News

Microsoft Exec Lays Out Enterprise Strategy at Barclays Event

• By Kurt Mackie
• 12/10/2008

Kelly, who is Microsoft's corporate vice president of infrastructure server marketing, gave the calculator-pushing crowd what they like -- numbers.

He first presented a diagram showing Windows Server 2008 as the base (or "socket") of Microsoft's server and tools strategy. More than 500,000 people are already trained to use Windows Server 2008, Kelly said. Next up the stack are security, virtualization and management solutions, SQL Server, and development tools, with services topping the heap.

When you add up that stack, it represents an $85 billion to $90 billion software market opportunity. Microsoft already holds $13.2 billion worth of that market, he said. When you add Microsoft's services strategy on top of that, the market moves from $90 billion to $400 billion plus, Kelly explained.

If those figures weren't enough to excite the number-crunching crowd, Kelly touted some of Microsoft's upcoming products, such as Windows Server 2008 R2, currently in beta release. Kelly said that when it is released as a product, Windows Server 2008 R2 "will increase CPU support by four times." He said that represents enough capacity to run the "largest workloads on the planet."

The R2 product is scheduled for release sometime in 2010, according to Microsoft's product roadmap. However, Microsoft demonstrated Windows Server R2 at its WinHEC event last month, where Microsoft Corporate Vice President of the Windows Server Division, Bill Laing, suggested it could appear in late 2009. The demo at WinHEC showed that the R2 server could scale up to handle 256 logical processors.

Kelly also confirmed that the Live Migration feature of Microsoft's Hyper-V hypervisor will ship with Windows Server 2008 R2. That feature, which allows IT administrators to transfer a running virtual machine to another physical server, initially had been killed off at the time of Hyper-V's product launch.

Another product aimed at boosting Microsoft's enterprise IT market share will be the version of Microsoft SQL Server that's code-named "Kilimanjaro," which Kelly said would appear sometime in the first half of 2010. Kilimanjaro is aimed at supporting the business intelligence needs of organizations.

He added that Microsoft plans to release "another version of SQL Server" that will address the data warehouse enterprise market within the "same time frame" as Kilimanjaro.

Finally, Microsoft plans to release an improved development environment with its Visual Studio 2010 product, which will feature lifecycle management capability for developers.

Kelly handled a number of audience questions, but always with a common theme. He stressed that the most important need enterprises have is a common management platform to handle operations. Microsoft management solutions fall under its System Center product portfolio.

Systems management is a bigger concern for IT than deploying virtualization solutions, he said. Desktop virtualization currently represents a "nascent" field with not a lot of deployment going on. Server virtualization will see greater growth, Kelly said, although research has shown that virtualization is currently used on less than 15 percent of servers sold.

Still, Microsoft can beat its competition in the virtualization space by offering its hypervisor at "one third the price of the competition," Kelly said.

Finally, an audience member questioned how Microsoft will cope in a "slower growth market." Kelly was bullish on Microsoft's prospects. He said that Microsoft will respond by "growing faster than the market." The company has an advantage with its volume-pricing approach, he said, adding that niche players are more likely to get hurt in slow-growth economy.

"We are very confident that even in a market like this, it plays to our strengths," Kelly said.

An audio transcript of Kelly's talk is available at the Microsoft Investor Relations Web page here.