Microsoft: We're Here (almost)

Eleven days ago the word came down: Microsoft plans to build KM apps on top of Windows 2000. And the earth shook. Streams ran uphill. Birds sang. Trembling with anticipation, barely containing our joy, we asked for deliverance.

Nothing. Nada. Redmond was eerily silent.

For Microsoft channel partners, however, hidden in the silence was a message loud and clear: We're Coming.

As soon as the word reached PC DOCS/Fulcrum customers, said Tom Bartley, VP of product development, the faxes and E-mails came pouring in. "People internally were saying 'Oh my God,' customers were asking us 'What does this mean?'"

But PC DOCS/Fulcrum is taking the news in stride. "We're staying focused as a partner of Microsoft," proclaims Bartley. "Our position has always been to embrace and extend Microsoft technology, whatever that is." PC DOCS also recognizes the inherent dangers of dancing with the elephant. "We're this itty-bitty thing hanging on for dear life. Microsoft knows that, we know that."

Softlab, with its Windows-based object-based repository for linking information, is also assessing the damage. Softlab was quick to work with Microsoft on its recent XML initiative, which could have led to competition down the road. "Our position [here] will be similar to what we did then: we need to get a more clear direction beyond the headline, do a little research into what Microsoft is actually doing," said Steve Kaye, VP of marketing.

Softlab, too, sees the difference between what's Coming and what's actually Here. "What [Microsoft is] saying and what they're doing are two different things," said Kaye. "What they're actually doing in KM could be any one of a number of things -- it could be just enhanced contact management." Reassuring words for everyone except contact management vendors.

It's not just component technology developers who worry about Microsoft's imminent arrival. "I will not ever, ever discount the sheer power that Microsoft has, that if they want to dominate a market they can do it," said Fred Gluck, Dataware VP of marketing. "They're at the top of everyone's competitor list, and any company who says otherwise is a fool."

These three vendors are not alone. Today, in strategic meetings across the industry, people are wringing their hands, asking "How will we compete with Microsoft?" Few companies can do it, and only one of them is squarely in our market. Unfortunately Lotus isn't helping its own cause; for the third time in as many months they've delayed the long-awaited Notes R5 upgrade.

Competitive issues aside, PC DOCS, Dataware and Softlab all realize that Microsoft's mere presence will benefit everyone. "Microsoft makes people look at KM, and then they'll see us," said Gluck. And as Microsoft becomes more preachy about KM, veteran solution providers can focus on developing more cutting-edge KM-enabling technologies. Summed Gluck: People pay for solutions, not missionary work.

There are legions of other Microsoft add-on vendors who, as Delphi Group analyst Hadley Reynolds points out, have made their living 'riding the bear.' These document management, workflow and other KM component technology pioneers will soon find themselves challenged by Microsoft and a new parade of channel partners.

So Microsoft's annoucement, though considerably lacking in sound and fury, actually *did* signify something. Vendors on the Microsoft platform are now officially on the clock, if they didn't already know it. And Lotus has taken another broadside in the ongoing war with Redmond.

For all its importance to Microsoft channel partners, the news meant precious little to end users and us market watchers. Here's a few pithy quotes from the analyst community:

• "It's the classic Microsoft entry strategy for a new market -- let the hype build up and do a little floater, then let some time go by and come out with the products you would have expected, maybe a little less." -- Gerry Murray, IDC analyst
• "Microsoft's entrance will confuse the market as people try to learn what's going to be in the OS and what they need to buy from other vendors." -- David Weinberger, JOHO editor and Evident Marketing president
• "Microsoft has not yet delivered any robust functionality to address the issues of managing unstructured information, much less the issues of technology support for reasonably ambitious knowledge-supporting applications." -- Hadley Reynolds, Delphi Group analyst.

Examining other Microsoft "pre-announcements" (Windows, SQL Server, NT) Reynolds also unearthed a neat mathematical equation: "Announcement + Approximately 3 years = Deliverable at not-quite-yet but close to originally promised spec."

The overwhelming concensus: Microsoft is Coming, but it is not Here. The difference is important.

We all know what Microsoft's presence will mean to the knowledge management market. If ever an industry cried out for big-name support and brand-name recognition, it is ours; if ever a company could provide that, it is Microsoft.

Likewise no one doubts that Microsoft will eventually bear-hug KM. "Of course Microsoft will play in this market," said Murray. "Like we should be surprised that they are developing new skunk-work projects."

The problem is, none of this happened. Eleven days ago Microsoft did *not* enter this marketplace. Exchange aside, they are not now rolling out platforms, applications or services that manage unstructured information to help corporations practice knowledge management. Steadfastly silent, Microsoft today sits exactly where they were -- on the sidelines.

Let's not forget that without Microsoft our market is very much alive and flourishing, led by small pioneering companies with cutting-edge technologies. There are plenty of options out there for companies who want to leverage information in every form in order to grow and better compete in the global marketplace.

End users know that. "I believe there are a number of good packages that offer collaboration/workflow/document management functionality," said Dave, a Fortune 100 high-tech industry manager requesting anonymity.

But Dave also knows that Microsoft -- initially, anyway -- can't differentiate without the customization and hand-holding so critical to knowledge management initiatives.

"There are no cookie cutter solutions; they all have to be customized for each organizational situation," Dave adds. "So a Microsoft product probably wouldn't interest me any more than other possible solutions."

End-users like Dave are beginning to understand the value of KM, but they know it takes more than rhetoric and "cookie-cutter solutions." They certainly won't take it seriously without household-name acceptance, which Microsoft will eventually provide, most likely at the infrastructure level.

Which is fine for most vendors whose bread-and-butter is targeted, customized technology solutions. "There's money to be made in KM foundations," said Gluck. "There's more success to be had as an expert working with people to manage knowledge, [with] the tools and know-how to build applications to do that." Until Microsoft challenges at that level, most vendors can safely go about their business.

So what have we learned from all this hoohah?

• End users can look forward to another 18 months of waiting for Godot. (But only 6 more weeks for Notes R5!)
• Microsoft can move mountains (or at least its sales channel) with its breath. When Bill Gates dipped his toes in our pool, the ripples caused us to celebrate a cannonball splash. That speaks volumes about the potential Microsoft brings to this market.
• And finally, Microsoft is Coming, but it is not Here. It's one thing to have market potential. To deliver on the promise of that potential, however, is an entirely different matter.

Microsoft Coming versus Microsoft Here. As an industry let's hold back and celebrate when the latter occurs.