How Microsoft Is Going to Own the Cloud

I had the opportunity to interview Microsoft's Vice President Jeff Teper today. He has been managing the development effort for SharePoint from when it was just a gleam in Bill's eye. And next week SharePoint 2010 is officially released. He graciously took the time for an interview with me today, and gave a really interesting picture of SharePoint, as well as some other subjects.

The conclusion I took away from this interview? That through Office & SharePoint, Microsoft has a very good shot at owning the cloud.

I opened by telling him that we had done a company-wide demo of SharePoint today and that the reaction was that people wanted us to upgrade today. Jeff's response was to ask "what did they react most positively to?" (This response shows that Jeff is truly a developer at heart.) I responded that what appeared to be the big improvements was the reduced number of clicks and how fast it now is.

So for my first question, I said that the expectations of everyone is that 2010 is going to be wonderful and if it's not, you're going to break our hearts. So I asked, are you going to break our hearts or is it going to be wonderful? His response was great - "SharePoint 2010 is going to be the best software product anybody's ever used, but it's not perfect." He then talked about the trade-offs that go into creating a software product, but that no one was telling them that they needed more features. He summed it up saying that in 6 months everyone will still be in love with SharePoint 2010. He then added that in 6 months people will still be discovering cool new features.

My $0.02: The fact that Jeff spoke directly to the fact that software is imperfect and feature lists are the result of trade-offs shows speaks well of his veracity. His answer that we will love it is to be expected from the proud father of the app, but I think in this case it's a fair conclusion based on the product.

My next question was: in 2014, when we're getting close to the release of SharePoint 2015, what will people see as the major changes 2010 brought to the table? Jeff's answer was that "we'll be amazed how many people moved to the cloud and how quickly it went." He went on to discuss about how a lot of people are talking about it, but the minority are doing it.

I followed up asking "Is SharePoint 2010 and Office Microsoft's nefarious plan to take over and own the cloud?" Jeff's response, after laughing, was "I would never say it that way." He then talked about how like Office, SharePoint is a game changer by taking what up to now has only been available as a disparate set of apps and offering them as a fully integrated suite. And the cloud makes it possible for Microsoft to reach a lot more people a lot more quickly with the latest version of the software. He then added "the cloud will be the next engine of Microsoft's customer growth." He also added that Gartner has now ranked SharePoint ahead of Documentum.

My $0.02: Microsoft is extremely good at figuring out how to crack a market and then dominate it. The approach they are taking here is similar to Office where combining Word, Excel, PowerPoint, etc. -- and making them work and act as a single app, took the business application market away from Word Perfect, Lotus 123, etc. They are taking this same approach with SharePoint where 2010 provides virtually everything a company wants in the cloud and does so as a single comprehensive app. Also Jeff said "the cloud will be..." not "SharePoint will be..." - this shows a mindset that the cloud will be SharePoint.

To dive a little further in I asked why Office & SharePoint were combined into one business unit. His reply was that they wanted it to be a useful product out of the box rather than just some infrastructure that can be used. He then discussed about how the combination gives a lot more functionality for collaboration within a group. Microsoft now talks to businesses solely about Office & SharePoint together because the combination provides such a productivity enhancement to business.

He added that for consumers that Office is still a stand-alone app. But that with OfficeLive and SkyDrive, they think consumers will start to use the cloud some. (I think consumers, especially younger ones, will start to put their documents up on the cloud because that's what they're familiar with.)

I then asked about how this will compete with Google Docs. Jeff's answer was interesting because he dove into the bigger question of Microsoft competing with free. He feels very comfortable that when companies weigh out the full costs of various approaches, that the combination of Office and SharePoint will easily be selected.

I next asked about the social computing functionality in 2010, and especially the fact that social media functionality is fundamentally subversive in a company, even when access is restricted to specific groups within a company. Jeff had a really interesting response to this. He talked about how when email first came out you saw email that misused the medium from 20 page emails to flame wars. But that over time people learned how to appropriately use email - to keep it short, to keep it direct, and to not engage in flame wars. I hadn't thought of that but this is a very good point. He believes people are learning the same thing on the social media front, what is appropriate within the company, what is appropriate outside that relates to the company, etc.

Jeff says that companies are finding the security on the social media aspects of SharePoint very powerful right now. Because even within a company they need to restrict who has access to different blogs, wikis, document lists, etc. He talked about how different companies can dial the empowerment vs. governance to different levels. (I think even within a company this will be handled differently for different groups/subjects.) He thinks the combination of people learning the social contract and companies setting the accessibility from a single control that governs all of the social media components.

My $0.02: This will be major for companies. Internal social media is incredibly valuable if used properly - they have to have it. But at the same time, access has to be controlled. And having a single system with central control that administers the entire system is really the only workable approach. It also doesn't hurt that each piece in SharePoint is as good or better than the alternatives out there.

My next question was "what will be in SharePoint 2015?" Jeff replied that while he can't speak specifically yet (clearly they haven't decided yet), there will be two big things. The first is the cloud will be the primary form of delivery by then. The second is that SharePoint is the only product that brings together Business Intelligence and search, but what they have is still in its infancy. Microsoft will create a lot more functionality in this area. Jeff referenced both FAST search (which is damn good) and the Excel PowerPivot where you can have million row spreadsheets (which is absolutely incredible). One example Jeff cited is he thinks this will significantly help cross-disciplinary research with the combination of search tied to B.I along with the social media.

