Microsoft SharePoint taking business by storm

Microsoft's SharePoint Server is on a billion dollar juggernaut to potentially become the next must-have technology, offering companies tools for building everything from collaborative applications to Internet sites and potentially handing Microsoft its next cash cow.

"I have not seen anything like this since the early days of [Lotus] Notes," says Mike Gotta, an analyst with the Burton Group. In those days, corporate users were enamored with a shiny new technology that seemed to have infinite uses. "The talk [around SharePoint] is getting strategic now and people are talking about it as a middleware decision," Gotta says.

Microsoft Office SharePoint Server (MOSS) 2007 is the fastest growing product in the company's history and seems to have as many uses as a Swiss Army knife. Its six focus areas are collaboration, portal, search, enterprise content management (ECM), business process management and business intelligence.

Just last month, Microsoft added a hosted alternative to fuel adoption. There is a "perfect storm," observers say, around SharePoint in terms of the popularity of Web-based computing, demand for less-expensive ECM and portal tools, collaboration technology and integration around Microsoft's Office suite.

The attention is a wake up call for competitors, especially IBM/Lotus, as SharePoint could pull customers to other Microsoft software because it is closely integrated with Microsoft's unified communications stack, its e-mail server, Office and Office applications including back-end file sharing repositories for Excel, Word and PowerPoint.

SharePoint was first introduced in 2001 to less than lukewarm reviews as SharePoint Portal Server. In 2003, a stripped down version was offered for free as part of Windows Server 2003 R2, which made it easy for users to test drive the software and soon end-user created team worksites began popping up all over corporate networks.

In 2008, SharePoint has evolved into the prototypical Microsoft tool -- good enough for small-to-midsize businesses, adaptable to large enterprises, and, most important, plenty of financial opportunities for third-party independent software vendors and systems integrators.

Partners involved in everything from directory management to archiving to single sign-on are reporting that SharePoint is improving their own revenue.

In March, Bill Gates, Microsoft's chief software architect, said SharePoint had passed 100 million licenses sold, had attracted 17,000 user companies, and eclipsed US$1 billion in sales for his company.

Many critics dispute the licensing number but not the message that SharePoint is on fire.

SharePoint, however, isn't without issues that users should consider, including the fact that it does not scale well given the way it stores data in SQL Server, a concern Microsoft is working to answer in the next version likely to ship in 2009.

Or that its social networking tools are considered rudimentary, that SharePoint's portal capabilities still don't measure up to enterprise-class platforms and that the server takes customizations to make it truly sing.

"I think there is going to be some buyer's remorse," Gotta says.

SharePoint does many things, but scaling is not one of them. SharePoint stores everything in SQL Server in what amounts to one universal table, which leads to lots of on-the-wire traffic and a Microsoft recommendation of only 2,000 items per list. By contrast, IBM WebSphere permits hundreds of millions of items per list.

The social networking tools are uninspiring and Microsoft is partnering with NewsGator (feed reader) and Atlassian (wiki) to cover bases, which will lead to inevitable feature clashes as SharePoint evolves.

"Compared to what is out there today, Microsoft's Web 2.0 tools look old and very static and are clunky and difficult to use," says Oliver Young, an analyst with Forrester.