Microsoft Hits Rough Patches With Managed Services

Microsoft is nurturing a plan to expand its work in managed services over the next year as companies look to reduce the cost of their internal IT management, a top company executive said Tuesday.

Microsoft is currently providing messaging and collaboration services for two clients, but the move into managed services has highlighted “shortcomings of our software,” said Bob Muglia, senior vice president of Microsoft’s server and tools business.

“It’s been a real learning experience for us,” Muglia said during his keynote at the TechEd IT Forum in Barcelona. “To say that we found some issues would be an understatement.”

Muglia stressed the program, which he called Microsoft Managed Services, is still in an incubation phase. One problem has been multi-tenancy, or having more than one organization utilizing a server’s software, Muglia said.

Another has been ensuring that Internet and data access is reliable and swift. “Our software needs to work across the Internet transparently,” he said. “We need to transform the way we get data back and forth.”

Over the next year, Microsoft will take on more customers, primarily focusing on messaging and collaboration services, he said. Eventually, Microsoft could offer desktop management, although Muglia said that task is complex and the company is studying it.

So far, customers haven’t expressed concern about Microsoft holding on to their corporate data.

“For the next couple of years, there’s no lack of customers interested in working with us in this space,” Muglia said. “We think of it as an incremental opportunity on top of our software business.”

Muglia stressed that Microsoft’s offering would not be in “significant” conflict with other partners offering managed services since the potential for the area will be big over the next decade.

Microsoft has been building its managed services offerings through several acquisitions. It bought FrontBridge Technologies last year, which provided e-mail security and archiving.

Muglia said FrontBridge brought compliance-related technology to round out its services offering. In March, Microsoft renamed the technology as Exchange Hosted, offering filtering, encryption, archive and continuity-related services.

Microsoft also agreed in May to acquire Softtricity, a developer of software that allows streaming of applications to desktop computers in addition to tools for desktop management.

-Jeremy Kirk, IDG News Service (London Bureau)

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