Windows 7 Professional: Open the Door to New Solutions, Channel Services and Profit

Executive Summary With worldwide IT spending projected to grow 4 percent to 6 percent in 2010, businesses of all sizes are scrutinizing the state of their IT infrastructure. Given this backdrop, the launch of Windows 7—and in particular the Professional Edition—provides IT solution providers with an unprecedented opportunity to engage existing and prospective clients in discussions about how this eagerly anticipated upgrade can extend their existing and future IT investments. This white paper:  Discusses how Windows 7 Professional and Windows 7 Enterprise set the stage for complete infrastructure assessments among SMBs  Outlines new managed services made possible by Windows 7’s tight integration with Windows Server 2008 R2 and other  Showcases how solution providers can use Windows 7 Professional or Windows 7 Enterprise to cut customers’ IT management costs while improving employee productivity, freeing up IT budget for investments in applications such as CRM, ERP, and collaboration  Suggests ways solution providers could use Windows 7 to cut their own operating costs and boost profit potential

of 9 Windows 7 Professional: Open the Door to New Solutions, Channel Services and Profit

Businesses Ready to Talk About Their IT The launch of Windows 7 couldn’t come at a better time. With worldwide IT spending predicted to grow between 4 percent and 6 percent in 2010, businesses of all sizes are asking questions about how it pertains to them: About how Windows 7 can simultaneously improve the productivity of their employees and help them control their business technology costs. For IT solution providers who can represent the new OS and its benefits for the bottom line, the next several years will be busy—and lucrative.

“What I hear is that a lot of customers are planning implementations in 2010 and 2011,” observes Luc Joziasse, Sales Director for Wortell, an IT services and Windows solution specialist targeting government, education and commercial accounts in Lijnden, The Netherlands. “For us, this is a signal that we must get into action now. What we need to do now is gain more experience with implementation with migrations, training our employees in how to handle migration projects. We are spreading the word out to the market that we are a top partner to turn to with Windows 7 questions.” According to The Wall Street Journal, “In the high-tech world, an eight-year-old operating system is the equivalent of a 20-year-old car. While XP works well for many people, it is relatively weak in areas such as security, networking and other features more important today than when XP was designed around 1999” WALTER S. MOSSBERG, October 8, 2009

Pent-up Demand For New Operating System Windows 7 already is Microsoft’s best-selling operating system upgrade in history from a consumer standpoint, with more than 60 million licenses sold since the October 2009 launch. That number pales in comparison with the commercial opportunity.

According to Microsoft’s own internal figures, 86 percent of corporate customers run Windows XP or earlier versions of Windows. Roughly 196 million SMB PCs, or about 55 percent of the total installed base, are capable of running Windows 7. At the same time, many businesses have extended the lifecycles of existing desktops and notebooks from the traditional three-year timeframe to as many as four or five years.

of 9 Gartner predicts, for example, that commercial PC sales will grow 10 percent in 2010 and 13 percent in 2011. Microsoft expects sales of 47 million desktops and laptops in 2010 alone. Businesses are seeking performance improvements, better security and management tools that help them better accommodate an explosion of mobile workers. Looking forward, they’re laying the foundation for new applications and solutions they have put on hold during the recession.

That’s why market research firm IDC predicts 177 million shipments of the technology by the end of 2010. And Forrester Research notes more than two-thirds of businesses surveyed in the third quarter of 2009 are planning a direct migration from Windows XP to Windows 7, starting in the next 12 to 18 months.

Threefold Sales Opportunity for Solution Providers Windows 7 itself will represent a wave of new product revenue in the form of operating system upgrades, as well as new desktop and notebook sales. The new OS will also prompt businesses to consider the following solutions and services: 1. Pre-migration assessments that help them evaluate the Windows 7 readiness of all the PCs in their environment. 2. Managed services that provide not only a disciplined migration plan, but also a strategy for ongoing management that can help businesses keep tabs on security, patches and provisioning more proactively. 3. Server and storage infrastructure upgrades that unlock and support the Windows 7 management capabilities and that will serve as the groundwork for improved collaboration, communications and productivity applications.

Winning Over Skeptics Is Key The ability to evangelize and deliver on successful proof of concept implementations will be key to winning broader Windows 7 deals. This is especially true of businesses that may be skeptical about the stability of a brand-new operating system.

