CONVERGENCE - Ballmer outlines Microsoft's enterprise ambitions

Microsoft CEO, Steve Ballmer, used his opening keynote at Microsoft's Convergence user conference to not only preview a number of updates to the company's Dynamics line of business software, but also to make a firm declaration of the software giant's enterprise market plans.

"I still get asked, is Microsoft a serious player in business applications? ... This is mission-critical for us," Ballmer asserted. "The biggest decision I made -- unless we close this Yahoo deal -- was pushing into the business applications area," he said at another point. He revealed no new details of Microsoft's ongoing attempt to buy the Web-based search and content company.

Ballmer also claimed that Microsoft is now the "leading provider of enterprise software" in terms of "total dollar volume."

But the bulk of his presentation was a look at Microsoft's product strategy for Dynamics and its broader push around "software-plus-services" -- its bid to extend its core client applications business with hooks into the Web.

IT is grouped into several categories, Ballmer said: The desktop, the Web, servers and devices. "The future of computing is to bring together these four models," he said. "In Dynamics, we are trying to move to embrace that right away."

One key new product, Microsoft's Dynamics AX 2009, is set for release in the first half of this year.

New features include an integration with Microsoft's unified communications platform; a "one-stop shop" for data related to compliance issues; an integrated workflow framework; and broader localization and globalization capabilities, such as support for multiple languages and time zones.

Marketing materials for the new Dynamics software make much of its so-called "desirability" features. According to Microsoft, the Dynamics user experience team worked with students at the IT University of Copenhagen on "desirability studies" and created a "Feel IT" methodology.

The end result is that AX 2009 features a set of more than 30 "role centres," application views tailored for different types of workers.

Microsoft is also trying to solicit user input through a portal called Microsoft Connect. The site gathers feedback and users can also vote on proposed features, according to a news release.

In addition, the audience got a peek at Microsoft's on-demand offering, Dynamics CRM Live, which is set for release in the third quarter.

Five hundred customers have been testing it in recent months, according to Ballmer.

A demo showed off hooks into the Office suite, and also how users can plug in outside data services such as maps from Virtual Earth into the application. In addition, the software will have a declarative workflow toolset for designing new business processes, according to Microsoft.

In addition, a number of online services for extending Microsoft's existing CRM (customer relationship management) and ERP (enterprise resource planning) applications are available. They include a payment service using technology from Chasepaymentech Solutions and PayPal; an integration with eBay; and a search engine-keyword marketing service.

Microsoft also announced a set of tools and services aimed at migrating companies that have "outgrown" QuickBooks over to Dynamics GP.

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Even as it rolls out new features, Ballmer insisted that Microsoft will continue developing its entire range of Dynamics software.

"I get asked many times by customers and partners, are you committed to this strong lineup? Yes. We have a long-term view for each one of these products," he said. While customers can expect newer features to find their way into all the software, the specific attributes each one has "will all continue to be enhanced well, well, well into the future," he added.

He described Oracle as primarily a competitor and SAP as a partner and competitor.

As for IBM, Ballmer said that "none of their actual software product lines are today that strong. ... They're really more of an enterprise services player that just doesn't really love our software that much."

While a large enterprise might have an SAP or Oracle implementation as its backbone, there are "divisions or processes frankly where it is just simpler and easier to take Dynamics AX or one of our other ERP systems and customize and tailor it for a specific process."

Microsoft is using Dynamics AX for the Xbox game console's supply chain and manufacturing infrastructure, and is in the process of moving many workers over to Dynamics CRM, according to Ballmer.

But the company needs outside customers to fulfill its plans. To that end, it announced Wednesday that it is expanding its partnership with systems integrator EDS, hoping to sell more Dynamics CRM to midmarket and large enterprises.

Ron Rittenmeyer, CEO of EDS, claimed his business manages "more Microsoft software than any other company in the world" -- some 3 million desktops and 100,000 servers.

"We see the entire Dynamics thing as definitely an enterprise-grade solution. It's matured," he said.

EDS will initially roll out the services in North America and Western Europe, he added.