and a passing hobbyist interest in making a sustainable wage without taking it seriously? For your sake, I hope it did. You may not enjoy every picture and agree with everything I say, but if I were out to screw you do you really think I would waste all of my time talking to you about it? How do you like me now? Still afraid to call and talk to the big bad evil Vlad? Have you made your decision yet cause the clock is ticking… the only thing that has changed is that you don’t have to blindly trust me anymore because the cards are on the table.

Indeed we do, as cliché as it may sound. Microsoft and Microsoft Partners have a problem. Few problems are among us as partners, some are between us together and our competitors and clients. But we have serious problems that have only been amplified by the WPC’s show of ignorance for the concerns SMB IT have voiced.

Microsoft WPC is supposed to energize the partner community, give it full faith in the products and services Microsoft will offer next, reinforce the Microsoft leadership in the industry and motivate us all to work together with Microsoft to benefit our clients. How did it go this year?

Microsoft failed this year by all accounts and with everyone I spoke to.

Lack of Vision: Software + Services. The catchphrase has been hammered into our brains permanently, in a largely meaningless way, and repeated every minute of every keynote. Yet it failed to clearly communicate exactly where Microsoft will lead, where Microsoft will empower its partners and where it will directly compete with us. The only clear inference is that Microsoft is starting to distance itself from the “applications on a local network with a server and some remote access” strategy it has become so dominant with.

Lack of Professionalism: Microsoft is no stranger to taunting competitors and challengers. Back when Microsoft was the dominant force in personal and business computing and a beloved technology leader the jabs came off as a spirited proclamation of victory. Last week they were soaked in desperation, paralyzing and often directionless. Kevin Turner took shots at every vendor that competed against every solution Microsoft builds, clearly failing to understand that as solution providers and developers in the real world we actually partner and work with the people he was calling out. Sorry Kevin, but Microsoft has not kept up with the marketplace demands, the illusion that Microsoft tools are the best in every scenario for every company only exists in your head, solving Microsoft shortcomings with Microsoft software is not something that is easily sold to even the most gullible of CIOs.

Lack of Partner Direction: By far the biggest disappointment of the show. All of Microsoft’s executives failed to clearly communicate the partnership benefits. That is why partners pack the keynotes, to find a way to partner up with Microsoft. If you want to gloat about how fabulous you are and talk about exciting commission schedules as a brand recommender and a sales agent you might want to go work for Mary Kay. This is the biggest quagmire for Microsoft – it’s competitors are more agile because they do not have to work with partners to go to market. Infrastructure solutions are easy enough to offer and both Google and Apple and Amazon are beating Microsoft to the market, with far simpler and less convoluted solutions. How can Microsoft compete with its partners in a solution ecosystem that doesn’t require partners to begin with?

Lack of Problem Recognition: Apple absolutely decimates the public image of Microsoft’s new system and Microsoft sits back. Microsoft is constantly challenged as a company without ability to come out with anything new that captivates the business and consumer marketplace – and they dust off the research lab professors and robots that wouldn’t even make it into cheesy 70’s vision of the future. Microsoft partners pay thousands of dollars to come to the WPC to hear how Microsoft intends to fix the Vista issues and are instead handed the blame for not pushing Vista hard enough and driving deployments.

Lack of Broad Excitement: Don’t underestimate how relevant broad excitement by the overall global IT community may be. Blogs. Newsgroups. Web TV. Even more mainstream technology sites largely ignored the significant news coming from the event. In a time where Microsoft is being attacked on all sides – devices, servers, workstation operating systems, entertainment – Microsoft’s competitors are capturing the imagination and excitement of the technology enthusiasts and evangelists leaving Microsoft in their ridiculed middle aged man self as depicted in Apple commercials which are less funny with each passing day and just pointing out the obvious. Microsoft is slowly turning into IBM. Quick, how much IBM software do you run today? Microsoft as a platform is not just a .exe anymore. With AIR, with the cloud application deployments that can be multiplatform from the start, with even iPhone, Microsoft had to excite and give a great reason for someone to develop for their platform and make it relevant. In faling to do so, Microsoft jeopardizes their future.

Of All The Epic Fails…

Microsoft’s competitors just can’t do anything to wrong the client. Google ships 12 Tb of logs to a private company and destroys any faith anyone could possibly have in them yet they continue to be the most well respected brand and an emerging solution for all your business, personal and social problems. Apple bricks thousands of phones, downs their cloud me solution for days, makes their customers stand in the line for hours while their systems crash, cripples their devices and clients not only take the abuse but live to rave about how great the ends justified the experience.

