Microsoft and SAP Make Fresh Revelations

Analysis of News Events
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During the balmy summer months, many IT vendors prudently decide to hold off on releasing any announcements of great importance. Over the last couple of weeks, however, two industry giants could not restrain themselves from making big headlines. As it turns out, their announcements will have important implications for many System i professionals. Without further ado, let's examine what they had to say.

Microsoft Makes Waves at WPC

Among IT vendors, Microsoft is notorious for interrupting summer vacations with breaking news stories. That is because the vendor often reserves big announcements for its Worldwide Partner Conference (WPC) that it holds every July. True to form, the software giant used WPC last week to tell its partners that it plans to launch three strategic products in Los Angeles on February 27, 2008. The products are Windows Server 2008 (formerly known as "Longhorn"), SQL Server 2008 (previously called "Katmai"), and Visual Studio 2008 (formerly known as "Orcas"). The company also pledged to hold hundreds of marketing events around the world for the new products in the weeks after the announcement.

In addition, Microsoft kicked off an early-access program for its Dynamics Live CRM product. For those of you who don't follow the company regularly, Dynamics Live CRM is a Microsoft-hosted version of its customer relationship management (CRM) offering that uses the same code base as the on-premises and partner-hosted versions. Later this quarter, Microsoft will offer a pre-release version of Dynamics CRM Live Professional edition at no charge to companies that it accepts into the early-access program. In the first half of 2008, the product will become generally available at a cost of $44 per user for the Professional edition and $59 per user for an Enterprise edition that offers offline synchronization. Companies that are interested in taking part in the early access program can visit to learn more and apply.

Microsoft also used WPC to address partner fears that it will muscle them aside by selling Dynamics CRM Live and other hosted solutions directly to their customers. For starters, the company announced that it will pay partners 10 percent of subscription revenues paid by their customers of record for any "Live" services. Microsoft also stressed that it is not charting a course toward a pure Software as a Service (SaaS) model of delivering its products. Instead, it envisions a "software plus services" model in which on-premises, partner-hosted, and Microsoft-hosted products work together seamlessly. In this model, partners will help customers choose what mix of the three offering types works best for them and provide consulting, customization, and training services for all types.

While Microsoft still has plenty of details to thrash out in its software plus services strategy, it is putting itself in a good position to capture a sizable chunk of the hosted CRM market next year. While customers of and other hosted CRM providers will not jump ship for Dynamics CRM Live, it is highly likely that many prospective customers of these vendors will opt for Microsoft. In addition, numerous companies that are considering on-premises CRM products may switch over to Microsoft's hosted alternative. Indeed, many System i professionals may find their companies' Windows server administrators touting Dynamics CRM Live in meetings with line-of-business managers. That said, let me close with a word to the wise: If you have a stake in a CRM solution besides Microsoft, you owe it to yourself to learn about Dynamics CRM Live so that you can hold your own in those meetings.

SAP Confesses to Oracle Theft...Sort Of

Several days before Microsoft's shindig, SAP grabbed the spotlight by admitting that its TomorrowNow subsidiary did conduct some "inappropriate downloads" of documents that are proprietary to Oracle. As you may remember from my previous article on this story, Oracle has filed a lawsuit against SAP that accuses TomorrowNow of stealing thousands of proprietary documents and software code from the Oracle Customer Connection Web site.

On July 3, SAP filed a legal response to the suit that admitted to some unwarranted downloads on the part of its subsidiary. At the same time, the company insisted that TomorrowNow has the right to download content from Oracle Customer Connection on behalf of its customers. In addition, SAP stated that all of the downloaded content stayed on TomorrowNow's systems and never found its way onto SAP's servers.

While SAP has admitted that some of Oracle's accusations are grounded in fact, the two parties are still miles apart when it comes to agreeing about what really happened. As such, the latest filing from SAP is probably just the first chapter in what will be a long series of legal maneuvers by both companies. As part of those maneuvers, Oracle will undoubtedly do everything it can to destroy TomorrowNow. That is because the SAP subsidiary plays a central role in the vendor's "Safe Passage" strategy to get Oracle customers to switch to SAP. For its part, SAP will strive to keep TomorrowNow viable so that it can continue the Safe Passage program. Given the stakes involved on both sides, the legal wrangling could go on for years.

By the way, you can learn more about the latest developments in the Oracle/SAP lawsuit on The JD Edwards Advisor, a new Web site from Andrews Consulting Group that covers a variety of JD Edwards and Oracle topics. Feel free to drop by to see what we're offering.

Coming Attractions

Every summer, I get out my crystal ball to make some predictions about what the economy in general and IT spending in particular will look like in the coming year. This year will be no exception. Unless some big story dispels the summer doldrums, look for my annual IT budget issue in early August. Until then, I hope you take the time to pour yourself a lemonade (or whatever your libation of choice may be), hit the hammock, and let the world drift by.

Lee Kroon is a Senior Industry Analyst for Andrews Consulting Group, a firm that helps mid-sized companies manage business transformation through technology. You can reach him at This email address is being protected from spambots. You need JavaScript enabled to view it..