InnovIT, a solution provider in London, England, focused primarily on education accounts, is selecting groups of internal evangelists who can trial Windows 7 and ensure its compatibility with legacy applications. That’s because schools traditionally are conservative with operating system upgrades and depend heavily on older legacy systems.

of 9 “We are having the Windows 7 conversation with every single one of our customers. I can’t think of one where there isn’t at least one trial implementation,” says Andrew Dent, InnovIT Managing Director.

Likewise, New York-based Kraft & Kennedy is winning over skeptics in the legal profession by emphasizing the potential of Windows 7 to address fundamental pain points: slow- performing applications, spyware and malware infestations and other stability problems.

“The first question a solution provider should ask is, ‘What pain are your users feeling today in their day-to-day use of technology,’ ” says Peter Kennedy, one of the firm’s Co- Founders. “The biggest obstacle to Windows 7 is not so much of a Windows 7 issue, the biggest objection is training.”

Show, Don’t Tell Wortell tackled adoption features head-on by creating a series of promotional videos featuring its customers who were part of the Windows 7 Early Adopter program: Of the 20 businesses who trialed Windows 7 in the Netherlands before its launch, Wortell supported 12 and it featured 7 of them in videos posted on its Web site leading up to the commercial shipment. Since the launch, Wortell has deployed at least 25 additional proof-of-concept deployments. More than half already have been approved for broader deployments— representing roughly 4,500 workstations.

“Gain your customers’ trust, let them use Windows 7, and they will see how easy it is to take control. They will love it, and then they will need it,” says Joziasse.

Sell Management Efficiency and Increased Security The performance enhancements and usability improvements Windows 7 offers for desktop and notebook users are its most obvious selling points, but the most dramatic changes promised by the OS are the management discipline and tighter security it brings on the IT infrastructure side.

Remember that only 20 percent to 30 percent of the total cost of ownership of a business PC is the cost of the PC itself. The rest is the cost of managing, supporting, and securing

of 9 them over time. One simple way to capture open opportunities with a potential Windows 7 customer is offering to perform a readiness assessment. Solution providers can uncover how the organization can reduce its costs through a more efficient helpdesk, application compatibility, better mobile connectivity, and better data protection and backup. All of the above provides a more efficient foundation for business-critical investments in applications such as CRM, ERP, and collaboration. As an example, just on the Dell Latitude E4200 Windows 7 is: • Up to 69% better performance • Nearly two additional hours of battery life, • Copy files up to 85% faster • Shutdown up to 42% faster • Boot time is up to 38% faster • Open Microsoft Office files up to 46% faster

David Christensen, Vice President of Business Technology Services for the Microsoft Solutions Practice of Denali Advanced Integration (Denali AI) in Redmond, Washington, says it’s important to remember there are two audiences for assessment conversations: IT administrators and line-of-business executives. Many of the same messages will resonate with both groups: Windows 7 Professional improves the performance of existing hardware, it provides unparalleled management insight into your IT infrastructure, it supports remote workers more seamlessly and securely, and it offers a bonus benefit in terms of energy efficiency.

“We’re seeing a lot of people who want help with assessments and deployment planning,” says Christensen. “For a lot of companies, it has literally been 10 years since they seriously thought about deploying a whole new operating system.”

Create the Budget by Proving Cost Savings Steven Freidkin, President of Ntiva, a managed services provider in McLean, Virginia, says by identifying ways that Windows 7 Professional can reduce costs of a customer’s IT infrastructure, a solution provider can help create budget for a migration.

For example, Freidkin’s team has used the BitLocker native encryption provided in Windows 7 Enterprise as a way in the door because it helps businesses ensure better security for mobile systems. “We had someone looking at a separate encryption product,

of 9 so it made sense for them to move to Windows 7 Enterprise more quickly, instead of making that separate purchase,” he says.

Legal IT expert Kennedy says few businesses support ongoing best practices for deploying and managing laptop and desktop hardware, and Windows 7 assessments should help change this mindset—by providing a way to unify policies for new and existing desktop and laptop systems. Many solution providers who have been successful with Windows 7 say one big strength is its ability to run on hardware capable of running Windows XP, which helps them create a more consistent environment to manage across an organization’s desktops and notebooks. But Kennedy says the new OS is definitely creating new hardware sales at some of Kraft & Kennedy’s clients.

“Many companies have underinvested in technology and they don’t have the best practices in place to maintain it. The price of hardware has come down to such a degree that when some people analyze the hands-on time to upgrade versus buying a new PC, they go for the new PC,” Kennedy says.

Adds Denali AI’s Christensen: “There is a lot of hardware that is beyond its useful life. They are looking for this reason to make the change.”

