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The New Efficiency

For all the feel good vibes around Windows 7 this year, it's interesting to me that Microsoft is essentially returning to an old and time-tested routine when it comes to marketing this product to businesses. Instead of touting new user interfaces or other flashy new features, the company is preaching a variant of the "do more with less mantra" from a few years back. It's called "The New Efficiency" and it's a sobering reminder that the economy is still in the toilet, businesses and individuals are still holding back on spending, and the downward spiral continues. It highlights what a tough time it is for Microsoft to be launching the best product lineup in its history.

I've noted Microsoft CEO Steve's Ballmer's take on the economy before, and it still seems correct to me. He said earlier this year that he expected the economy to "reset," but that after the reset, it would not return to the previous unsustainable levels. This notion has now been formalized by Microsoft as "the new normal," and according to Ballmer, it's the result of a fundamental shift in the economy over the past year.

"After years of economic expansion fueled by unrealistic rates of consumption and unsustainable levels of private debt, the global economy has reset at a lower baseline level of activity," Ballmer wrote in a letter to customers last week. "Today, people borrow less, save more, and spend with much greater caution."

That's not exactly an award-winning open to a sales pitch. But in many ways, what Microsoft is indeed offering at this time of great economic despair is a set of products that, in his words, "can enable organizations to operate more efficiently, more effectively, and more strategically as they respond to the new normal by moving toward the new efficiency."

We've previously discussed Microsoft's business case for a good/better/best series of products that include Windows7, Server 08 R2, Microsoft Desktop Optimization (MDOP) 2009 R2, and more. These and other products, and the technologies they expose, can help organizations save money by improving end user efficiency, reducing costs, improving performance and power management, and enabling anywhere/anytime work scenarios.

Building on the previous message, Microsoft is highlighting some interesting early adopters, including Windows Vista holdout Intel, which is apparently racing to deploy Windows 7. Ford Motor is adopting Windows 7 and Exchange 2010. Convergent Computing, saving $40,000 in annual spending by eliminating a VPN product and moving to Server 08 R2, with DirectAccess. Baker Tilly, saving $160 per PC by moving 2000 desktops in 110 countries to Windows 7.

All of this rings rather hollow, however, until you can analyze the costs and benefits of migrating to any of these new technologies yourself. And there is no better time than the present: Microsoft's deployment tools, while updated for the new products, are not really changing. It's all there for the taking. You just have to take the first step.

In Ballmer's words, those that do so will be met with a "surge in productivity and a flowering of innovation." I'm not ready to get that excited about it, but of course I don't have anything to sell you. I can vouch for the fact that Windows 7, Windows Server 2008 R2, and MDOP 2009 R2 are the best yet, as Microsoft claims, and together they represent an impressive set of technologies that would benefit IT departments, users, and organizations. Will this technology actually save you money? That would be a new efficiency indeed.

Here's Ballmer's complete letter:

In all the talk about the economy, one term that comes up more and more frequently is something called ?the new normal.? I like this phrase because it speaks to the fact that economic reality has undergone a fundamental shift over the course of the past 12 months.

So what is the nature of this shift? After years of economic expansion fueled by unrealistic rates of consumption and unsustainable levels of private debt, the global economy has reset at a lower baseline level of activity. Today, people borrow less, save more, and spend with much greater caution.

This is the new normal and it will be with us for some time to come. The issue now is how to respond.

I believe the new normal requires a new kind of efficiency built on technology innovations that enable businesses and organizations to simultaneously drive cost savings, improve productivity, and speed innovation.

I want to share my thoughts with you about how information technology can enable organizations to operate more efficiently, more effectively, and more strategically as they respond to the new normal by moving toward the new efficiency.

The New Efficiency: With Less, Do More

In the new normal, one thing is clear: cutting costs is extremely important. But cost cutting by itself is not a long-term winning strategy. To build a sustainable competitive advantage, companies must ultimately do two things ? increase productivity and find ways to deliver new value to customers.

The issue, then, is how can organizations take costs out of their operations, increase productivity, and expand their capacity for innovation all at the same time?

For years, we?ve talked about how information technology enables companies to do more with less. But during this economic reset, IT provides business leaders with the answer to a slightly different question: Can my company with less, do more?

Other trends give this question even greater urgency. Workforces are more distributed and employees are more mobile. Government regulations are increasing and compliance requirements are mounting. Data security is more important to preserve and more difficult to maintain.

At the same time, companies struggle with legacy technology systems built on incompatible and disconnected applications that limit access to information and impede collaboration. The complexity of these systems forces IT departments to focus too much of their time and too many of their resources on providing basic services and protecting security.

