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The Server and Tools Business (STB) at Microsoft is one of the most productive divisions which contributed close to $13 bn to Microsofts revenues last year. Driving this growth for the last many years is Bob Muglia who was recently elevated as president of STB. He is also instrumental in delivering Dynamic IT, an initiative by Microsoft to help IT developers create optimized, flexible and scalable infrastructure that are well-tuned with business requirements for enterprises.

The STB portfolio includes Windows Server, SQL Server, Visual Studio, Virtualization products, System Center management products and the Forefront line of business security products, among others. Bob Muglia was recently in India to launch the companys low cost server computing solution called Foundation Server 2008. Interestingly, Microsoft has come out with a low cost server offering and is aggressively targeting the emerging geographies; consequently, it is also taking on the open source vendors with a low cost offering for the first time. In an interview with Dataquest, Bob Muglia speaks about the new product, the open source hype and the way forward for STB. Excerpts

What is the Foundation Server?
Its a low cost server platform that brings significant value to small businesses which till now could not afford such an enterprise class product. It is targeted at customers who are cost conscious and want more RoI given the current economic conditions. We have made the Foundation Server easy and simple and at the same time highly functional. For instance, its built for businesses with 15 or less users. What this means is that small businesses can leverage the host of features that will enable them to run a range of solutions like business apps, databases, file, print sharing and remote access. We have tied up with Dell and HP which will be offering the Foundation Server. We are pretty bullish that it will change the way IT is being used in small enterprises and will empower them with enterprise class solutions leading to richer user experience and higher productivity.

Typically, when you look at Indian SMBs they are not that IT savvy. Given this, how big a challenge is it to sell the foundation server to them?
It is a challenge. But with the partner eco-system and the cost advantages, Foundation Server delivers a powerful product which is a clear selling point. Moreover, we are undertaking a lot of education programs that will drive this value propositionone is the rich business functionality that users will derive, and two, the kind of RoI they get due to the lower costs and high functional product.

The current economic climate has created a perception that open source is cost effective, what is your take on that?
Firstly, I would like to drive home the point that open source solutions are not free. Its a myth. Customers of open source end up paying for the subscription and licensing fee which makes it not a low cost solution. The second most important thing is functionality. The current competitive scenario increasingly demands customers to leverage IT in innovative ways leading to overall cost reduction and increase in productivity. We are actually gaining share from Linux as customers realize the value of the Windows-based IT infrastructure. For instance, a Windows-based ecosystem makes for a seamless delivery of critical enterprise enablers like database management, networking, virtualization, HPC and web workflow make for compelling value that open source cannot provide.

If you take the Foundation Server 2008, it will empower the SMBs with server based software that gives them the functionality to offer such services like integrated email, simplified IT and virtualization among others at a very less cost. Moreover, as they grow they can upgrade to other solutions in the STB portfolio also. In a nutshell, its an extremely agile solution that makes SMBs align their business goals with IT effectively with no loose ends.

MSIDC has contributed heavily to MS Products. What is its role in terms of adding value to STB products portfolio?
MSIDC significantly contributes to the STB portfolio. For instance, it has done significant work for the upcoming Windows Server 2008 R2 and has contributed heavily to the presentation virtualization features. Each of STB products derives significant value from MSIDC.

Microsoft is pitching hard on the cost advantages. Can you talk about the RoI in terms of competing products, say SQL and Oracle?
Oracle is quite expensive compared to SQL: we are five times lesser the cost as compared to Oracle. We have seen cases like a leading Oracle user going in for SQL which demonstrates the cost advantages we are talking about. Moreover, yet another great optimizer which leads to greater RoI are our state of the art virtualization features that make for creating simple and agile IT. When we stack each of the products in the STB portfolio with competition, including open source, our products offer greater value in terms of TCO as well as RoI.

Given the overall gloom in IT spending and the slowdown in the economy, whats the strategy that STB has put in place?
Our core strategy remains unchanged. We deliver what the customer wants. We are creating a cohesive strategy so that all our earlier versions can perfectly co-exist with new versions. We are poised to deliver high functional products with great emphasis on cost effectiveness. For instance, if you look at the Windows Server 2008 R2, we have tweaked the functionality significantly. It will support large systems with multiple processors, huge data warehousing capabilities, more manageability and greater virtualization capabilities. All this is the result of the feedback from our customers, who drive us to come with products that bring significant value. Emerging markets are certainly a very big opportunity for us. We are already seeing huge traction in markets like India for our server offerings, and we see that India and China are huge growth markets. Our approach is extremely customer centric and this is the key to STB delivering such great products.

Can you share some of the major product updates on the anvil from STB going forward?The Windows Server 2008 R2 is going to be a significant development. Features like Virtual Machine Manager that support live migration, are great features that will enable enterprises to gain greater control in managing their data. Next year we will scale out a version of our data warehousing for SQL, and a new edition of Visual Studio is also in the pipeline.

What is your outlook given the current economic conditions?
While there would be slight saturation in developed markets, the emerging markets will continue to grow. The need for IT is always there despite the slowdown and a challenging environment.. I think the only way to manage the business challenges in a down economy is to use technology to resolve customer issues. IT faces same set of basic challenges and the key differentiator is delivering cost effective functional and robust solutions.

Shrikanth G
shrikanthg@cybermedia.co.in

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