August 23
, 2004  (STAR) By Alma Buelva - (First of two parts) Nine years ago, Redmond, Washington-based Microsoft Corp. invested in the Philippines by opening a subsidiary to advance its software business this side of the world. Without a doubt, it has been a mission accomplished despite the rampant software piracy that continues to this day.

It was on Aug. 30, 1995 when Microsoft Philippines officially came into being, and now the software king is finding new challenges and challengers on its path to market dominance. Aside from software piracy, security issues have kept the company on pins and needles. Linux mania is also undoubtedly going stronger than what Microsoft would probably want to admit. The companyís latest foray in run-the-business type of applications is brave and promising, but may not be a walk in the park either as older players in this space such as SAP and Oracle surely wonít give an inch.

Despite all these, Microsoft is well aware of where it stands in the Philippines: still ahead as always. But it also knows it canít keep basking in past glories. As Microsoft chairman Bill Gates himself once said: "Success is a lousy teacher. It seduces smart people into thinking they canít lose."

Commodity Software

Last month Microsoft started its new fiscal year with its eyes on some critical targets. First itís tweaking its software licensing programs to meet the twin goals of increasing sales and, hopefully, discouraging piracy as well. Antonio Javier Jr., managing director of Microsoft Philippines, says they are commoditizing the prices of Microsoft software not just for the home and small business markets but for large companies as well.

"Weíve made licensing simpler for all types of clients. Licensing is a concern because usersí motivations are different from each other. The motivation among big users to buy licenses is the contracting relationship. They buy a lot of Microsoft products that they want to be in one mother contract. Thatís why we are pushing for enterprise agreements that give them the best prices," he says.

Microsoft, Javier continues, also came up with payment schemes to accommodate what it calls "power users" or those who require only limited functionalities of certain software. But the biggest thing to watch this year are Microsoftís new programs designed to address its "unlicensed market" Ė a polite term for those who use bootleg copies of its software.

The first is a program for teachers and students, which aims to give them access to cost-effective licensing. Javier says this will entail Microsoft partnering with a hardware company and a local bank from where members of the academic community may secure loans. Details are still being finalized but Javier hopes to see the program implemented this quarter.

The second is a program to provide government workers the latest and best IT tools at a good price.

Javier says these special programs should eventually pave the way for yet another plan to bring computing to the masses Ė the Peopleís PC. Basically, the idea behind the Peopleís PC is to make available to specific markets very low-cost PCs that run original Microsoft applications. The details, including the projectís final name, are still being finalized. Javier says it can very well be called "Pinoy PC" because it will cover a large base of users that otherwise canít afford computers and software.

"This is to respond to piracy issue and the digital divide. It will be very attractive to the target beneficiaries as they wonít feel (burdened) by what theyíll be paying for," he says.


At present, an estimated 76 percent of local users are still running the older Microsoft operating system such as Windows 98, Windows 2000 and the Millennium Edition. The rest (24 percent) have already moved up to Windows XP and Javier is bullish it can go up to 40 percent during its new fiscal year. The reason, he explains, is their introduction of more business intelligence (BI) accelerators or new functionalities to entice migration to XP.

A good example of an XP accelerator is the Intellectual Rights Management (IRM) that lets users limit the kind of access other people can have over their e-mail. With IRM, a user can, for example, specify that a particular recipient of his e-mail can merely read it but not print or forward it to others. Javier says many of their customers, particularly those in the banking sector, like IRM because it establishes the authenticity of the data they receive and protects data confidentiality.

"They think IRM is a value-added differentiator because you canít tamper with it. The conglomerates, on the other hand, also want to make sure the information coming from different subsidiaries are tamper-proof and something they can vouch for. There are also companies that use IRM to limit only the information that the media might see," he says.

Microsoft is also adding BI accelerators to various products to motivate companies to upgrade to XP. For those running SQL databases, for example, they donít have to buy a different application kit to run a business intelligence report if they are in XP.

Just last month, Microsoft Philippines also announced the availability of two new Office 2003 BI accelerators ó the Microsoft Office Business Scorecards and the Microsoft Office Excel Add-in for SQL Server Analysis Services. Designed for and built on the Microsoft Office System and Windows Server System, the Office BI accelerators allow information workers to assess performance in real-time and reshape strategy with market changes.

Business Scorecards is a Web-based application that enables a company to simplify the measurement and management of key performance metrics. Instead of manually collecting and analyzing strategic business data, customers can use the Business Scorecards to automate the process.

Excel Add-in for Analysis Services is a reporting and analysis tool that allows data to be accessed and analyzed directly in Excel. Users can apply the extensive, familiar features of Excel to data, which can be refreshed and updated as necessary.

Business Scorecards and Excel Add-in for Analysis Services are available for download at no additional cost to users who have valid licenses for the underlying Microsoft products.

Security Check

Security is a critical issue hounding a lot of companies, including Microsoft. Last year, computer virus attacks cost global businesses an estimated $55 billion in damages, according to antivirus software maker Trend Micro Inc. That figure is projected to rise this year considering that as early as March the proliferation of the Bagle, MyDoom and NetSky malware already crossed $100 billion in economic damages worldwide, according to mi2g Intelligence Unit, a specialist in digital risk assessment.

These problems have kept Microsoft busy releasing security patches for its products. After studying how viruses are made and spread, Microsoft found that most of the new viruses are really just reengineering patches. "They look at the Microsoft website, they get the patch and they find out what the patch is created for and then they develop again a virus for that. Almost all viruses that are hitting us now are based on this concept," Javier says.

What Microsoft hopes to accomplish is to rouse the security watchdog in everyone. "If only every user would be vigilant in getting the patches for their systems they would never be hit by a virus because they have updated protection all the time," Javier says. "If not, youíll be hit. Thatís why we take a proactive stance on security by issuing patches freely to the market."

(To be concluded)

Reported by: Sol Jose Vanzi

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