Microsoft Convergence - Some Right Stuff - Wrong Convergence

There are 9500 souls wandering around the Orlando Convention Center (not as I write this since its 4:00am and I can't sleep but during the day) - all attending Microsoft Convergence 2008. I have to assume most of them are good souls. They are also Microsoft fanboys (and girls), willing to drink Microsoft kool aid - which tastes pretty good much of the time (yes, Apple isn't the only company with fanboys (and girls)) - and which absorbs Microsoft messages - especially at Convergence - with nary a peep of concern or protest, because they make a good living either using or selling Microsoft enterprise applications - at Convergence 2008 - in particular - ERP related (like Dynamics AX 2009, GP10, etc.) or CRM (Dynamics CRM on premise or Live 4.0). But, that isn't the reason I'm losing sleep. I'm not sleeping here because a. the bed at the Peabody, an otherwise totally lovely hotel, is too hard and b. the messaging that Microsoft is throwing out to the crowd is really a mixed bag. It's not wrong - but it's not what I'd be doing up against SAP and Oracle, salesforce and Sage. Let me take you back 24 hours or less to Steve Ballmer's keynote......

What Preceded The Keynote

Except for one unique and genuinely interesting "opening act", all that preceded Senor Steve was pretty much standard industry conference junk. I still wonder why some 30 years plus after the movie came out, that every industry conference or product launch I go to thinks that doing something themed on Star Wars is really "cool" or "hip" or.... I'm tired of seeing cartoons, actors and plastic puppet figurines that look like Yoda, Chewie, Darth Vader, Luke Skywalker and R2D2 in non-stop "war between the dark side and whatever it is that we're pushing at the event" with of course, the forces of the event winning every time. I swear, that if they do it one more time - any of 'em - I'm going to take my lightsword and...... But right before Ballmer went on, they did something that on the surface of it might have violated the laws of political correctness but was actually a genuinely astounding thing (while trying to sleep, I came up with a much cleverer turn of phrase than this but lost the thought by the time I go to my laptop to write it). It started with five stunningly gorgeous/hot women in rather skimpy outfits - all white ones (the outfits, that is). I'd say P.C. violation here, except that they then proceeded to do a really rather awe-inspiring Cirque du Soleil like ballet rising into the air and doing those twists and combinations and swirling aerial stunts/dances that amaze you at the athleticism and the occasional flirtation with aesthetic beauty (not hotness) that you see at times. It was genuinely terrific - and did I tell you the women were incredibly good looking? Good start. Ballmer - up next

Steve Ballmer - Always Enjoyable, Not Entirely On Point (At Least MY Point)

Steve Ballmer, as those of you who have seen him speak (which might be 28% of the entire planet), is an entertaining, well orchestrated histrionic speaker. He knows exactly what he's doing, with cadences measured to the size and nature of his crowd and with gestures and questions which seem spontaneous - but as a pretty decent speaker myself (if I do say so myself - and I do), I know they ain't. But he always has a message for the crowd he speaks with. I was on a stage with him about 3 years ago for two speeches in one day - just two speakers - him, then me - tough act to follow - and one of the crowds was 250 small business people and the other 300 association people (in the opposite order actually). I'd like to think they were there to see me but....don't think they were. In any case, he had a clear message for both crowd and for each crowd. Same message, different metaphor and different cadences. For the sake of brevity, just take my word for that. It was masterful. While masterful in delivery and cadence at the Convergence 9500-strong keynote (with folks from 65 countries consisting of customers, partners, prospects and press/analysts), his message was not wrong, but it was wrong. It was a message that you could get away with, but wasn't visionary and wasn't something the CEO of a company that was competing with Oracle, SAP etc. should have said. The missing parts of the messages were loudly absent from the keynote and from pretty much the entirety of the conference so far (still have something of another day to go) - though there were signs that it wasn't being ignored in Microsoft backrooms or in their labs.

The Fundamentals

One of Steve Ballmer's core points was outlined during what he called a "history of PC computing" not really an apt name for what followed. He spoke to 4 pillars in the history. The first three were

1. Personal productivity - characterized by usability (well represented in a discussion at a later press event with Jakob Nielsen, web design guru now Microsoft lab leader in Copenhagen), mobility (which he tied to Windows Mobile only - a big mistake) and portals (which of course was Sharepoint - good product, up against serious competition because much of its feature set is getting a bit dated).
2. Analysis and teamwork - tied somewhat seemingly randomly but not entirely without merit - to workflow, search and business intelligence. Though nothing about collaboration really
and
3. Application platforms - tied to scalability, integration and simplicity - a genuinely great choice here - and he made the point that to that end, there was going to be a release of a product called Windows Server Essentials to simplify (not strip down, thenks got) installations of Windows server apps for small and medium enterprises.

