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Microsoft and IBM are engaging in predatory pricing against the small Enterprise 2.0 vendors

by Vassil Mladjov on 10 July 2008, 00:47   0 comments , 436 views
Tags: web 2.0, enterprise 2.0, sharepoint, msft, ibm, moss, blogtroinx, innovators
Few days a go, MSFT announced their new Enterprise and Worker Online Suites pricing. I find this $3 per user per month pricing to be very predatory against small Enterprise 2.0 companies like Blogtronix who are selling similar services to large enterprises as SaaS and on-premises collaboration and social networking.

The good news is that every IT manager knows the true disadvantages of the MOSS platform and when they start to compare it to Blogtronix, we often start laughing hard on the conf calls about how poor the MSFT MOSS offering really is.
It is very hard to go and tell a large enterprise that they need to replace their "FREE" bundles enterprise license SharePoint servers with a new Web 2.0 tools that do the "same" but better. "What do you mean you are better, how, why?!" How can I explain that MOSS only allows you to do 2-D blogging for example or that their community Kit is not even supported by MSFT yet (before even worked online in English). Their Wiki is so bad that they are integrating Java Wikis from SocialText and Atlassian.

The interesting thing is that MSFT invited Blogtronix to “share” our technology with them some time ago and even wanted to license it from us for MOSS and we said, NO thank you. I am very happy that we did not to be honest.  On that meeting with my VC I pulled my laptop and showed MSFT in their conference room a power point, which I still keep for fun. At the end of my power point I had three slides for the MOSS people. On the first I had a picture of a GM minivan and the text:

What is MOSS?


- It takes you from point A to point B
- It comes in several different colors
- It has spare parts

The second slide was of a supper Porsche, I don’t remember the text, but you can imagine

What is Blogtronix ? (and maybe no other text)




The last slide was of a concept Toyota Prius.

Blogtronix + MOSS= the future.


Well, they did not like my ppt very much, in fact, the biz dev guys for MSFT was German and took this a bit personal I think. He maybe be part of this push that I am now discussing with you my reader.

I was a beta tested of SharePoint 1.0 back in 1994 (or something) and MOSS has not changed much since than to be honest. Today SharePoint is more CPU power and memory hungry than ever, but it looks the same if not worse as it did more than 10 years ago too. At the recent Enterprise 2.0 show in Boston, MSFT released and was marketing their podcasting software kid.  Come on guys, its 2008, going to 2009 and you are now trying to take over the world of podcasting? Wow.

So, to go back to the MOSS pricing here for a moment. Blogtronix charges $5 per user per month (starting list price) for its regular BTX enterprise product. MSFT wants to charge $3 for their crappy MOSS and Exchange bundle. OK, we may have to lower our price if it comes to price, but I don’t think so. I do believe that Blogtronix offer a much better product and I am willing to prove it. Many CIO/CTO of large enterprises have tested Blogtronix and have told me themselves and many more, who will test it will come to the same conclusion. Will the MSFT price hurt Blogtronix and other small companies like us, MSFT defiantly hopes so. We will see how the EU will look at this over time and how much the next penalty against the giant will be.

IBM and MSFT both bundle their regular MOSS and Lotus Connections products with their enterprise licenses and this is how MOSS has a great “success” as the best selling MSFT server or something like that. In reality, very few enterprise use MOSS for anything but for file sharing and MSFT knows it. Having the 10+ desperate partners out there to integrate with them and be part of the shared Press Release does not mean that MOSS is the answer for you. IBM has the same problems as well. In order to run Lotus Connections, you also need to have all their products in place like DB, Web Sphere, etc, etc, and if you are an IBM show you may not have another choice, maybe.  IBM still does not have statistics and is not willing to go head-to-dead with Blogtronix in a open display of what they can and can not do and why. Come on, who is afraid of the big bad wolf?! Blogtronix is not and is here to show it. We were the first company to offer Web 2.0 for the Enterprise back in 2005. VC and companies were laughing at us. Who is laughing now guys? Come of and lower your prices and try to copy our products from your Indian labs, you are not and will not be the real innovators and this is a fact and we are taking your clients a way from you one by one. You guys are slow and can’t even offer real web 2.0 solutions on your own despite your large R&D budgets. Why is that tiny companies like Blogtronix are better than you? You don’t have the spirit any more and now that Bill is no longer with you, watch out we are coming for your peace of the pie.   


Microsoft Outlines Enterprise and Worker Online Suites

Mark Long, newsfactor.comWed Jul 9, 4:49 PM ET

At the Microsoft Worldwide Partner Conference in Houston this month, attendees received new details about the software giant's push into the realm of SaaS (software as a service).

Tailored to meet the needs of an entire workforce, the Microsoft Online Services platform is designed to delivers enterprise-class software to businesses of all sizes -- from employees using a PC infrequently to information workers in need of more advanced capabilities, said Stephen Elop, president of the Microsoft Business Division.

"Microsoft Online Services is a key component of the software plus services initiative, and we're seeing customers, partners and even competitors embrace this flexible approach to the cloud," Elop explained. "Our vision is that everything you can do with our on-site servers, you will be able to do with our online services."

An Online Smorgasbord

The Microsoft Online Services lineup, which will be hosted by Microsoft and sold through partners, includes Microsoft Exchange, Microsoft Office SharePoint, Microsoft Office Communications, Microsoft Office Live Meeting, and Microsoft Dynamics CRM. The smorgasbord of enterprise-class applications is being made available under two separately priced software suites. Customers will also be able to subscribe to individual service components a la carte.

Microsoft's Business Productivity Suite for information workers will deliver enterprise-class communication and collaboration software as a subscription service. The suite integrates Dynamics CRM and Exchange e-mail and calendar capabilities with Office SharePoint and Live Meeting conferencing for $15 per user, per month.

The second suite, called Deskless Worker Online, incorporates online versions of Exchange and SharePoint and will be offered to businesses of all sizes for $3 per user, per month. The suite will include Outlook Web Access Light for corporate e-mail along with easy access to SharePoint portal and team sites and search functionality -- including read-only access to company information on policies, training and benefits.

Differentiated Value

Microsoft is clearly hoping its partners will see Microsoft Online Services as an opportunity for them to attract customers and boost sales. To sweeten the deal, partners that sell Microsoft Online Services will receive a recurring revenue stream for as long as their customer subscribes to the services, Elop said.

"For partners, it's about the differentiated value they can deliver on top of our services, as well as providing them with an ongoing revenue stream. There is incredible partner opportunity at every level -- integration, migration, customization, consulting services, and managed services," Elop said. "Microsoft Online Services provides stability and an opportunity to create long-term customer relationships."

Partners selling the suites will receive 12 percent of the first-year contract value, with recurring revenue of six percent of the subscription fee every year for the life of the customer contract. So partners could receive up to 18 percent of the subscription value in the first year.

"The success of Microsoft Online Services depends on the partners that sell, customize and provide consulting, migration and managed services for customers," said Allison Watson, corporate vice president of the Microsoft Worldwide Partner Group. "Partners will have a tremendous opportunity in the mid-market, where customers can get enterprise-class software delivered on a predictable, pay-as-you-go basis."
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