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There was some turmoil in Microsoft’s worldwide services organizations in late November, when Corporate VP Michael Sinneck abruptly resigned to “pursue opportunities outside of Microsoft.” Microsoft quickly appointed its chief information officer, Rick Devenuti, to act as both CIO and the head of worldwide services.

Coming from IBM Global Services, Sinneck was a big catch for Microsoft. But there’s another IBM Global veteran on the Microsoft services team who is still on board: Shahla Aly. Aly is general manager of the worldwide strategy and enablement team within Microsoft worldwide services. In that role, she oversees the Services Global Partner, Intellectual Capital Exchange and Global Learning Services teams. She also is responsible for Microsoft’s worldwide services strategy, managed services programs, consulting offerings, professional development, marketing and communications.

Aly has worked in IT services for more than 20 years, at companies including Xerox, Gulf Oil and, for the last 18 years, IBM. Aly’s last IBM assignment before joining Microsoft in December 2002 was as VP of Communications for IBM Canada. She also spent some time as VP of e-business services for IBM Global Services.

Mary Jo Foley, editor of Ziff Davis’ Microsoft Watch, spoke with Aly via e-mail in September about what’s cooking in Microsoft services. Here’s the transcript, edited for length:

Microsoft Watch: A couple of questions about your responsibilities. Are you responsible for more than Microsoft Consulting Services (MCS)? What constitutes “managed services,” with which you also are charged?

Aly: I am responsible for the Microsoft Services strategy which includes Microsoft Consulting Services (MCS) as one component. As for managed services, this refers to our managed support programs, such as Microsoft Services Premier Support, which is available to our customers and partners.

We have taken a more centralized approach to how we develop and deliver services to our customers and partners globally. We are no longer operating as two distinct business units (MCS and Product Support Services, or PSS) rather we operate as one global business that develops and delivers consulting services and product support to our partners and customers around the globe.

Microsoft Watch: Given your IBM history, are there specific things that IBM Global Services does/did well that you’d like to see Microsoft do more of? In the same vein, are there things IBM Global Services does/did that you want to make sure Microsoft does not do?

Aly: I can think of best practices and lessons learned from every company that I have worked for. With our partner network, Microsoft Services applies the resources of the world’s leading technology company to help customers discover and implement high value solutions that generate rapid, meaningful, and measurable results for their business.

Microsoft Watch: Microsoft seems to be very committed to building a set of frameworks/blueprints upon which its own consulting division and its third-party partners can build. Is building out this set of frameworks a key goal for Microsoft right now? Do you have milestones as to how many such blueprints you’d like to have by a certain date?

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Aly: At Microsoft we call these frameworks and blueprints “service offerings.” These are “repeatable solutions” which capture and harvest the experience — intellectual property, if you will — then brings this rich knowledge base to a customer’s specific business solution. Enhancing our service offerings, of which there more than 30 available today, and bringing them to market is a key goal for Microsoft Services. We are aligning these offerings with our corporate marketing strategies.

As for timing of new offerings, we are working on a defined schedule, however, we have nothing to announce at this time.

Microsoft Watch: Could you talk about how MCS’ role has evolved since you’ve been at Microsoft, vis-a-vis MCS’ dealings with third-party systems integration partners? Is MCS doing less or engaging in different kinds of business in order to leave more business for Microsofts channel partners? Is there a rule of thumb or set of guidelines as to when MCS will/won’t be part of a deal?

Aly: We work with more than 750,000 partners, enabling them to drive the successful deployment of Microsoft products and technologies. In order to ensure this, we have introduced a balanced scorecard for our field that metrics our consultants on partner and customer satisfaction. We have introduced a Services Partner framework that clearly outlines the role Microsoft Services plays and how we engage with our partners. We prefer to have our partners (as) prime services (leads) and then we will sub-contract in, as appropriate. In the end, we want to ensure we are creating predictable, trustworthy relationships for our partners and satisfying our customers.

Microsoft Watch: Microsoft laid off nearly 200 of its MCS staffers earlier this year. Could you revisit why that was done and whether Microsoft is cutting its total number of MCS staff (or just shifting the types of folks you have in the fold)?

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Aly: This initiative was a conscientious attempt to identify the skills that are required to evolve and refine our resource talent (skills and capabilities) to a higher level and to develop a services engagement model that allows us to more effectively work with our partners to jointly deliver the greatest value to our customers. By doing this we are better aligning ourselves to best meet the rapidly growing customer needs for more robust customized enterprise solutions. This rebalance — while a difficult decision to make — was the right thing to do to meet the evolving needs of customers, partners and best establish Microsoft for long-term success.

Microsoft Watch: How many worldwide Microsoft Services employees are there currently?

Aly: As for Microsoft Services, we have approximately 11,000 employees worldwide in MCS, PSS/CSS (Product Support Services/Customer Support Services) and Premier Support. Of those, approximately 3,000 are in MCS. We have no plans to change our organization size at this time.

Microsoft Watch: What are the Services organization’s biggest priorities for services in FY 04? What are your three top campaigns (for example: getting more Windows Server 2003 deployed; finding ways to replace Linux, etc.)?

Aly: In Microsoft Services we have focused our FY 04 goals on driving customer and partner satisfaction, creating an integrated comprehensive value proposition and professionalizing services. We have opened up our service offerings to our partners through our services partner framework, and more clearly defined how to do business with Microsoft Services. We are focused and committed to drive adoption and deployment of Windows Server 2003 by helping our customers maximize the business value they get from Windows Server and their existing IT investment.

Microsoft Watch: Microsoft earlier this year made the decision to allow its corporate sales force of roughly 3,000 people to sell all Microsoft products, including SMB wares previously pushed through the channel. What impact, if any, does that have on the Microsoft Services organization?

Aly: This recent change will not impact Microsoft Services or our approach to services. In fact, if you look at Microsoft Business Solutions they already have a very strong, strategic partner model in place, not only for sales, but also in how they deliver services to customers.

Microsoft Watch: Does Microsoft want to grow, shrink or keep its services business the same total percentage of sales in the next five years? Why?

Aly: At Microsoft we view services as a means and not an end. We are here to enable our partners and help customers realize the maximum results from their IT investment. We are not focused on growing or shrinking — rather on making sure we are prepared to meet the needs of our customers and partners. At this time we are appropriately staffed to meet this goal.

Microsoft Watch: What kinds of products/technologies does MCS deal with the most, at this point in time? Which ones do you expect to be dealing with most in another five years?

Aly: MCS works with our partners to build and deploy solutions on the Microsoft platform for our enterprise customers. We don’t necessarily work on any particular product the most, rather we focus our efforts on helping our customers and partners develop and deploy holistic solutions that generate tangible business value.

Microsoft Watch: Self-healing/autonomic computing and grid computing are two hot spots for other software vendors who sell services. Are these key for MCS/Microsoft services yet? When will they be, if they will, in your view?

Aly: Our Dynamic Systems Initiative is absolutely key to Microsoft Services. In fact our business model is built on working on new technologies and emerging markets. With the Dynamic Systems Initiative I believe that integrating our innovations directly into the platform is a win/win situation for our customers and partners.

(This interview is excerpted from an article in the September 12, 2003, issue of the Microsoft Watch newsletter.)