Word 2007 and Pilot Fish

So this is my first post from Word 2007. This is a godsend for me. I often create many grammatical mistakes and admittedly can no longer spell worth a darn since I passed the age of 25. Now that I have a 10 year old, (10 years later), I can now ask him how to spell most words and it gets me by. Check out the announcement on Joe Friends Blog.

So in keeping with my theme of staying away from pure announcements, I might as well talk a bit about something I’ve been running into lately. Since taking on technical enablement with ISVs and their partnership with Microsoft we often find areas where MSFT and the ISV will compete. Yet the importance for a mature platform and development tools brings ISVs to the MSFT dinner table. It’s new term I call “co-opetition”.

CO-OPETITION – to partner with another entity at some level while still competing at yet another level in a software application solution stack. Works very well for ISVs that understand the role of a Pilot Fish and how swimming with the large ISV predators can work to their advantage.

What I have found the last several years working at Microsoft is by agreeing on the platform and tools ISVs can compete further up the solution stack and do very well for themselves. This has many benefits for both Microsoft and the partner ISV. I’m going to elaborate on a few of them now:

• Contrary to popular belief Microsoft owns only about 28% of the WW software sales pie. Dig in and fork up some of the remaining 72% of pie still out there.

I’m not going to worry about quoting the specific analyst report, this is a commonly reported number. The point I want to make is that there is a very large pie out there with more than enough pie portion left for other ISVs to engorge themselves upon. In fact if you look at the operating system and tool costs for most software solutions, the percentage is very low relative to the whole cost of the software solution, typically under 15%.

• When you look at emerging technologies like Digital Ink or Speech-to-Text (or substitute some really expensive to develop technology), let someone like Microsoft provide the base platform and bear the primary R&D investment.

In the last several years Microsoft has specifically built teams of individuals to engage the ISV community. This helps partner ISVs to focus on building best-of-breed business solutions. And where better to have a laser focus than on the areas of the software stack where the ROI is the highest? Besides, do you have $5B+ to spend on R&D every year?

• Competition is good for both the competitors and the consumers. Enough said.

• When consolidation begins and software solutions hit a commodity level expect Microsoft to enter the fray.

As products and technologies mature, especially if used by a large number of business both vertically and horizontally focused, these become great targets for additions to our base Operating System or a product we can sell to the legions who use Windows and Microsoft Office. What this means is you need to keep investing in compelling solutions that will command top dollar for your R&D investment. Especially in today’s fickle markets where a compelling idea or solution can be yesterday’s news in 6 month’s time.

So I think that is a good start to how to be Pilot Fish, let’s see how publishing from the beta blog code works in Word 2007….