Meanwhile Microsoft cannot even get its most loyal partners to consider a move from a six year old platform. With the clients showing less and less willingness to pay for the essentials and the rising competence of Microsoft’s core competitors in Apple and Linux it is hard to find what Microsoft’s vision is. Yes, Software + Services as we heard the first 5,000 times but what does that actually mean? How does Microsoft compete with the ad sponsored software? How does Microsoft compete with totally free software?

You have to be a heck of a Microsoft fanboy to look past these obstacles and answer these questions.

I am one of those unapologetic Microsoft fanboys and even I am shaking my head at this.

Microsoft clearly no longer wants to work with partners on a broad scale. Sure on the low end they want to train “partners” to be their evangelists and SA resellers. On the high end, Microsoft wants the partners to fill in the gap in the solution portfolio until Microsoft can catch up to them and replace with their own solutions. You may even scrape by in the complex infrastructure migration space where a company magically wants to replace their current infrastructure mess with a new release of more of the same and face the same problem five years down the road. Little holes, little gaps, little opportunities.

Where are the partners?

That is the key question that remained vague and unanswered. Yeah, we got it, Software + Services!

Where am I as a Microsoft partner? In 2008, higher and higher. We’ll do more business with Microsoft this year than ever before, with two huge undertakings under way. Past that, I have to admit, I am less decisive of aligning my business with Microsoft because for the first time in my Microsoft partnership I doubt their direction and seriously question their ability to be successful across the board. I don’t see where OWN fits in Microsoft’s quest to fight against itself and cannibalize its own self interests and pricing premiums. I doubt and refuse to commit my development resources on a Microsoft network that has a goal of competing with free and AdSense, I sell the value of my solutions not their mass appeal to resell others. As Dare Obsanjo mentioned this weekend, giving sh*t away is not a business model.

Steve, Kevin, Allison… you need to go back to the drawing board.

You failed to draw up a clear picture for us to be a partner in your business plan.

You have put us in an uncomfortable position where we must reevaluate our business plan and you can count that we’re going to our own drawing board, with an eraser.

Microsoft, Houston.. we have a problem. We need to be involved. Decisions and announcements you’ve made this week will make the business in the short term very good, but they ignore the long term strategy problems that have us all uncertain and desperate for answers. Answers that you have failed to provide. Those concerns don’t go away, they just fume and seriously impact our relationship in the future, which in turn limits your ambitions for the future. You need to come up with something, fast. Where does Microsoft want to go today? I honestly can’t answer that question. Can you? Can Microsoft? Everywhere is not a direction, it’s lack thereof. Microsoft, the clock is ticking - fix this while we’re still listening.

P.S. I have told Microsoft a year ago that their model will not work. I have warned partners in many posts to start thinking cloud strategy in their own service model. I have changed my business model as a result of it, I have broadened OWN reach of Microsoft cloud to native deployments in EU and in Australia, I have offered 10x as much as Microsoft does, I have a long track record of being brutally honest even when it may not be the most popular thing to say, I have thousands of partners worldwide, a mature service-oriented organization. I really do not appreciate folks offending my friends or trying to volunteer me for advisory councils or more free work, I have no intention of helping Microsoft fix the mistake I’ve given them a years worth of heads-up on. If you want this to be fixed so badly to work for you, I have fixed it. It’s called Own Web Now Corp. Hit the partner link and grow your business. Or sit back and complain while Microsoft makes you extinct. I intend to invest the next year of my professional blogging towards helping SMB prepare and embrace the cloud and grow it as a part of the solution portfolio, not as a replacement for a 6% fib. As Alec Baldwin said in Glengarry Glen Ross: “Get mad you sons of bitches.” Microsoft, do likewise. We all want our clients to get the best service at the best possible price with the best possible company. I am making sure OWN is a part of that solution. I am begging Microsoft to come aboard. I am begging you to consider it too. The choice is yours, let’s go!

As much as I can’t agree with their message and direction, I have to extend the huge kudos to the Digital WPC team at Microsoft for making the keynotes and side sessions available to the partner audience at large. To be able to sit in my office as a Floridian in a tshirt and shorts and watch the news come out live instead of through someone else’s eyes and reports has been amazing. As a partner, thank you!

Now comes the grueling task of sitting down with my team and picking apart the notes, the powerpoints, crunching numbers, designing surveys and trying to figure out how we can continue to stay one step ahead of the rest, shed the stuff that keeps us from being flexible and move forward.