Today, a new generation of business solutions is transforming IT into a strategic asset that makes it possible to cut costs without crippling customer service or constraining workforce creativity and effectiveness. A new generation of business solutions is eliminating the barriers between systems and applications, and automating routines tasks so IT professionals can focus on high-value work that is aligned to strategic priorities. These technologies can help organizations reduce risk, improve security, and drive down support costs.

This is IT how achieves the new efficiency with less.

At the same time, these technologies streamline access to information no matter where it is stored and enable people to work together securely no matter where they are located. This new generation of business solutions also provides improved mobile computing capabilities so people who work in a branch office, at home, or on the road can be as productive as employees who work at corporate headquarters.

Most important, a new wave of IT technologies offers advanced tools that enable employees to transform insights into innovations that address unmet market opportunities and meet unfulfilled customer needs.

This powerful combination of greater productivity and improved capacity for innovation is how IT enables businesses to do more.

Software Solutions for the New Efficiency

This year, Microsoft is introducing a wave of new software created specifically to enable businesses to tackle their most pressing challenges and strengthen their ability to deliver innovation to the marketplace.

It starts with Windows 7, the newest version of our flagship PC operating system. Windows 7 simplifies tasks and lets people get more done in less time with fewer clicks. Ready to deploy now, it enhances corporate data protection and security, and increases control to improve compliance and reduce risk. Part of our Windows Optimized Desktop solution that includes Microsoft Desktop Optimization Pack, Windows 7 streamlines management of PC environments, making it easier to reduce costs, improve performance, and enable end users to work anywhere.

These and other enhancements are the result of close collaboration with millions of customers and thousands of IT professionals who participated in testing programs and provided suggestions about the capabilities and improvements they wanted to see. Thanks in large part to their help, Windows 7 is the best PC operating system we have ever built.

We?ve also just released a new version of our server operating system. Windows Server 2008 R2 is designed to increase the reliability and flexibility of server infrastructures. It provides a productive server platform that offers cost-effective virtualization and business continuity, great power saving capabilities, and a superior experience for end users.

Later this year, we will also launch Exchange Server 2010. The cornerstone of Microsoft?s unified communications technologies, Exchange Server 2010 provides a great email and inbox experience that extends from the PC to the phone to the browser and it helps companies archive and protect information efficiently. It also enables companies to reduce costs by delivering a built-in voice mail solution and providing low-cost storage options.

Achieving the Benefits of the New Efficiency Today

Organizations around the globe are already deploying these solutions and reaping the benefits.

At Intel, for example, Windows 7 is providing improved performance, greater application responsiveness, and a better platform for mobile workers. Ford is taking advantage of Exchange 2010 and Windows 7 to streamline communications, improve decision making, and boost productivity. Continental Airlines expects to save more than $1.5 million annually in hardware, software, and operational costs through the server virtualization capabilities of Windows Server 2008 R2 Hyper-V technology.

At Convergent Computing, an information technology consulting firm based in California, Windows Server 2008 R2 and Windows 7 will eliminate the $40,000 in annual spending that was needed to maintain a virtual private network for the company?s 55 employees. In addition, employees can now access the company?s corporate network instantly and download files 30 to 40 percent faster than before.

Another example is Baker Tilly, a London financial services firm with more than 2,000 employees and a network of partners in 110 countries. One of the first businesses to deploy Windows 7 on a company-wide basis, Baker Tilly expects to save about $160 per PC by reducing deployment, management, and energy costs. And because Windows 7 improves productivity, it offers the potential to increase billable time for mobile workers at a rate of nearly $600 per PC. This could return the equivalent of one-half of one percent of the company?s current gross annual revenue to the bottom line.

Businesses aren?t alone in their struggle to respond to the new normal. Governments must figure out how to deliver more services on budgets that are sharply constrained by falling revenue. As part of its response, the city of Miami deployed Windows 7 and expects that it will save nearly $400,000 a year in reduced security, management, and energy costs.

Ideal Conditions for an Era of Innovation and Growth

Despite the challenges posed by the global economic reset, I?m optimistic about the long-term opportunities that lie ahead.

I?m optimistic because there are encouraging signs that growth may resume in many parts of the world during the course of the next year.

More than that, I?m optimistic because I believe we are entering a period of technology-driven transformation that will see a surge in productivity and a flowering of innovation.

The new efficiency will not only help companies respond to today?s economic reality, it will lay the foundation for systems and solutions that connect people to information, applications, and to other people in new ways. The result will be a wave of innovative products and services that will jumpstart economic growth as companies deliver breakthroughs that solve old problems and serve as the catalyst for new businesses and even new industries.

This too will be the new normal ? economic growth driven not by debt and consumption, but by rising productivity and new ideas that provide real value to people throughout their lives. Information technology will play an important role. I look forward to seeing the progress that results.


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