I next asked Jeff what he saw as the best opportunity for SharePoint ISVs. His first point was it is very hard to do something horizontal because you will then generally be competing with Microsoft, Google, Oracle, etc. Jeff thinks the best opportunity is to look for a vertical opportunity where you can provide a high value solution. And vertical does not mean small, he called out healthcare as a vertical - but it does mean staying out of where the big boys play.

I then told him his answer was a little disconcerting because my company's AddOn Windward Arrow is about as horizontal an AddOn as you can imagine (an enterprise level reporting, docgen, and dashboard system). Jeff replied that he hesitated to discuss horizontal opportunities because those are a lot more complicated. I asked him if he thought our Arrow product had a shot and he was very gracious and said "it looked very cool ... and quite compelling."

My $0.02: Speaking as someone who's company went the horizontal route, his advice is spot on. Go vertical if you can. Horizontal is a much tougher fight and more expensive as you have to market to everyone.

I then asked when will SharePoint Online accept 3rd party apps. He said that they are not ready to be specific on that yet, but they are working hard on it. He said "there's some work to do" to get this ready. I followed up asking if ISVs will be brought in at the same time as other Microsoft products that are directly competitive (a situation my company faces). Jeff replied that Microsoft tries very hard to give ISVs as fair a treatment as possible. But he also spoke directly to the issue that they have to first work with a few ISVs as they first work this out, and other Microsoft products will be in the first small group. One very interesting comment was they generally have it open to everyone "6 - 12 months before release." So it's probably a reasonable assumption that 3rd party AddOns on SharePoint Online are at least 6 months off.

He then followed up saying they want a healthy vibrant ISV community that trusts them. He also said that over the next year the 3rd party SharePoint ISV market is a 6 Billion dollar market. So there's some good money to be made by SharePoint ISVs.

I then moved away from SharePoint with the next question. I asked what advice would you give a start-up company, different from the suggestions that everyone gives. Jeff's reply was "hire very smart people, don't be afraid to make mistakes, be intensely customer focused, but don't do everything customers tell you to do." He then discussed the pressure on start-ups to do the next great thing in 6 months or disappear. But reality in most cases is that being a success takes a lot of time and effort. He referenced Malcolm Gladwell's Outliers (great book) which says that talent is great, but hard work really really matters. He finished by saying that it's important not to run out of cash.

My $0.02: Excellent advice.

I next asked what a Microsoft partner should do to take better advantage of the partnership and become a stronger Microsoft partner. Jeff replied that there are three things, first is "have good people." He added a great line - "there is a lot of talent in this industry, but it's not evenly distributed" (boy is that right). Second is have some way to step out, something that draws attention to what you do. And third is win business - when Microsoft sees customers getting excited about an ISV's app, then Microsoft gets excited. Jeff called out Case Studies that show the savings a product can bring to an industry as a very powerful tool for this third part. (We're going to be writing some new Case Studies at my company ASAP!)

Moving even further afield, I asked Jeff where he thinks the industry media will be in another 5 years as traditional media gets even smaller and there's a million individuals, each with an unknown impact doing social posting. His reply was that "the more things change, the more they stay the same." That 15 years ago there were CompuServe forums, and those had an impact. He then went on to say there are lots of new sites, and that requires Microsoft to stay agile in how they reach out to the media. And the diversity and rapid change in which blogs have traction means there is a lot more trial and error involved.

I then closed out asking if there was anything he wanted to add. Jeff started with "this is the biggest release of SharePoint and Office Microsoft has ever done and SharePoint is a game changer." And he then discussed the cloud and what it brings to the table for Microsoft and for customers. He then also talked about the collaboration that the combination of Office and SharePoint will bring to the office. He did a fast mention of SharePoint Workspace which is Groove rebranded and integrated into SharePoint.

What Does This All Mean?

I worked at Microsoft for 3 years in the Windows group (a long time ago). One thing Microsoft is very good at is figuring out what piece of the market is key to controlling the computer and then gaining that piece. At first that was the Operating System and Microsoft delivered DOS and then Windows. Next was the business desktop and Microsoft delivered Office. Then came the Internet and Microsoft delivered Internet Explorer. Next was the enterprise stack and for that Microsoft developed C#, .NET, IIS, etc as a single, fully integrated comprehensive stack.

In all of these cases Microsoft did not just waltz in and immediately gain dominance. In many of the cases they had false starts, etc. But they kept retrying and refiguring what would work. And Microsoft is very good at determining what part of the system will deliver ownership of the system, and go after that part, leveraging everything to gain control of that part.

I think Office/SharePoint 2010 gives Microsoft a way to own the cloud. Not every bit of it, but to own the stack for the majority of business use. And they are doing so by delivering a product that absolutely rocks. Office 2010 on SharePoint 2010 is incredibly compelling - worlds beyond Office by itself. And SharePoint 2010 itself is a very useful system that nothing else I am aware of can come close to matching for breadth of functionality.

Office/SharePoint will be a major game changer for the business world. The improvements in collaboration, availability, and functionality provided by the combination will increase productivity most everywhere. Even more important, it will provide for new ways for knowledge workers to approach problems and that will lead to major breakthroughs. The Internet is continuing to bring major paradigm changes in what we can do and how we do it. Office/SharePoint 2010 is another major shift.

For those of you that are not taking a look at SharePoint - you need to be checking it out ASAP. For those of you that are using SharePoint, please take a look at Windward Arrow - it rocks.