Microsoft Worldwide Partner Conference: Where are the MSPs?

The Microsoft Worldwide Partner Conference (WPC09) remains among the largest vendor-driven IT gatherings in the world. But there's surprisingly little conversation about managed services here. I suspect that could change today (Tuesday) and Wednesday as Microsoft begins to talk even more about Business Productivity Online Suite (BPOS) and Windows Azure (the Windows-driven cloud service). But ultimately, there are some bigger trends worth nothing here at the conference. Take a look.

Multiple sources tell me last year's WPC attracted about 7,500 attendees. This year, a few sources tell me the figure is somewhere btween 6,000 and 6,750 -- a significant drop but still an impressive figure. Plus, remember that most attendees here are paying between $1,795 and $1,995, depending on when they registered. HTG peer groups founder Arlin Sorensen notes that the typical VAR likely paid $4,000 to $5,000 in registration, hotel and travel fees just to get to the conference.

Translation: Microsoft attracts a loyal crowd, and many of those VARs still see immense profit opportunities ahead with Microsoft.

But how many MSPs have actually showed up? MPS software vendors are certainly here in full force. I've already had meetings with Autotask, ConnectWise, N-able and VirtualAdministrator. And more meetings will follow today and tomorrow.

Still, I'm picking up a strange vibe at the conference. On the one hand, Microsoft is wisely evangelizing Windows 7 and Office 2010 (including the ability for customers to host Office Web within their own companies.) And we'll surely hear plenty of news about BPOS, Windows Azure and recurring revenue opportunities over the next 24 hours.

The World Has Changed

But something's "missing" or "strange" at the event, and I can't quite put my finger on it.   My thoughts are still somewhat scattered, but here are some quick-hit observations:
  • SaaS, Open Source and Cloud: I feel like I'm  sitting in the eye of the software storm. Everything is calm at the event. It's like we're in a time capsule back to 1995, focusing heavily on operating systems and business productivity suites. But back in the present, open source, software as a service, cloud computing and a lengthy list of additional threats are circling around Microsoft.
  • ISV Disconnect?: Speaking of open source, it's strange not to see Novell and open source application providers here. I realize Microsoft competes fiercely with open source. But consider this: For the Windows 7 launch, Microsoft is heavily promoting its close ISV relationship with Corel. Yes, Corel. I think it would have been far wiser to focus on far more modern, faster-growing ISVs. And most of those ISVs live in the open source world.
  • Managed Service Providers: To be sure, there are MSPs here. The vendors are out in full-force. But I don't think MSPmentor 100 companies showed up in full force. That's just an educated guess on my part.
I don't want to be yet another blogger who paints a doom and gloom picture around Microsoft. Let's not forget: The company's most recent quarterly net income was $2.98 billion -- a figure most software companies envy. But the problem: The current Microsoft has to compete with the image of dominant Microsoft of old.

The other problem: I'm a bit of a dinosaur myself. I spent the 1990s covering the rise of Windows 95, Office 95, Windows NT and Microsoft BackOffice. The media -- myself included -- needs to work hard to keep Microsoft's current success and challenges in perspective. Rather than always harping on past dominance.

Let me put it another way: It took nearly a decade for the "new" services-focused IBM to escape comparisons to the old mainframe IBM. As ConnectWise CEO Arnie Bellini put it to me, it may ultimately require an outsider -- a Lou Gerstner-type -- to redefine Microsoft.

Big Crowd, Bigger Questions

Bellini wasn't suggesting Microsoft will go away. Neither am I. The Worldwide Partner Conference reinforces Microsoft's strong ability to attract a crowd. But everyone in the crowd seems to be asking the same question: Where will Microsoft ultimately fit in the new world of SaaS and cloud computing?

Microsoft is working hard to answer those questions. And more coverage of BPOS and Windows Azure will follow. But this isn't a short-term story or one-time blog. It's going to take years for this story to play out.

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