Fueling the .NET Migration

Microsoft has accomplished a lot in the last year. Just look at the channel.

ISVs and providers now accept that .NET is real. Many are even more excited about “Longhorn” and the impact it will have on the industry. Almost none (save fanatical members of the Flat Earth Society) believe Microsoft will fail to dominate markets with .NET. As my brother, managing partner of Wingate Web,said to me early last year, “The writing is on the wall. It is not a question of if we will port from Linix to .NET, but when.”

Visit the Ziff Davis Channel Zone
.NET News Center.

So what is holding him back? Money. It is that simple.

Without capital to expand their businesses he and other integrators will postpone the investment as long as possible. Businesses want to completely amortize prior investments before incurring new costs. Like the owner of a house that has an old roof, they are likely to postpone replacing it until it begins to leak. My brother, for instance, has already waited 12 months to port, what will another few quarters of fence sitting hurt? Heck, Longhorn hasn’t even launched yet!

The economics are the same for any solution provider migrating to a new platform. They need capital beforethey commit. It takes $250K for a typical ISP, SI or VAR to port their solution to .NET, not to mention taking key people off paying projects. There is no guarantee of incremental projects and no immediate payback for the investment, just the nagging fear that .NET’s eventual dominance requires the move.

If Microsoft (or Intel or Cisco) wants 1,000 partners to migrate to their new solutions, the channel needs $250 million (or $100 million or $500 million) in new investment capital to facilitate the move.

Where will the capital come from?

Where will this capital come from? ISVs and channel providers have only three sources of capital: outside investors, additional personal investments and working capital from current projects.No way is it coming from outside investors. Microsoft is not in the business of providing capital to ISVs. Doesn’t the I in ISV stand for “independent”. No way is it coming from the owners. They already made our investments starting our companies. In my house, for instance, my wife gets very grumpy when I write checks to the company. The company is supposed to pay usfor building it, we are not supposed to pay it for the pleasure of working.

That leaves working capital from current or new projects. Nothing moves an initiative ahead like a client. With a PO in hand you can allocate headcount, obtain resources and win internal political battles. Real projects move faster for two reasons; first, real (e.g. paying) projects get the resources and real (e.g. client) deadlines get met. Without lots of discipline, internal or speculative projects get sidelined. How many dotted-line staff working part-time put internal initiatives at the top of the list?

Want Microsoft to respect you? Find a new prospect or customer and talk them into a .NET version of your solution. Then make sure your account rep knows how valuable you are.

Do you also believe the .NET writing is on the wall but are delaying the move?

Scott Karren, “The Channel Pro,” is the chief executive officer of Channel Ventures, a consulting firm and channel development agency that helps companies build profitable channel businesses. Write to him at scott@channelventures.com and read his weblog at Read his weblog at http://www.channelventures.com/channelprofessional/blogger.html.