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Hey Ogren - I'll take a Heineken Light!
So it looks like Eric Ogren wants to dance a bit, which is fine. If old friends can't give each other a hard time, who can?
In his response to my poke in Tuesday's Daily Incite (http://esgblogs.typepad.com/erics_blog/2006/06/microsoft_foref.html), Eric mentions chapter and verse about how Microsoft typically takes enterprise class products down market (SQL*Server, Exchange, Dynamics), but doesn't go into saturated markets without something new and different.
As Jim Cramer would say, "WRONG!"
EO, remember little products called cc*Mail or QMail? Everyone thinks that Exchange really killed Notes, but that isn't the case. It really killed things like cc*Mail and QMail that pretty much went away. I followed the email market in the mid-90's and Exchange just chewed up these first generation mail servers. Notes grew in lock-step with Exchange for many years, until it got lost in the morass of IBM.
What about Microsoft Money? I seem to recall a product called Quicken that pretty much owned the retail channel and Money added absolutely nothing novel in that business. But Microsoft pressed forward anyway because they wanted a piece of the market. Same deal for Small Business Accounting, that is still trounced in every way by QuickBooks.
Dynamics is another example of this you say? Not even close. Dynamics began life as a product called Great Plains, so Microsoft didn't bring ERP to the mid-market. They just acquired the leading player after the market was well established.
But the real kicker here is to look back to the biggest Daddy of them all, Microsoft Office. The only innovation that Microsoft brought to office productivity was to bundle it all together and cut the price dramatically. WordPerfect and Lotus 1-2-3 were much better products. But they weren't bundled and they held onto a premium price point for WAY TOO LONG. You're a Boston guy, you should remember the rise and fall of Lotus.
So in all seriousness Eric, Microsoft's new security offerings (ForeFront and OneCare) are much closer analogies to Office, than to SQL*Server. Microsoft has once again innovated on the packaging and dropped the pricing, and THAT is the "big" idea. And to see Symantec and McAfee fall into line so soon with their own service-based bundles and corrected pricing means maybe they have paid closer attention to what happened to WordPerfect and Lotus than you have.
Make that a Heineken Light buddy! And if we can get Symantec to pay for it before they become WordPerfect 2.0, all the better.
Eric is correct in his assertion that Microsoft has generally been pursuing a strategy of taking complex, enterprise products and building a better version for Mid-market and SMB; in addition to SQL Server, they did this with Terminal Services (OEM'ing an older Citrix code base and greatly simplifying administration) and they did this with a lot of the features in Windows Server 2000 and 2003 on server management, features that were present in mid-range and mainframe OS's long before they were available on Wintel.
Mike, you bring up a crucial difference - the security push at Microsoft is all about the consumer, not Mid-market or enterprise. Onecare and Forefront are a direct threat to Symantec and the massive revenue stream coming from retail and consumer sales; much of Enrique Salem's acquisitions have been to feed that beast with new technologies for identity theft, spyware, etc. for the consumer and light SMB users.
The closest part of Forefront that looks like an enterprise applicable product is the ISA server, but most of the functionality is focused on acceleration and management of remote clients, not comprehensive network protection (no protocol analysis for IPS, for example).
So, should Symantec be worried about Microsoft? Heck yes, they have the most to lose in the consumer and SMB space. Should Microsoft worry McAfee and other players delivering advanced security products to the enterprise? A little paranoia isn't bad, but history is on their side a bit more.
Microsoft has a long history of taking a problem that is solved and delivering a product that packages that solution with better usability and integration than the marketplace. Lotus 'solved' the spreadsheet functionality problem, Microsoft packaged that solution better. Macintosh 'solved' the UI challenges, Microsoft packaged it better in Windows.
Antivirus is a 'solved' problem, so Antigen is a good packaging that will get better. Spyware may be a 'solved' problem, too early to tell. IPS, application controls, device management, dynamic policies, vulnerability assessment, etc. are all still evolving, so it's difficult for Microsoft to succeed here as it may be too early.
The difficulty in drawing analogies between Microsoft's behavior in the application space and the security space lay in the fact that there is a finite problem that applications typically solve for the majority of the market - can you think of a killer new feature for Word? Once an application reaches a point of completion, it's diminishing returns to fight a feature battle and the game turns to Microsoft's strengths in packaging and distribution. Security isn't an application, it's a problem that is constantly evolving, making it an extremely difficult market to dominate with any certainty for long, even for Microsoft. There is always a new problem to be solved and that is not Microsoft's strength. RB