CIO.com: When I talk to CIOs, IT staff and users who have these big installed systems, privately many will tell me how much people revert back to Outlook or Excel and reject these new big systems that come in and seem too complex. You've probably heard that a lot?

Caren: I think that's very true. Actually, the experience that drew me to join the Microsoft Business Solutions group was an interesting one. It was out in the Midwest with one of the largest oil companies in the world, and they're a big SAP customer and a big Microsoft customer, and I was meeting with their senior IT leaders.

After a long discussion, just about how they think about Microsoft and how they think about SAP, one of the gentleman basically came to the realization and said: You know, we actually don't run our business with SAP; SAP is the place at the end of the week that we put in some high-level numbers to keep finance happy, but we run our business day-in and day-out, we make decisions, we do analysis, we collaborate with e-mail and with Excel.

Our goal is to let companies continue to collaborate and make decisions, share information using Excel and e-mail, but have it be attached to the kind of workflows and processes that companies want to have their employees follow, and have the data be in Excel, but have it be secure and current so that everyone has the same view of the business.

It's letting you stay where you naturally want to work and keep that flexibility, but get the benefits of having really efficient structured workflows and very secure and auditable information, and to be able to access and make decisions on.

CIO.com: Would you say that one of the challenges over the years has been to get the word out to these businesses that when they think of ERP and CRM, they should consider Microsoft?

Caren: Yeah, I'd say one of the biggest areas of focus for me is building category awareness, so that when a senior executive, whether IT or business, thinks about the business application purchase, they know Microsoft has really compelling solutions. It still is an area of work for us.

CIO.com: How do you sell them on Microsoft's business applications?

Caren: We talk a lot about the traditional experience of using a business application. So, you spend a lot of money upfront to buy the software, spend a lot of money to train your employees, and you spend even more over time maintaining the system and trying to evolve it to keep up with how you do business. And despite all those investments, the traditionally very narrow user population and the end value the company gets back in return on investment, it's a lot more limited than it could be.

Then we just talk about a world where business applications are self-service, are flexible, and are used by a majority of employees, and how much better that world is for IT, and how much better that world is for their employees and their management.

We talk a lot about Office as the user experience and we talk a lot about how well our business applications leverage the Microsoft server infrastructure to really minimize the cost of owning the application year-in and year-out, which traditionally is another big negative companies and CIOs have about CRM and ERP—just the incredible cost of maintaining the applications.

CIO.com: An article I just wrote in September was about a very small business that ended up purchasing SAP ERP applications, when in the past, they probably would have gone with Microsoft. I thought it was an interesting case because this company, who had like 10 users on the SAP system, was not what we generally think of as SAP ERP customer. So as SAP and Oracle start invading this space, where before there wasn't a ton of people going after the 12-seat companies and Microsoft applications were king, how do you see the competition playing out?

Caren: That kind of leads to the second point that's core to our strategy. You mentioned overcoming the ease of use and inflexibility that limits adoption. The other one that is core to our strategy is working through partners to serve customers—meaning building a great, flexible application, but then relying on a really strong, healthy channel to build vertical and micro-vertical solutions that particularly for the mid-market help a customer not just buy an ERP system but buy an ERP system that, for example, works for frozen fish manufacturers.

It's a solution that's much closer to what you need, in the end, that's off the shelf—although off the shelf from a partner, so you get the solution faster and you spend a lot less money on it. It's also the local partner that can really augment or in some cases handle the needs of a company that doesn't even have an IT department. That local touch that our channel provides really gives a strong advantage in the mid-market.

So, to your point, despite Oracle and especially SAP talking about their mid-market focus, we really haven't seen a huge impact on our ability to win business there, and I think that's in large part due to our strong partner channel.