Microsoft's BackOffice Strategy

September 1994

Microsoft has put together a set of server software offerings -- all based on its own NT software -- that is intended to make the whole greater than the sum of its parts. There are, as you might guess, many ways to dissect this announcement.

Positioning: Microsoft has put together a set of packages which offers the client/server user the opportunity to do one stop shopping. This software is intended, in its full glory, for enterprise customers, with the need to attach their client/server systems to mainframes and multiple databases, positioning Microsoft against vendors like IBM as well as Oracle.

Products: There are no new products per se in this announcement -- each of the products which make up the BackOffice is already announced. Some are already shipping products; some are scheduled for General Availability later in 1994 or sometime in 1995. All of the products are based on NT and are designed to convince customers that they should assume that Windows clients need NT servers (today they usually get peer-to-peer networks or servers based on OS/2 or Unix).

Pricing: Microsoft is pricing each of the elements of BackOffice separately at both the client and the server levels. This means the list prices are quite hefty for large configurations, but we’d expect substantial volume discounting to occur. (This would be normal in any platform setting, but particularly for PC’s.). A client package for NT (not including Exchange) would be $309 (quantity one) and the server would be $2,200. Discounting brings the price of a 100 user system down to about $3,300, 500 users for $13,500 and 1,000 users for about $24,500.

Microsoft is extending temporary discounts to NetWare and LAN Manager users, to smooth their way into converting to NT. OS/2 SQL Server users are also being offered a discount. Discounts start in the 20% range and move up to about 50% at the 500-user level.

Architectures: This is a good place to note that the software vendors have now become the architecture providers for computer systems. In the seventies and eighties, we looked to computer systems providers to provide architecture via bundled proprietary operating systems and layered software. It was difficult to combine multiple vendors’ offerings into a single environment. Today, major software vendors provide operating systems (generally open standards like Unix or de-facto, marketplace standards like Windows) and mini-platforms like the Office Suites, with their millions of users. On top of these environments, they then layer interfaces and environments, API’s, interconnection schemes (OLE, OpenDoc, VIM, MAPI), data access schemes (SQL, ODBA), and more.

We hope that all this means we can connect multiple approaches together in a we-choose-it heterogeneous design. In fact, we may still be tied to the eccentricities of our vendor’s architecture. It’s important to see just how open an architecture is before you select it.

Microsoft is obviously trying to start a positive cycle, where the sales of NT system software will cause ISV’s to write more NT applications and the availability of NT applications will spark more sales of NT. Up until now, the cycle just hasn’t gotten started yet, but we see signs that it’s beginning to start. More NT software is being announced and more customers seem to be looking at NT at least as a future operating system choice, if not as a current one.

Comments or Questions: Send Email to opinions@wohl.com

Home/ Search / 2005 Articles / Issue Archive / Free Newsletter

Entire contents © 1994 by Amy D. Wohl. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden.