EMC CEO Joe Tucci and Microsoft CEO Steve Ballmer hosted an issue for CIOs at the Plaza Hotel in New York this week. (Credit: Microsoft) This following is a rendering of the whole CNET check with Tucci and Ballmer, which was conducted by Marguerite Reardon, reporting from New York, and Ina Fried, reporting from San Francisco. NEW YORK--It was a lovefest Tuesday here at the Plaza Hotel where Microsoft and storage establishment EMC announced that they are extending their key partnership another three years. The software behemoth and report handling guest have been working closely together for years, but they didn't formalize their relation until 2006. Now things are booming so well for the companies, they've stony to range the methodical relationship.
As divide of the extended partnership, the companies put they'll be focusing more on storage and virtualized environments. They'll also draw on productivity and surveillance solutions to inhibit information breaches. We here at an experience they hosted for their plan customers where the two executives talked about balancing their cooperative and on occasion competitive relationship. They also discussed how the latest pecuniary locale is , and how they faith their continued partnership will relieve them each herd more business.
Below is an edited account of the conversation. CNET's Marguerite Reardon interviewed the CEOs in woman in New York and Ina Fried joined the conversation via phone from San Francisco. Q: Who do each of you meaning of as your biggest adversary today in the corporate technology world? Ballmer: I mark if you mien on the adventure stand today, there's two predominant forces. I would turn certainly Oracle is on the list of ultimate competition and then primarily Linux-based alternatives. Now, IBM shows up for sure.
In infallible spots we imbrication with Cisco. Google is starting to show up a small bit. But certainly Oracle is a unmixed opponent as is Linux. But Linux as sponsored by IBM, but it's Linux more than it is any IBM product.
That's the big competitive powerful for us in the enterprise. What would you say, Joe? Tucci: It's a unimaginative part harder to answer. We have four occupation units that whereabouts the enterprise: virtualization, storage, security, and tranquillity superintendence archiving. And for each one, distinctive competitors soda up.
On the virtualization side, we have co-opetition with Microsoft a teensy-weensy bit. On the shelter side, you'll pay the way for companies equal Symantec. On the storage side, there's no shortage.
You'll conscious of IBM, HP, Network Appliance. On the comfortable conduct side, you'll reflect IBM. How does your partnership redeem how you each joust against these companies? Tucci: I'll give birth to with volume management. One of the things we've been working on for a while is working closer on integration with SharePoint and Documentum, which we imagine brings together two notable aspects of soothe management--user involvement and real, back-end repository experience--and puts them together.
We also over we can have the best end-to-end key out there in security. We are captivating Microsoft with their rights directorship software to more end points, which we suppose will make us stronger against Symantec and others. Ballmer: And the partnership makes us stronger versus our Linux-based alternatives on the desktop.
Part of the modus vivendi we clash with unimpeded creator desktop slang shit is by having stronger all-out value-add. We can't beating Linux on initial price. So, the caprice of being able to go and say, here's a explanation that you can really use to do fantastic security, incredible data loss delay from the client through the back-end, that's a effectual part of our proposition. And that's an model of how you get these things to dovetail.
I can't mound you we're "co-opetiting" or whatever you collect it very well, for example, with Oracle. So, I'm not pretending you can do it with everybody in the business. --Microsoft CEO Steve Ballmer Tucci: Microsoft is making massive forays in the overall operations government space, and we accessory together with some technologies there.
So, I judge together Steve and I both stroke we can be more competitive in the marketplace and victual veritable value for our shared customers. In the agreement, one of the areas you talked about working more closely in is virtualization. VMware is associated with EMC, which is possibly Microsoft's biggest antagonist in virtualization. So how credible is the whimsy that your companies can trade together? And where do you unsheathe the lines of cooperation? And how does that gain customers? Ballmer: We're not sitting here pretending we're partnering with VMware. That's more competition.
With EMC, which is a bountiful mass proprietor in VMware, but is also independent, there's a lot that rides on virtualization. The accomplishment of the stuff is the storage function is being transformed also by virtualization. And virtualization is transforming the storage business.
We want to do very well in virtualization. While Joe may own 80 percent of VMware, he still thinks it's a seemly suspicion to retail storage in places where possibly we'll collect as opposed to VMware. Despite the event that there's a train of contest with EMC's majority-owned sector or entity, there's also a lot of synergy around how virtualization affects the be situated of our offshoot line and the get of EMC's product line. Let me just say, we're over the moon with the asseverate of affairs.
Of course, there's present to be competition in the virtualization space. I meditate EMC is as talented as you're going to get in terms of being able to both--I won't contemplate compete, but own a competing entity, if you will--and comrade with us where we want to. We extraordinarily courteous to Joe and the EMC team for that.
Tucci: I grant with the whole kit and caboodle Steve said. I fantasize I'd add a point that says to honestly serve our customers, you fundamental to form partnerships and alliances. And if you expression for that alliance or partnership to be precise where there's zero areas of overlap, I'm not assured that's physically workable with two powerful companies. So, what you have is this co-opetition.
As great as, love Steve said, you characterize the rules, you both know what you're doing, and have particular and understanding. For positive there will be many Microsoft applications meet under VMware, and that's fine, because it's a win-win. There will be many times where a patron will initiate Hyper-V and want to use EMC storage. And that's fine. We'll fashion together there.
I dream it's an acknowledgment by two tribe that have great consider for each other, and two companies that are powerful, that this is a very fair conduct to go. Ballmer: There's enough shared concern for this to work. If it's 90 percent-95 percent competition, it's distressing to get the slight hint of cooperation. We're nowhere identical to that.
We're 80 percent-85 percent cooperation, something take a shine to that. So, that makes it easier to do the full thing. Tucci: Good point.
Ballmer: I can't be effective you we're "co-opetiting" or whatever you telephone call it very well, for example, with Oracle. So, I'm not pretending you can do it with everybody in the business. That leads to my next question. Partnerships in inexact are very double-dealing to manage, because, as you mentioned, you're cooperating but you're also competing in some areas.
What are your companies doing to make safe that this partnership benefits each of your interests? Tucci: Well, you're right. It's just relish anything else in life. Whether it's a hook-up or two man working together, it just takes time.
Nobody is effective to have surely the same interchangeable views, and it just takes time. You've got to deal with through them. Steve and I assign hour to having reviews very regularly.
We have two people, very knowledgeable commonalty in the back of the space here, that sweat this coalition as a plenary term job. And we bunk all the time. When things aren't truthful or something goes wrong--let's put it this way--we resolve it.
And when things are good, we solemnize it and do more of it. That's what we're doing today, we're saying, "Okay, it's been so good, to Steve's point, the 85 percent reckon help is a unqualifiedly honesty number, we're accepted to go this detestation for three years." Steve and I are thriving to raise the bar. We want more success, and we're flourishing to hold our teams accountable.
Ballmer: These things have to go into one of three buckets. One, they asunder down, there's just too many problems, and at times that does happen to partnerships. Number two, they're in fact mostly irrelevant.
That is, we well-disposed of chef-d'oeuvre together, but the partnership never exceptionally gets any energy. And we've had some of those, I would say. And then the third protection is where they as a matter of fact work.
In the crate with EMC, it indubitably falls into the third category. The fetich that I wasn't certain about when we started--Joe was, I wasn't, and I give Joe trust for this--was would it remarkably be important enough to the EMC clerk and the Microsoft salesperson to matter? Because if it's momentous enough to matter, it's superior enough to the customer. Then it also stays material enough to the R&D guy, and it is high-level enough. When we go into sell an Exchange solution, we get to an address about storage, gratification management, and services along with the EMC people.
So we're talking about things which are definitely substantial to both companies, and real important to the customer. The character cares about what the deployment is going to manner like; how highly available will that Exchange implementation be; what's the storage configuration affluent to glance like. That's an influential part of the overall decision-making process. And because it's urgent enough to the customer, I deem that uncommonly helps.
I didn't conscious going in, I'm not a storage expert. Joe said, count me. Joe and I have worked together 25 years now basically, in a co-opetition arrangement, lovely much the well time.
And I would for instance it has indeed worked. I want to transpose gears a microscopic bit here, and criticize about what's happening in the economy. How is the downturn affecting spending? Where are your customers spending and where are they not? Tucci: I reflect there are several things that I've seen, and I'm unshakable Steve will have a bunch. Most of our customers are dealing with some restructuring. They're annoying to engraving costs.
They want quicker ROIs (return on investments). They want to return unavoidable they carry on with their rightly cardinal solutions. And they want to office themselves for the future. So, you have to in actuality be in accord with your customers.
I really do regard that the winning model here is not going to be the whole shooting match in the cloud or leave everything in the figures center. I think the composite model is the big winner. --EMC CEO Joe Tucci Ballmer: Yeah, I would weight the restructuring deed is affecting almost everybody.
They all have a percentage from on-high that says we're stern the IT budget by X. That's the fashion it feels to me. I don't recollect whether you determine it, that everybody has got that as a mandate.
I'm not saying it's the only phobia they're tough to get done, because they're still under insist upon to make known projects. But that's the midget term. But do you see anything specific? Obviously they can't just shut up down the unharmed operation entirely.
So in what areas are they spending? And in which areas are they cutting? Ballmer: No, but they're not being told to do that. Let's rephrase they want to free 5 percent to 10 percent. That's typically the range, I think. To deliver 5 to 10 percent, you've got to retrieve a scanty grain on a lot of things.
You likely have to hold in abeyance a changed programme you might have done. That's why Joe said, you've got to be in tune, because it's not groove on there's nothing unfamiliar getting done. But some unfledged projects are getting killed. And some cost-saving things are really being funded.
There's also to on vendors to slim prices. All of this is courteous of going on simultaneously. Tucci: One thingumabob we are seeing this year versus survive year or versus the at the rear several years is that customers are looking for quicker ROIs. How brisk is quick, and which projects may be swift will alter by customer.
Obviously in New York you have a lot of big banks that have just merged. So, one of their main priorities is to support them put these banks together and get these systems together. In some cases they go through a bit ready money to save a ton of money. And as Steve said, they're also putting intimidation on you for more set savings, more benefits, and more support. In terms of your partnership, though, how is what you're doing growing to campaign tariff savings and therefore street business for Microsoft and EMC? Ballmer: At the storage standing we certainly all go together that selling virtualization-based solutions drives expense savings.
It fits with the point of the time. Something a charge out of the Data Loss Prevention service, you could request how it fits into this environment. Even in a inflexible money-making environment, that kind of appliance-based technology is contemporary to get funded. And we've got a low-cost, well integrated solution.
We undeniably have a wonderful nice solution, in my opinion. Tucci: I characterize one of the things CEOs--and you're looking at two of them here--don't want to do in a chancy environs is pirate on more risk, right? And yet you be versed in a risky environment disposed to this there will be more risks. You saw the conclusion that happened in the government where they fired a contractor and that contractor introduced a virus into the system. So, customers are prevailing to guard their gage closely. So, there's lots of opportunities there.
We're prospering to be placed sure that we inform customers and avoid additional jeopardy than what they're already experiencing with the economy. It seems as though the root of this ongoing economic crisis is the overall deleveraging of the economy. Does that wish that technology can piece less of a role or at least less soon in fundamentally solving the solvent crisis? Tucci: I don't hold that at all. I consider the opposite actually, but go ahead, Steve. Ballmer: I've got to explain this carefully.
Nothing is current to desist deleveraging. So, the economy has to reset. At the same time, you've got to say, "Where do you get monetary growth?" And the accuracy is you only get productive growth from the following things: citizens growth, inflation, productivity increases. We can't aid with population.
Financial leverage is successful to go negative. We can't in modify that. Population we don't influence. And inflation, the regulation is customary to take care of.
That leaves you with productivity. I ruminate if you did a tow-headed analysis of the end 25 years and said, "What's been the best source of productivity secure in the U.S. or world economy?" It has been knowledge technology.
So, I don't understand that we fix the cancelling factor of deleveraging, but I dig a glimpse of hope in large reckon from information technology. Tucci: Right on, Steve. But let's face at perhaps two or three specifics.
I deliberate there are a few things allied to the stimulus package that person agrees with. A) We desideratum one. B) It should serve create jobs. And C) Maybe it's suitable to talk some of the systemic issues we've had in high society for a long time, in the manner of health care. So, when you expect about solving health care, you're not active to solve it without a lot of information technology.
When you think about about going from an analog grid to a tingle digital grid, you're not succeeding to fix that without a lot of tidings technology. When you think about the issues in education, ditto. And I could go on and on and on. I muse a lot of the programs that are very undoubtedly to vote our stimulus parcel or stimulus packages of other governments throughout the world, will be a great component of information technology.
Do you assent with that, Steve? Ballmer: Absolutely. Do you of that because companies have less leverage, that will labourer briskness things like utility computing where businesses strike for technology more as they use it as opposed to an upfront first-class cost? Ballmer: It might. I cogitate at the end of the age it won't be that tit-for-tat. It's not usual to be felt quite that way. I reckon there is a cloud computing theme, and at the same time, there is a deleveraging theme.
They may stay each other slightly, but not as just as you might think. Google is neither unrestricted nor inadequate cost. That's not a joke.
We're talking about the enterprise. We're not talking about some screwball consumer matter now…Google charges a very strapping price, comparable to our prices, when it comes to the enterprise. --Microsoft CEO Steve Ballmer Tucci: I accede with Steve 100 percent. Wow, you guys are in a lot of agreement. That's awesome.
Now, I remember that you each have partnerships with Cisco Systems. But in particular, Steve, Microsoft has been competing more and more with Cisco. You mentioned that earlier. So where do they join into what Microsoft is doing? Ballmer: Well, there's three inviting dimensions. On their quintessence proprietorship side, the networking side, we utilize together.
But we never found a go-to-market vigour to keep that work that's as powerful, for example, as the one we found with EMC. So, we've always cooperated, and we still do today. But it's never popped in the spirit this partnership does, which is an enchanting difference. Our engineers bring about together, but our salespeople, by and large, don't cultivate together.
On the unified communications side, which is the approaching of video, disclose conferencing, collaboration, and communications, we're competing. We started out adding some utterance and video and conferencing capabilities to our software. Cisco has gone further. They've bought some competitors in the e-mail and collaboration space.
So, we compete, and that will be nutty competition. And we'll get along with that. So, it's got that dimension. And now they've got this redone company that I'm not trustworthy anybody knows literally where it takes them.
They seem to want to boost in on the server business. We go for to allow Windows Server to community who trade servers. So, we're involve maddening to insist upon Cisco a well-mannered customer. But I'm not undeviating verbatim where they go, where that takes them as they elevation in and exceedingly go head-to-head with the HPs and Dells of the world. It's wealthy to be a novel chance for them, and I don't grasp what it has to do with their storage enterprise really.
EMC and Cisco have partnered much more closely. There's even been rumors that Cisco might want to buy EMC. Can you simplify the relationship? Tucci: Primarily our partnership with Cisco has been around their switches, which we've worn in the storage circumstances on the storage space networking side, and, of course, on the network-attached storage side. We also resell their IP deviate as depart of our solution. So, we're a Cisco reseller, and that's gone attractive well for both companies.
We have done some career on guarantee and the supervision secondary with them, too. And that's the area of it. It's an noteworthy partnership. Is it as noted as your partnership with Microsoft? Tucci: I don't want to pace partners in their serenity of importance.
We have a set of file A partners, and both Cisco and Microsoft are layer A partners. I don't set off in the row As who's the most weighty partner. That is a unavailing and no-win exercise.
Ballmer: That's a morality behaviour pattern to misplace partners. I'll sustenance Joe on that. Of course, I discern we're a more consequential partner, but Joe would never have the stake to asseverate that. Microsoft just announced its sooner companywide layoff.
Obviously, Microsoft has shear jobs before. But are there any reflections about universal through the treat of making those cuts that you could share? Has it given you some character of manifold insight into what your customers are experiencing? Ballmer: Well, certainly the more traffic experiences you have, the more you can empathize with experiences other individuals are having. So there's no cast doubt upon that limited is right. There's also no doubt it's never fun to have to tell folks that they're no longer employed. I would circa that we're fortunate.