All in all, so far, not bad. But what came next was the most telling part of the entire speech.

The 4th Pillar - White Spaces, Missing Places

He saw the greatest future opportunity as falling between personal productivity and applications platforms - the white space in between the two - a kind of strategy that leading superstar analyst Denis Pombriant (also in attendance) points out is a 15 year old Microsoft strategy. And there is nothing wrong with what he said per se. As I pointed out in a blog entry in a universe a far far away and a long time ago (OH NOOOOOOOOOO!), Microsoft builds out ecosystems, not channels and they fill in white spaces with partners who have expertise. So there is nothing wrong with saying or doing that. Except....except, except, except, they are competing with Oracle, SAP and salesforce.com.

A Brief Subplot Before the Main Event....

And, given those institutions recent moves - especially in CRM and soon their enterprise applications - that changes the game. First, two other points about Ballmer's keynote that are relevant to what I'm going to say - he identified the competitive sweet spots for them as small and mid-market ERP and all size ranges for CRM. He even talked about what he called XRM - extended CRM - which he said was "helping to manage relationships in all forms" - though the only "forms" he identified were government to citizen and politician to constituent. That statement has two problems and one irony. The biggest of the problems is that CRM is no longer about managing relationships as much as it's about engaging customers. The second problem is that he limited the extension to public sector examples - which is far too limiting a way to talk about extending it - though in his defense it came from a discussion around the use of Dynamics CRM by British local governments so that was top of mind I presume. The irony is that in its very early days, CRM was called XRP - extended ERP and was as narrowly defined in its extension as Steve B. did with XRM. He had a great chance to really do some on point messaging here but failed to and that leads me to what that on point messaging should be.

....Now the Main Event

In the last few months, Oracle, SAP and salesforce. have been putting forward versions of their applications and supportive messaging around, not finding white space in existing enterprise frameworks, but creating whole new unified collaborative frameworks that enable all the improvements in customer-corporate interactions and corporate to corporate interactions. Their messages are not those of extension of the traditional operational and singular but integration of the operational and collaborative. Not the management of relationships but the engagement of customers and employees. THe message is one of a very productive, high return future with new models - in other words, visionary. Each of them is backing it up in a different way. Oracle announced some extraordinarily productive tools based on Web 2.0 (and CRM 2.0) technologies for their Oracle Siebel CRM on Demand version 15 as I outlined in my March 11 blog post; SAP last fall announced a major revamp of their SAP CRM 2007 by making it highly personally configurable and interoperable and device centric. Salesforce has been utilizing it's partner ecosystem to integrate social capabilities with its basic platform and, at Dreamforce 2007 released a highly configurable user experience based toolset for their platform called Visualforce. Ad infinitum. In other words, they are not saying, let's squeeze new areas out of the "inbetweenness" of traditional frameworks, but lets move forward by creating new frameworks that don't ignore the old operational requirements for all businesses but recognize the ascendancy of the customer, recognize the incorporation of consumer thinking in the enterprise, recognize the integration between personal and business and provide the business tools to meet the need of the 21st century business. Exciting and practical, customer focused. Not practical and customer-centric corporate focus. THESE ARE THE COMPANIES THAT ARE COMPETING WITH MICROSOFT!!! The irony here revolves around two things:

1. Microsoft has a huge opportunity, because Dynamics CRM 4.0 is not only their first truly excellent product that can compete and win and grab market share if done right
but
2. Microsoft is clearly aware of the issues that I'm talking about and working on it in multiple ways (aside from their Live offering).

