Microsoft’s first major layoffs signaled earlier this year that the economy’s precipitous slide hurts even the world’s largest software company.
But as enterprises cut costs, Stephen Elop, president of Microsoft’s (NASDAQ: MSFT) business division, still sees plenty of reason for optimism despite slowdowns in sales of his division’s flagship product, Office 2007.
Instead, other offerings in the company’s business portfolio, notably SharePoint, are still performing well, Elop said during today’s Morgan Stanley Technology Conference.
“SharePoint is doing fine with double-digit growth, even in these hard economic times,” he told the audience of financial analysts.
Indeed, while some vendors see only a time to pull back and wait for the economy to turn around, Elop said he sees opportunities to expand his unit’s impact on Microsoft’s bottom line. One of the data points driving that optimism is a greater-than-expected number of enterprise agreement renewals.
Enterprise agreements are long-term contracts to deliver software to corporate customers who pay for the software and services over time.
“We have the strongest story about the future than we’ve had in a long time,” he said. “It may mean fewer seats but the amount of products being used is increasing, saving money overall” for customers.
Besides SharePoint, he also highlighted Office Communications Server 2007 (OCS) Release 2, the company’s unified communications offering that shipped a month ago.
In many ways, OCS is a complementary offering to SharePoint. Unified communications aims to tie disparate communications technologies — instant messaging, video and Web conferencing, e-mail, Voice over IP (VoIP) telephony and data like a user’s location and availability — into a single platform. SharePoint, meanwhile, provides document management, collaboration, portal and enterprise search capabilities.
At the same time, Elop didn’t miss an opportunity to disparage competitors to Office — specifically Google Docs.
“If you look closely at how Google Docs are being used, it’s two or three times a month that someone will use it for about seven minutes, [while] the majority of companies are still using Office,” Elop said.
[cob:Special_Report]Additionally, however, he acknowledged that some initiatives carry the risk that customers may not adopt them. As an example, Elop cited Microsoft’s move toward online services for enterprise users.
“It’s hard to predict how much a subscriber-based Exchange will resonate with corporate customers,” he added.
Elop said little about the next release of Office — codenamed Office 14. However, CEO Steve Ballmer said last month that release will come in 2010, not 2009.
Elop joined Microsoft just over a year ago, after leaving Juniper Networks, where he was chief operating officer. He was previously president of worldwide field operations for Adobe Systems, a role he got when Adobe bought out his former company, Macromedia, in 2005, where he was president and CEO.