Think Beyond the Desktop Windows 7 is the first in a wave of new technologies emerging from Microsoft from mid- 2009 into 2011. Many behind-the-scenes features associated with Windows 7 Professional and Windows 7 Enterprise, such as the ability to dramatically improve management of client hardware, printers and other pieces of IT infrastructure, come courtesy of its close integration with Windows Server 2008 Release 2. That means Windows 7 sales typically drag along the server counterpart, at a bare minimum.

“Windows 7 is a critical component of a whole new infrastructure, so it makes sense to put the back-end together with the client side,” says Christensen.

What this means from a solution provider standpoint is revenue from the services wrapped around a server deployment and the opportunity to look deeper into the customer’s IT infrastructure. Windows Server 2008 R2, for example, can serve as the

of 9 foundation for a data center virtualization project, along with the requisite hardware refreshes from both a server and storage standpoint.

“We’re able to talk to customers about servers, virtualization and storage, offering them anything from business process consulting to deployment services. For example, a lot of schools are looking at rolling out images of the machines along with installed software. We can help them set up the images. We can also help them define their remote access policies,” says InnovIT’s Dent.

Windows 7 and Windows Server 2008 R2 also are proving to be a boon for virtualization projects, Dent says. Many of InnovIT’s schools are supporting upwards of 14 servers, but the new Microsoft software provides the means for virtualizing those applications and consolidating onto fewer, high-end hardware platforms. For every production server upgrade a school makes, a second server is purchased for disaster recovery purposes, according to Dent.

Solution providers are also excited about Windows 7’s companion unified communications platform, Microsoft Exchange Server 2010. That’s because the new Exchange platform can serve as the foundation for custom application development around business intelligence, information archiving, call performance metrics, and so on.

“This, again, improves the potential for a longer-term relationship with the client,” says Denali AI’s Christensen. “We are talking about doing things in these bite-sized chunks. As you deliver on each phase and offer them immediate return on investment (ROI), it really gives you a chance to prove what you are doing.”

Exchange 2010 also inspires serious storage hardware upgrades. “The good news with Exchange 2010 is that you need two replicas of the Exchange database. So storage area networks are key, and we are recommending them to all of our clients,” says Kennedy.

Rethink Your Services Just as Windows 7 and its related server infrastructure promises new efficiencies for their customers’ IT infrastructure, it represents a great way for solution providers to cut their own service and support costs.

of 9 Wortell was able to reorganize its own internal help desk, reducing the number of dedicated staff positions, because of the remote access capabilities that Windows 7 brings. “For us, it is a cost win, because Windows 7 is more stable than Windows XP, so we have less fallout. It’s easier to support. You also can record the problems and send them to the services organization. They can rank a problem and fix it,” says Joziasse.

What’s more, the company has rethought how to handle field rollouts. Whereas with previous versions of Windows, Wortell relied on more senior services personnel for deployments, it is now able to pull less-skilled technicians into the mix. “Our own operational costs have been lowered,” says Joziasse.

Kraft & Kennedy believes Windows 7 will be invaluable in its own internal push to automate application packaging and deployment services, as well as better document its solution and services guides. It also views Windows 7 problem resolution capabilities as a key tool for its own operational sanity. “If we did things the traditional way, we wouldn’t have enough arms and legs to face the demand we could have in the next year,” says Kennedy. “It comes down to increasing capacity.”

Open Doors Through Your Experience The more Windows 7 credibility a solution provider can build in the early days, especially through pre-deployment assessments, the better positioned it will be to deliver when companies really start spending on the operating system later this year. “Conversations are starting both ways. Our customers are relying on us to guide them,” notes Ntiva’s Freidkin.

“We are getting all of the work that we could want relative to going in and talking about the deployment tools and the impact,” says Denali AI’s Christensen. “People look to us to provide the knowledge you get when working with multiple clients. There’s a huge amount of activity. We’re pulling in a lot of new customers around this.”

The simple fact is many organizations have reduced staff before pre-recessions levels and are absolutely looking for outside help and trusted advisors to guide Windows 7 planning and rollouts. Solution providers that invest in developing Windows 7 foundation skills and field experience early in the upgrade cycle will build the experience businesses will require

of 9 of anyone handling such a mission-critical migration. The short-term payoff will come in the form of new hardware and software sales, assessments and deployments, and managed infrastructure services. Over the long term, solution providers can anticipate ongoing dialogues as customers dig deeper into all the business benefits Windows 7 promises.