We're vexing to motif out how to get there primarily through right-sizing and efficiency, as opposed to withdrawing from businesses that we're in. And there's indubitably a incontrovertible principle profession health that comes with that. It's deplorable that it takes this kind of a draconian measure.
But we're active dispatch and helping the folks nation on their feet. It's something we needed to do, and I'm ready we did it for that purpose. You mentioned earlier Oracle as your biggest competitor. In the recent I contemplate when you've been asked the same question, typically IBM is the from the start one.
What well-meaning of shifts have happened to affirm Oracle cover-up and center in your mind? Is it by and large through their acquisitions of many other companies that you competed with? Ballmer: The dispute was purpose specific. So if you gaze at who are the most well-connected product vendors--product, not service--I believe it's changed a lot in the last 10 years. There was breed of pre-bubble, during bubble, and now post-bubble. Pre-bubble, IBM indubitably would have been on that list. The seethe I reckon with kind of an anomalous time.
And IBM is still IBM, and as Joe and I were talking about earlier privately, they're still a press because they're IBM. But if you indeed countenance at who's got the products, at the end of the day, the commodity vendors that are portentous in the effort these days are Oracle, SAP, Microsoft, EMC, and Cisco. I would pronounce that's unusually from a products perspective. Tucci: I'd all things considered take in the IBM mainframe. Ballmer: And the IBM mainframe. Joe is fully right. I'd conform with that.
But ironically--you've got to hear really carefully--he said the mainframe. He didn't translate anything off the mainframe, and that's the part I allow with. The mainframe we all brand of fight with, including IBM, since that's not a extension business. The ask is, when and how does that disappear? If you end a look and say, "Who is best positioned amongst that group?" Cisco, we talked about our co-opetition there.
And as nation holiday mainframes or do mission-critical apps, they're either prosperous to put them in on eminent of Oracle and whatever Oracle tells them to, or they're prevalent to put them in on scale of Windows, and that's why I affectionate of muster them at the top of the list. You mentioned that you're starting to escort Google more in the enterprise. Where are you starting to conjure up them? And what sales movement can you remove against them? Ballmer: They're nipping around. It's not get off on I would about they have a very serious presence, but they're out selling essentially the Google apps on a hosted base to people. We battle very well.
We've got far stronger and more operating applications, but that doesn't foretell you don't abide the competition. And there have been accounts certainly where they show up. But they don't have an on-premise solution.
Despite the actuality that a lot of ladies and gentlemen want to get going hosted, a lot of ancestors don't want to get under way hosted. Google also doesn't have text loss prevention. There's a lot of things they don't have, and a lot of those are things we're doing together with EMC.
Tucci: Let me just hop in here, and patently this wasn't a interrogate for EMC, but I'll counter-statement here. I extremely do assume that the winning model here is not going to be the total in the cloud or leave everything in the details center. I think the compound model is the big winner. Those that can state the hybrid model are going to have a great future.
Microsoft is providing a cross model. With Google, you've got to be graceful much in their matter center to do it. And I think over chance that's not common to be the winning model. I truly believe that.
In terms of that mixture model, it seems in the mood for Microsoft will have a much clearer infamous answer to that when it can offer Office Web Applications both on the desktop and in the cloud. Right? Ballmer: Well, I don't know. We have what society want today. People don't want to head Office applications in browsers. That's not their problem.
Some folk would get a kick out of to speak with the back-end stewardship of their e-mail and their documents handled out in the cloud. So we're whereas a jot of talk into in things find agreeable Exchange and SharePoint Online. Actually we're working with EMC on a edition of those deals.
I don't differentiate if we can one-on-one about the big one we just won together on that. But one of the big pharma companies has a launch that we won together on that ilk. So I don't sense similar to we're missing it. Yes, we've talked about what we'll have in terms of Office race in a browser, but that's not categorically vital to what we're light of as the store opportunity preferable now, at least in the enterprise.
So unselfish companies are more attracted to accessible or low cost than they are to the browser? Ballmer: Google is neither freely nor low cost. That's not a joke. We're talking about the enterprise.
We're not talking about some screwball consumer instrument now. We're talking about the enterprise. Google charges a very strong price, comparable to our prices, when it comes to the enterprise.
No comments:
Post a Comment