I always like to take the weekend after WPC off to clear my mind a little and let the keynote euphoria wash out a little. Microsoft is great at selling themselves and their opportunity and it takes a few days to put down the Koolade, evaluate where we’re at with respect to where we could be and what we can actually pull off in a meaningful way.

Regrets: I wish I was there. WPC is about so much more than the keynotes and sessions, it’s about learning what the business possibilities truly are and learning from people that are not exactly the same as you. My boy just had his first two nights of sleeping straight through the night so in the hindsight it probably wouldn’t have killed me (as in wife with a steak knife) if I had gone. I wish I didn’t screw Mark Crall by putting an explicit image right above his corporate logo, sorry about that man. I wish we lead into WPC with a bit more of an open mind towards Apple and Google and SalesForce as it seems that trend is getting far too strong for Microsoft to ignore so neither should we.

I think Kevin Turner said it best today:

“Always bet on what your customers are telling you.”

Same to you bud. Now back to work on trying to open that conversation up, even when it revolves around something I may not like to hear.

It’s always refreshing to see Microsoft be honest about where they are in this market:

We’ve embraced this disruption, we are really in a leadership position.

It’s big of them to admit that the Software + Services was not a vision or a direction for Microsoft, but rather a competitive response to the newfound dominance web apps have started to create and diminish the Microsoft’s monopoly power over the adoption of new consumer and business applications. It’s hard to stifle something that doesn’t run on your turf, so Microsoft built a business model on top of it and found a way to offer, market and commission it. As poorly executed and beta quality as it may be, this is a huge undertaking for Microsoft with almost unimaginable complexity..

… for the company that big to embrace it that quickly and move in such a different direction is nothing short of amazing. Congratulations to the Microsoft management on that one.

But then he fell back to the same ol’ Microsoft deception:

The leader in the commercial software + services space is Microsoft. We are not #1 in consumer software + services, we are strong third.

The strong third really made me laugh, I was expecting the “I’m a Mac” to jump out and join in on the dilusion of market dominance.

In case you’re wondering what “strong third” means take a look at the April search dominance Microsoft has - at 9.1% and declining!

What Kevin Turner knows, but is not discussing for obvious reasons, is that the consumer choices drive business direction. What you use at home tends to be what you want to use at work.

Why Vista?

“It is more secure today than Leopard, Linux, … and fewer patching means less cost” goes back to the message that Microsoft has been emploring it’s partners this week to do for Microsoft - please help us smash the myth that Vista is not great:

“We want to help find a way to help you evangelize and deploy Vista” begging for someone else to address it and not abandon it: “Any investment you make on Windows Vista will serve you well when the next Windows comes out” so please “Give the facts a megaphone and drive deployment!”

This makes me scratch my head a little and I just don’t get it.

Who does Kevin Turner think is his enemy here? People that don’t want Vista?

Last time I checked, customers have never heard of Vista - they only know Windows. People rejecting Vista? IT consultants, IT departments, CIOs and enterprise customers. The very stronghold of Microsoft’s evangelical choir, which is responsible for the actual deployments. Don’t look at partners, look at your advertising budget.

He even took a moment to take a shot at Oracle and imply they are in financial trouble.

Few unfounded swipes at Linux.. nothing new there.

He also took a swipe at Google: “You have to wonder about a company that has to remind itself of their slogal ‘do no evil’” and they have no partner ecosystem. Well, guess what, at 6% a month Kevin - neither does Microsoft. Not a complaint, OwnWebNow and my entire team thank you for that.

Finally, he went on to talk about how Microsoft (an expensive product by all accounts) can grow in a tough economy. For a COO he sure has to be aware of the term called “budget” and it being the key for why people are moving to cheaper or alternative solutions. To sum it up, here is what Microsoft wants from it’s partners:

Classy keynote all the way - but boy, what a giant, giant miss.

Watching the keynote with Allison Watson, very interesting. In a sharp contrast to yesterday’s direct pitch for Microsoft Online and handing your clients over for a 6% monthly commission, today the message is that Software + Service is actually a partner opportunity to use Microsoft technologies to power the Web 2.0-ish applications and designing them on top of the Microsoft platform.

Very, very silent on the “Just move your clients to our Data Center” pitch. They even brought up a few partners in the hosting space.

“You shouldn’t be a part of someone elses agenda, you should set the agenda.”

Things change overnight, don’t they?