Microsoft chief executive Steve Ballmer has set his sights on IBM and Novell as prime targets for the channel to snatch market share.
Speaking at Microsoft's partner conference in Toronto last week, Ballmer was bullish about the previous year's business, describing it as "one of the most fantastically successful years in Microsoft's history".
He identified three key targets for partners in the coming year, claiming it would be the "year of opportunity" for the channel.
"Let's really get after the Novell installed base and push it into the modern world, the real world. As for Notes, I don't know what IBM thinks it is doing, but even we have never been so confusing," he claimed.
Open source was the third key target. The vendor is gearing up for a major marketing campaign against the platform called Get the Facts, and recently completed a tour of the UK to explode the "myths" about open source.
Tony Lock, chief analyst at Bloor Research, said IBM and Novell are traditional areas of competition for Microsoft.
He added: "Microsoft cannot afford to take its eyes of the threat of open source, particularly on the desktop. Even if customers aren't fully convinced about going open source there, they're using it as a negotiating position to win better contracts."
But David Simpson, sales and marketing director at VAR Softcat, said open source has only gained significant traction at the high end or in very small start-ups.
"We've seen one, maybe two Novell customers willing to rip it out and start again with Microsoft, but that's not the norm," he said.
Ballmer also discussed Microsoft's recently revealed take-over talks with SAP. He said Microsoft made the approach because it saw great advantages in linking the two companies' product lines, but talks had broken down because the project was "too complex".
But he said Microsoft will not hold back in any future battles with SAP.
"If we happen to compete, we're going to compete hard and aggressively," he said. "If it's one of our partners going against SAP, we're with you 100 per cent."
Ballmer also identified Microsoft's own installed base as one of its biggest competitors. The vendor estimates 35 per cent of the 600,000 million PCs in use today are running NT or Windows 9x and will no longer be supported at the end of the year.
Ballmer said Microsoft would increase its marketing spend four-fold to support moves away from older PC systems.
Microsoft has launched two new competencies aimed at addressing this market: desktop deployment competency, aimed at mid-market customers and resellers; and advanced infrastructure solutions for enterprise customers.
It has also launched a 'buddy system' for ISV partners, aimed at increasing technical support and access to resources during the development, sales and marketing process.
Separately, Microsoft has delayed the launch of improved software update services and advised non-XP users to upgrade to secure computing. Windows Update Services will not launch until the middle of next year.
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