Channel Truths About Vista, Office 2007 And SharePoint Server

It's been a few months since Microsoft Vista and Office 2007 hit the market, and the fanfare has quieted somewhat. With the hoopla behind them, solution providers are getting down to business and figuring out what their customers are looking for and what opportunities the new products provide. Their thinking so far: Office 2007 is in great demand, and SharePoint Server, in particular, is driving new development and integration projects for Microsoft channel partners. But solution providers say their customers are in no hurry to upgrade desktop systems to Vista--and resellers aren't inclined to push them.

Microsoft has said for some time that every $1 spent for Vista licenses will generate $18 in revenue for channel partners, for a total of $70 billion this year--a figure Robert Deshaies, vice president of Microsoft's U.S. Partner Group, recently repeated at CMP Technology's XChange Solution Provider conference in San Diego. But Vista hasn't started ringing the cash registers yet.

"We're not seeing any demand for Vista at all," says J.R. Guthrie, president of Advantage Computers, a Tucson, Ariz.-based solution provider. Sure, he gets the occasional customer inquiry about Vista. "I talk them out of it. It's not ready," he says.

Vista has its shortcomings, including missing drivers for printers and other peripheral devices from some manufacturers and a lack of application support from independent software vendors.

"It doesn't work well for everybody yet," notes Bryan Sensintaffar, vice president at PC ComputerSoftware, a Tulsa, Okla.-based solution provider.

Last month, for example, Adobe disclosed that it wouldn't issue updates to current versions of its Dreamweaver, InDesign and Photoshop applications to support Vista. Customers will have to wait until new versions of those digital publishing products debut later this spring or in the summer. The company plans to issue a free update to Adobe Acrobat 8 to support Vista by midyear.

VARs say a number of critical antivirus products and VoIP technologies don't work with Vista yet either. Several report that ConnectWise, a professional services automation tool widely used by solution providers to run their own businesses, also doesn't support Vista. (ConnectWise says its Spring 2007 release will support Vista.) One solution provider executive tried to load Vista on his Toshiba laptop and found it didn't support his wireless Internet connectivity apps.

"I don't think there are enough applications out there that are truly ported to Vista to really take advantage of it," says Ken Winell, senior vice president at Pcubed, a New York-based project management services and solutions company. He adds that some 64-bit applications that do run on Vista must do so in 32-bit emulation mode.

NEXT: Vista's real problem, from the perspective of solution providers.

But the real problem with Vista, solution providers say, is that there's no real value proposition for convincing customers to upgrade.

"I have absolutely zero business case. There's just no reason for it right now," says Sean Fullerton, CEO of solution provider EMonarch in Tulsa, Okla. He notes that Windows XP, the operating system Vista is replacing, works perfectly well for his customers.

Microsoft often points to Vista's enhanced security capabilities as a major selling point.

That strikes a chord with Bill Cunningham, managing partner of SystemSource, a Bloomer, Wis.-based solution provider that's deployed Vista on some early-adopter customers' desktops. He says security is "of primary value" compared to what he calls Vista's other "whiz-bang features." But EMonarch's Fullerton says new features in Vista and Office 2007, such as security, are geared more for IT rather than business owners and the VARs they hire to solve business problems.

Solution providers generally aren't beating up on Vista, however. Sensintaffar says it's probably the best first version of an OS product Microsoft has ever delivered. And they're quick to point out that lagging support from third-party vendors isn't Microsoft's fault.

Microsoft, for its part, has followed through on its promise to provide tools that make it easier for channel partners to work with Vista. In February, the vendor debuted new and updated Infrastructure Assessment Framework software and best practices VARs use to prepare for sales calls with Vista, Small Business Server 2003 R2 and Office 2007.

Evolve Technologies, a Fairfax, Va.-based solution provider, uses the Infrastructure Assessment Framework and Small Business Technology Assessment toolkits.

"They help us understand what's going on in the [customer's] environment and make informed recommendations to the customer," says CEO Dave Sobel.

