Roundtable Q&A: Infrastructure Optimization Benefits Companies at All Stages of IT Investment

REDMOND, Wash., May 24, 2007 — Microsoft’s message to companies seeking to maximize agility and create a People-Ready Business is simple: You can get there — and IT can help. In an inaugural “Inside Licensing” Webcast today, a panel of experts discusses steps companies can take and tools they can use to get their IT infrastructures to the next level — exploring topics such as Infrastructure Optimization (IO), standardization and Microsoft’s licensing structure.

For more insight into how Microsoft is evolving its licensing to help companies become People-Ready, PressPass spoke with several experts, many of whom feature in today’s Webcast: Joe Matz, vice president of Microsoft’s Worldwide Licensing and Pricing Group; Todd Pekats, director of Strategic Alliances for CompuCom Systems, a Microsoft Gold-Certified Partner that offers many services including the procurement and management of hardware and software; and Jim Johnston, director of enterprise architecture and advanced technology at Pittsburgh-based PPG — a global supplier of paints, coatings, chemicals, specialty products, glass and fiber glass.

PressPass: What is Infrastructure Optimization?

Matz: Microsoft developed the Infrastructure Optimization models to help customers realize the value of their investments in IT infrastructure, to make the IT infrastructure a strategic asset that enables agility within their organization, and ultimately to help them create a foundation for a People-Ready Business. As Mark Hill, general manager of Microsoft’s Enterprise and Partner Group, explained in the Webcast, any company that wants to build a People-Ready infrastructure should have a process that helps them evaluate where they are today and then take planned, predictable steps toward a more optimized infrastructure, with each step providing a verifiable outcome and business benefit. IO is based on a series of models that helps customers understand the state of their infrastructure and then define a technology blueprint to move from a basic IT environment to a dynamic infrastructure that enables business growth and delivers on the promise of a People-Ready Business.

PressPass: How are customers benefitting from their “optimized” infrastructures?

Matz: Microsoft has gone through this process with thousands of customers and partners. After the initial assessment, we lay out the benefits that customers can get from optimizing aspects of their infrastructure — whether they’re around desktop server or device management, security, networking or provisioning a standard identity across the business. All of these are fundamental parts of infrastructure that allow other applications to plug into that infrastructure. Basic IT environments tend to be highly manual and reactive with lots of energy going into fighting fires, while more mature environments tend to be automated and proactive, enabling employees to focus on business. So customers with more dynamic infrastructures will see things like increased security, increased manageability and increased agility to enable their people to be more effective. They will invariably see a lot of cost savings, as well — in part due to increased standardization in their IT environments.

Johnston: Standardization is key. In my experience, if you have a standardized IT environment, your costs are going to be dramatically cut. PPG is a global company with 20,000-plus machines in more than 20 countries. Keeping anything standardized in such a complex environment is challenging. However, to achieve costs savings, we’ve implemented processes and procedures across PPG which aggressively drives standardization and leverages existing capabilities. For example, we have a global technology introduction process that challenges unique or one-off requests to introduce non-standard technology. The request has to provide real differentiation over our existing standards to even be considered for implementation. If it truly provides the differentiation and value equation then we consider it as a potential standard for the company and not just a unique solution for one business.

Pekats: Every customer gets a benefit from standardization no matter where they are in their growth. There are immediate savings from a deployment and rollout perspective, and then there are ongoing savings along with reduction of complexity, which increases the savings and helps with that agility. Standardization can have long-term benefits in almost every aspect of the environment — from educating the end user in how to operate a process to helping support staff fix a problem or a change to helping a tech fix a piece of hardware. It affects the entire continuum.

PressPass: How does Microsoft help customers with having the benefits of standardization together with flexibility and choice?

Matz: Our licensing structure enables this for our customers. In the early stages of IO, customers are looking for flexibility and choice and maybe buying the best of breed of a particular product, so we provide that for them. Then, as they adopt more advanced functionality, we provide them a simple way to buy. Our goal has been to provide flexibility and choice, simplicity and then ultimately to provide the value for our customers to migrate from the early functionality through the advanced functionality we have in the Enterprise CAL (Client Access License) Suite.

