TechEd: Microsoft signs up three managed services pilot customers

Two years after creating a division that offers managed services, Microsoft has signed three more pilot customers and is expanding its datacentre investments to pave the way for more deployments.

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Two years after creating a division that offers managed services, Microsoft has signed three more pilot customers and is expanding its datacentre investments to pave the way for more deployments.

In addition to its flagship customer, the battery maker Energizer, Microsoft is now providing managed services for insurer XL Capital in Bermuda and two other unnamed customers.

Ron Markezich, vice president managed services at the vendor, spoke to IDG at the TechEd 2007 conference in Orlando. He claimed the company had received a lot of feedback from its initial deployment with Energizer and was using that information as it expanded its offering to other customers. Microsoft hosts and manages only its own software products for customers, but those products often run in heterogeneous IT systems.

Microsoft manages a deployment of Exchange Server, as well as Sharepoint, Live Communications Server and a remote desktop service for 8,000 Energizer desktop users, Markezich said. The software runs in Microsoft's datacentre outside Seattle, where Microsoft also runs the back end for its Windows Live services.

Microsoft entered managed services later than many of its competitors such as IBM, Sun Microsystems and the diminishing group of independent managed services providers that have found it hard to compete with large vendors or have been acquired. However, Microsoft considers hosted services, including online consumer services and enterprise services such as its managed offerings, as a top priority for the next several years.

Two years ago, Microsoft purchased e-mail managed services provider FrontBridge Technologies. The company recently opened a new data centre in Washington, a location that Markezich said was chosen for its energy prices.

But it has not been an easy move for Microsoft. The firm has admitted some challenges in providing managed services, including the handling of data, as well as multi-tenancy where more than one organisation uses a server's software.

Markezich declined to comment specifically on how much Microsoft charges for its services, since it is different depending on the customer, and he would not say how much customers stand to save by having Microsoft manage IT assets rather than host and deploy them on premises.

But he said there are perks other than costs to going the managed services route. Unlike many other providers of managed services, Microsoft does not charge customers for rolling out a software update, so customers can obtain the latest software from the company without having to purchase it and deploy it themselves.

"We don't say, to roll it out you have to pay us more," Markezich said. "It just comes as part of the standard service fee." He claimed customers like having Microsoft host and manage their software for them because it frees up IT employees and resources that can be used in another area of the business.

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