Microsoft also released a handful of new tools for deploying Vista, including Windows Vista Hardware Assessment 1.0, Microsoft Volume Activation 2.0 and Solution Accelerator for Business Desktop Deployment 2007. Ronnie Parisella, CTO of New York-based solution provider Primary Support, uses Microsoft's Windows Experience Index to measure how well customers' PCs can run Vista.

Resellers expect Vista demand to pick up later this year and early next year, driven by their PC hardware upgrade cycles and by the release of the first Vista service pack. That's in line with estimates from Gartner and other market-research firms that predict most businesses will begin production deployment of Vista in the fourth quarter with larger companies not really starting until the second quarter of 2008.

It's not surprising that hardware upgrades will be the biggest driver of Vista adoption. Vista runs best on 64-bit systems, says David White, vice president of client strategy and enablement at Madison, Wis.-based IT consultant Beacon Technologies. And only 5 percent of Beacon's customers' PCs are currently 64-bit, he says.

"We believe you never want to run new software with old hardware," Primary Support's Parisella says.

Another reason businesses aren't implementing Vista in big numbers: Unlike earlier generations of Windows, where upgrading a few desktops caused network disruption, Vista, ironically, appears to be "playing well" within networks of XP-based desktops, says Matt Scherocman, consulting services vice president at PCMS IT Advisor Group in Cincinnati. That makes it easier to upgrade PCs over time instead of all at once.

Several solution providers say Vista adoption may get a boost from the fact that many customers are entitled to Vista because they pay for Software Assurance maintenance under the Open Value licensing program. Parisella estimates that 30 percent to 40 percent of Primary Support's customers are under Open Value licensing for their desktop systems. Evolve Technology's Sobel says some of his customers under Software Assurance are planning Vista implementations in the April to May time frame. "They're the first ones out of the gate," he says.

NEXT: What is generating buzz for solution providers.

While things may be relatively quiet on the Vista front, solution providers say Office 2007, and especially Microsoft Office SharePoint Server 2007, are generating buzz among their customers along with business opportunities for them.

With this new release, SharePoint Server has evolved into Microsoft's back-end integration technology for portal, collaboration, workflow, Web-content management and document-management applications. That's creating systems integration and development opportunities for solution providers.

"SharePoint, in my opinion, is the reason to buy Office 2007," says Scherocman, noting that the new product and the integration and collaboration application development projects it has generated already account for about 15 percent of his services business. He's also using SharePoint himself for managing paperwork for submitting quotes to customers.

Customer interest in SharePoint Server is reaching "a critical mass," agrees SystemSource's Cunningham. He foresees opportunities for developing workflow applications and software that automate his customers' business processes. But he hasn't dived into serious development work with SharePoint just yet.

BearingPoint is finding a lot of work building enterprise content-management systems for financial service and pharmaceutical customers using SharePoint and Office 2007 desktop apps, says Jens Rassloff, who manages the relationship between Microsoft and the systems integrator's Europe, Middle East and Africa organization. Some customers are adopting SharePoint as an alternative to more complex content-management applications like EMC's Documentum and IBM's FileNet systems, he says. "It's definitely a market-changing product." Vista's embedded search capabilities also tie very well into SharePoint, he says.

One customer was thrilled to find that he was able to eliminate two data-entry positions after Solbrekk Business Technology Solutions, Golden Valley, Minn., implemented SharePoint, says senior account executive Joann Evans, who just finished a SharePoint portal project for a company that prints credit cards and has other SharePoint projects under way.

Solutions Consulting Group, a San Diego-based solutions developer, is using SharePoint to build business intelligence and "business scorecard" performance management applications for clients. In the development pipeline, for example, is a SharePoint-based system to monitor business processes at a company that handles athlete registrations for marathons and triathlons. SCG is also working on a system for a health-care benefits management company that will tie a SharePoint portal into a Microsoft Dynamics CRM application, allowing employees to access only the parts of the application they need.

The demand for SharePoint expertise, in fact, is straining some resellers. "My SharePoint resources are overscheduled," Scherocman says. Working with SharePoint frequently requires staff with both IT and business skills. Developing a SharePoint-based human-resources management workflow system, for example, takes technical knowledge and experience with HR business rules. "It's finding people with business expertise that's tough," Scherocman says.