Pekats: As a partner, it’s important to be able to communicate to the customer all the different aspects of the various licensing components, which requires a sound knowledge of the different technologies and different licensing schema. It isn’t one size fits all. It’s about understanding what the customer’s needs are and “right-sizing” them so that they’re utilizing their agreement to the max. Many times, we try to uncover benefits that customers can get — be it cost savings or additional functionality — by simply using more of the software they’ve already purchased. For example, perhaps a customer doesn’t need a piece of security software because they can switch on a capability they didn’t know they had in another product that provides them that same capability.

PressPass: You mentioned the Enterprise CAL Suite. How does it fit with IO and standardization, and how does it benefit customers?

Matz: Standardization is only the first part of optimization. The IO model has four stages — basic, standardized, rationalized and dynamic. The second part — rationalization — is about taking deep advantage of the software you already have. Again as Mark said in the Webcast, in the rationalization stage of the IO process we start looking at advanced capabilities that customers invariably need in their business but are struggling to provision — VoIP, communication and collaboration internally and externally, providing standard identities internally and externally across their organization, and so on. These capabilities are a key focus in our latest technologies, and we provide them to customers in one package through our Enterprise CAL Suite, which we introduced last October.

The Enterprise CAL Suite is a license that brings together 11 of the latest Microsoft products, to provide customers with the newest innovations in things like compliance, real-time collaboration, security, communication and desktop management. The main benefits are simplicity, flexibility and value. It saves customers time and pain because it allows them to focus on a single license with a single vendor for all 11 components instead of negotiating multiple agreements, perhaps with different vendors.

It also allows tremendous flexibility in deployment because even if a customer requires only a few components of the Enterprise CAL Suite — the four core products and two or three additional ones, for example — they will have the full spectrum of server CALs in their pocket to deploy as their business needs require. So if a company decides they want to do on-premise Web conferencing and multi-party audio/video conferencing, for instance, they can go ahead and deploy the Enterprise CAL functionality of Office Communications Server 2007 without having to sit back down with Microsoft and go through the whole negotiation process again. If they decide they want to control access to sensitive information no matter where it lives, or if they want to embed digital usage policies into documents to prevent theft after delivery, they can deploy Windows Rights Management Services, and so on. In terms of cost savings, most customers get a package discount of at least 54 percent with the Enterprise CAL Suite, depending on other factors, so from a cost-value perspective it definitely makes sense.

Johnston: PPG is a manufacturing company that is focused on growth, leadership, innovation, and is very aggressive at driving cost reductions. Our IT function is directly aligned with those goals and that means we are very aggressive in fine-tuning our IT spend. The best way to do so from my perspective is the Enterprise CAL Suite. It basically provides me with the opportunity to keep our technology spend with Microsoft at X dollars for the next three years. The Enterprise CAL Suite provides PPG with the technology that we need today as well as capabilities that we can leverage based on our timeline over the next three years to support our growth, leadership and innovation objectives. Not all companies will need the Enterprise CAL Suite, but in our situation it just makes sense from a cost and flexibility perspective.

PressPass: How does the Enterprise CAL Suite fit in with Microsoft’s overall volume licensing story?

Matz: As Carlos Cruz, director of product licensing here at Microsoft, outlined in the Webcast, the Enterprise CAL Suite is part of a progressive story in our server business. Most customers think about buying a basic infrastructure and that’s the first part of our story. They buy a Windows Server CAL and an Exchange Server CAL. As they acquire more CALs, we provide them a simple, alternative way — the second part of our story — to buy three or four CALs together, which is the Core CAL Suite. The third part of our story is that, as they begin to expand the portfolio of technologies they are deploying, we provide them more individual CALs that they can buy in communications, in collaboration, in security technologies. Finally, as they begin to deploy a lot of these different advanced technologies, we provide them with the Enterprise CAL Suite, which is a simple way to bring all these technologies together. When customers get to an advanced stage, the Enterprise CAL Suite is the most simple and predictable way of buying and deploying Microsoft’s most advanced technology.

At the end of the day, licensing should be a conduit for customers to acquire technology to move their business forward, not a separate hurdle that they and their solution provider must overcome. Our goal is to provide more choice and flexibility for customers while maintaining the simplicity in how they purchase from their solution provider. We will also continue to evolve licensing to help our customers take advantage of the industry’s emerging technologies and ensure they get the technology solutions they need.

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