Its just that no one made those points all that clear. Let's look at the last first. Two things were said during the day that made it clear that Microsoft labs knows all about the way that the customer universe has changed. During the SB presentation, they did a short demo of the Call Center of the Future. While the dialog was so cheesy, even the fans in the crowd were laughing at it (it was of the variety of "oh thank you call center using Microsoft products for not only being able to truly understand me but also to make the changes that I need on time and on budget."), the content was anything but that. It showed that Microsoft was well aware of customer needs and how much they've changed. For example, they identified a presence-based engine that sought and found the first available agent at the call center and then made sure that agent had all the updated customer information at the ready - improving by a long shot the speed of answering the call and the effectiveness of its result. The key to the customer information was that it maintained its context so records didn't have to be re-pulled and questions re-asked. So it's clear Microsoft understood engagement from the standpoint of both presence and context - two of the important social characteristics that were necessary to satisfy contemporary customer requirements for engagement. Second, in a press event that was held a bit later on the Microsoft User Experience, the aforementioned web user focused design guru Jakob Nielsen made the strong point that their labs were not just studying and designing according to the standard design foci of usability and utility, but they are adding desirability as a design feature - which goes to the heart of personalization and the contemporary customer. All in all, a terrific move, especially as the younger & younger generations of new employees enter the workforce and are NOT enamored of Outlook because they grew up on the web-based free services like GMail, AOL and Yahoo (Microsoft NEEDS to get Yahoo) which have a completely different user experience - look and feel that will replace the standard regime of Outlook comfort as a focus.

In Sum.....

I think that Microsoft has an extraordinary opportunity to grab some market share and even, with some fortuitous breaks lead the market. But right now, I'm not feeling the Microsoft Love (they talked about this) that I need to feel others are feeling. They are not talking about building new frameworks for their ecosystem - just sending the message that they are extending the old one - and that old one is based on a corporate framework/ecosystem that is long broken and now being replaced by one dominated by the customer. They can get by with that message and even do pretty well with it but this is a company used to leading. That said, being a fan (but NOT a fanboy) of this company for a long time and seeing their first truly good CRM product emerge, they have a chance to make a midcourse visionary messaging correction that they need to make. Otherwise, Oracle, SAP and salesforce in particular, and, in a different way, Google, will begin to make them less relevant - though NEVER irrelevant - than they are now - and that, for them, wouldn't be a good thing.

Some Miscellany

• Microsoft needs to make itself "device friendly", not "Windows Mobile device friendly." They have Exchange. If they show interoperability with the Blackberry OS and other mobile OSes, by providing native Exchange compatibility then they are being smart. The Blackberry partners who provide that hosted service are doing great with it. Staying Windows Mobile OS only, not that smart and missing lots of opportunity. There are signs they are loosening up with, as Kevin Schofield of Microsoft pointed out to me last night, the announcement of iPhone Exchange compatibility, but until they are compatible with Blackberries natively, they ain't there yet.
• In the Q&A Steve B. was asked about the differences between Microsoft Dynamics CRM 4.0 and salesforce.com. He mentioned one of them as "unparalleled" simplicity of customization by comparison with salesforce.com. Given the level that salesforce.com has gone to provide strong customization and configuration tools like Visualforce, I'm not sure that he can sustain that claim, but I haven't seen the customization tools. To that end, I'm going to put Microsoft and salesforce.com feet to the fire. In the next week or so, I'm going to contact both companies and see if they are willing to do a bakeoff. The idea would be to customize the same exact set of things under the same (or as close to the same as possible) set of circumstances. I don't have the criteria yet but I'd like to see who's customization is simpler (since that is the primary basis for Steve B's claim) and easier for the non-technical user. If the two companies are too afraid, I'll contact the partners for each and if they are too nervous I'll find independents who can and who use the tools. Stay tuned on this one. It will be real soon.

Comments

[Paul Greenberg]

Hi Matt,
Thanks for the kudos. I'm sending off the emails on the shoot-out (I like the more macho term in this case) to the folks at both today and will follow up with a call very soon. If they don't bite, aside from their public shame, I'll be talking to you about it I'm sure. I'm going to announce my intent my Experience on the Edge podcast (which will be up Thursday) at MyCRMCareer.com.

[Matt Wittemann]

Great synopsis and analysis. I am a Microsoft CRM MVP, but I wasn't able to make it to Convergence this year. Thanks for the recap. My company partners with both Salesforce.com and Microsoft for CRM and we've been thinking about doing a bakeoff of our own. We've had a lot of traction with MS CRM 4.0, but, as you pointed out, the younger generation is not tied to the Outlook paradigm the way the more traditional business crowd is. If you don't get anywhere with Microsoft and SFDC directly, looks us up - we'd love to participate in the bakeoff!
-Matt Wittemann
VP Director of CRM Practice, Customer Connect

[Ted Hartley]

This is a truly outstanding post. I too would love to see the sfdc/MS bakeoff.

[PaulSweeney]

Great post. Like that "inbetween-ness", and "outwardness" as differentiators.