Because consultants with Office 2007 and SharePoint Server 2007 skills are in short supply, day rates that solution providers and systems integrators charge customers for consulting staff with such expertise have been increasing, Rassloff says.

Sales cycles for SharePoint Server projects are also longer given that they involve more than basic installation services and often require sign-off from multiple managers at a customer site.

NEXT: A fly in the SharePoint ointment.

One hang-up for resellers working with small businesses is that the new release of Microsoft Small Business Server (code-named "Cougar") won't be available until after the Longhorn version of Windows Server makes its debut later this year. (Small Business Server bundles SharePoint Services, as well as Windows, Exchange and SQL servers into one package for small businesses.) One reseller says that will limit SharePoint business opportunities to larger customers that use SharePoint independent of Small Business Server.

Solution providers say there's a lot of pent-up demand for Office 2007. And integrating those client applications with back-end business processes and workflow systems is a way solution providers can offer customers a lot of value beyond just implementing the Office suite. "I have to do things that make us different," Fullerton says, adding that such integration projects can be done without building a lot of code. Fullerton, for example, sees "compelling" opportunities to link SharePoint with Microsoft Office InfoPath, the office suite's software for developing XML-based data-entry forms and viewing XML documents.

Since November, Pcubed, which concentrates on project management work, has undertaken 10 implementation jobs involving Microsoft Office Project 2007 and four or five for SharePoint. Winell says the availability of Office 2007 has increased his Office-related business by around 20 percent over last year.

Pcubed is also developing dashboards for SharePoint Server and Project 2007 that provide businesses with performance metrics and project status information, respectively. "We're also seeing a lot of interest in the pharmaceutical space [for Project 2007]," Winell says.

Solbrekk's Evans says she's holding back on recommending Exchange Server 2007 for her clients, however, because there aren't enough applications ported to it yet. Fullerton notes that the new Exchange release runs only on 64-bit hardware. "That's not going to be a fun sell," he says.

Solution providers say the new look and feel of the Office 2007 applications initially throws customers off. One reseller says it took him 10 minutes to figure out how to print something the first time he used it.

"Users despise Office 2007 for two days," Sobel says. "Then the light bulb goes on as they begin to see the advantages of its new design." He says the suite's "Live Preview" feature, which lets users preview changes to documents, is a big selling point.

Is it all too much at once? Microsoft, after all, has deluged the channel with new products. Sobel says it can be too much for a solution provider to work with and resellers have to focus their energy on the technologies they work with best. But he adds that such en masse product releases generate lots of client interest.

Fullerton actually prefers it that way. It's easier to work with--and sell--products that are released together, he says. "I hate it when they string them out over a year."

NEXT: Are solution providers beating up on Vista?

Windows XP: This Operating System Isn't Dead Yet

Windows XP may be an orphan now that Vista has made its debut. But the desktop OS is still a reliable standby for solution providers and their customers until Vista becomes mainstream.

"I think the number of people who are going to rip XP off their desktops and replace it with Vista right away is pretty small," says Matt Scherocman, consulting services vice president with PCMS IT Advisor Group.

Some clients that are running Windows 2000 and need new desktop hardware are insisting that the PCs run Windows XP Pro, says J.R. Guthrie, president of Advantage Computers in Tucson, Ariz. Guthrie says PCs with XP are capable of running the new Office 2007 suite of applications.

In late February, a client of Solbrekk Business Technology Solutions bought seven PCs as part of a $50,000 project and decided to try Vista on one of the machines. Three hours into the job, he decided there were too many compatibility issues with the company's antivirus software and a third-party logistics application. So Joann Evans, Solbrekk senior account executive, opted to use XP. But after several frustrating hours trying to reach people at an OEM distributor and then Microsoft to obtain a downgrade license, she gave up and purchased a new XP Pro license for her client--with her own money.

"I can't tell you how many times I got hung up on," she says.