This is a interesting read.

Microsoft is making a foray into the managed services business, starting with a deal to manage the PCs for consumer products firm Energizer Holdings.

Under the pact, which has not been formally announced, Microsoft will take over responsibility for managing, updating and supporting the battery maker's roughly 6,000 computers and will also host a variety of applications including e-mail, portal and instant messaging services. The deal is expected to be phased in over the next serveral months.

The Energizer pact is the first of several that Microsoft hopes to run as part of a project that the company hopes will help the company better understand its customers needs, a Microsoft executive told CNET

"We want to add a limited number of additional customers in order to really improve the diversity of our experiences, the depth of the knowledge we are going to gain and then drive that back into products that will improve the experience of all of our customers," said Mike Adams, a general manager in Microsoft's IT unit.

The efforts will be revenue-generating, but Microsoft did not put a price tag on the Energizer deal or say how many people would be involved. An Energizer representative was not immediately available for comment. The deal with Energizer was reported late Wednesday by online technology site TechTarget.

Microsoft's IT department will be charged with overseeing the efforts. Adams stressed that the effort was a "project" aimed at improving Microsoft's understanding of its customers and not a new business.

Microsoft has long touted the fact that it uses products internally before they are released to customers, a process called "dogfooding" that the company has said has been of great benefits. Adams said that this will take that effort a step further.

"The concept was really to take what we are doing in IT and make that available to some customers in a different, more direct way than we've been able to in the past."

While many technology companies such as IBM and Hewlett-Packard have substantial businesses offering such outsourced tech help, Microsoft has generally left such work to its partners. The company's own, comparatively small consulting business is more focused on helping customers integrate Microsoft technology.

Many of Microsoft's partners do offer such services. Adams said he was not aware what, if any outreach, Microsoft has done to let partners know of its plans.

"I've not had any deep conversations with any of the different partners," he said.

HP, though, will be involved in the Energizer deal. Microsoft plans to serve Energizer primarily through the same means it handles its own operation, which has 92,000 users and more than 300,000 PCs. HP is part of that, helping to handle support and managing call centers that field help queries from Microsoft workers. HP will provide similar services to Energizer, Adams said.

A limited amount of Microsoft workers will be placed at Energizer locations, Adams said, though most of the work is designed to be handled remotely, he said.

It is unclear how far Microsoft might take the effort. Although Microsoft could expand the project and eventually move deeper into the IT services realm, the Energizer deal could also be a precursor to Microsoft expanding its efforts around "software-as-a-service." Today, only a limited array of Microsoft software is available on a hosted basis, primarily through partners.

In an interview on Wednesday, Microsoft Chairman Bill Gates told CNET that he expects over time that there will be a shift with more businesses wanting to have others host their software off-site.

"Clearly, we want to accommodate both models and give people even the flexibility if they want to switch from one approach to the other approach," Gates said.
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