News

Microsoft: We Will Steal Google's Lunch

• By Kurt Mackie
• 12/08/2009

A Microsoft corporate vice president talked about the company's business prospects, including competition with Google, at a Barclays event on Tuesday.

Robert Youngjohns, Microsoft's president of North American sales and marketing, fielded questions at the Barclays Capital Technology Conference in San Francisco. As might be expected of a marketing executive, Youngjohns was fairly bullish about Microsoft's prospects, particularly with regard to cloud computing and the enterprise software markets.

Youngjohns also played up Microsoft flagging efforts to catch up with Google's search market share. With regard to search, some people say that Microsoft should just concede to Google, Youngjohns said. However, Microsoft isn't giving up because it needs to "attack someone who is attacking us," he explained.

"We think we can change the rules around search and that's why we're charging so hard with Bing," Youngjohns said. He added that Microsoft wants to "steal [Google's] lunch on search" and that "we clearly are concerned about [Google's] Android and Chrome." Microsoft will leverage its ecosystem of products to compete with Google, he explained.

Microsoft is also going strong after releasing a number of 2010 products. Last month, the company released Exchange 2010 as a final product, as well as betas of Office 2010 and SharePoint 2010, among others. Microsoft's challenge now is "to get customers excited about deploying our recent releases," Youngjohns said, noting that many customers still see Microsoft through its older products, like Office 2003.

The two key applications that businesses typically need are collaboration and workplace management tools, Youngjohns said. Microsoft addresses those needs with its SharePoint and Dynamics products, respectively, as well as Microsoft Office, he explained.

While CIOs in the past have said that Microsoft's enterprise software "wasn't ready for prime time," that perception is changing with the new releases of Windows Server and SQL Server, Youngjohns said. He added that Microsoft has cases studies showing that Windows Server 2008 R2 is ready for mission-critical, tier-1 application support.

On the server virtualization front, Microsoft has been achieving market differentiation through its System Center management products, Youngjohns said. Desktop virtualization is an area where there's been a lot of interest, but companies have not realized infrastructure cost savings by deploying that technology, he added.

Youngjohns touted Microsoft's Windows Azure cloud computing initiative as "fundamentally different from other cloud computing structures." Microsoft offers its customers the ability to deploy on premises, in the cloud or use a hybrid approach. In particular, Microsoft has been seeing "very heavy interest in hosted Exchange," he said. He expected to see applications that require scale, like e-mail, increasingly moving into the cloud. Microsoft's transition to serving customers through the cloud hasn't been difficult to do because it already sells long-term annuity agreements to businesses, he added.

Finally, Youngjohns presented Windows 7's release in October as a positive note for Microsoft, especially among consumers. The netbooks market was initially seen as problematic for Microsoft, but "we've done really well" there, he said.

Enterprise sales of PCs with Windows 7 represent a different case because it takes between six months to 18 months to migrate from Windows XP to Windows 7, he said. He added that IT departments also have to do user training, which can seem like a limiting prospect if you have 20,000 to 30,000 users.

An audio recording of Youngjohns' talk can be accessed at Microsoft's investor relations Web page here.