Microsoft is set to change the way that organisations handle upgrades. The company has teamed up with Dell and Vintela in an attempt to cut the people-hours that are spent on software support.

"Traditionally, companies like HP and IBM have aimed to support their customers on upgrades by throwing people and methodology at the problem, on a bill-per-hour basis," said Microsoft's Kirill Tatarinov, SMS 2003 boss and corporate vice president of the Enterprise Management Division, Microsoft. "We can solve the problem with software."

The software was jointly launched during Bill Gates' keynote here in Copenhagen IT Forum this morning.

Gates told the audience: "Historically, IT budgets made room for innovation because hardware prices came down. But to make room for great innovation in future, with new processes - things like tablet PCs taking on a role, software for understanding customers, forecasting - to force those horizons, we have to take IT costs out, so we can free up budget for that new work. That means eliminating complexity."

He then kicked off a demo of a simultaneous upgrade of 100 PCs from a variety of early versions of Windows to Win XP SP2, installing the new disk image for each machine and restarting. The demo assumed that the hour-long backup and restore cycle would be done separately, for speed; it took eight minutes.

The fact is (said one senior Microsoft product manager, asking not to be named) is that Microsoft is "coming from behind" on this. "The standard approach is with methodology and personnel. But with automated software, we think we can undermine the revenue stream those big companies get from upgrade work."

Gates said: "In the past, the solution was to send expensive people by air to remote sites to carry out these upgrades. This way, it is entirely automated, and operated from a central administrative office."

Tatarinov said that the amount of saving available was huge. "The numbers we are observing, in reports from Gartner, Dataquest, is that business is spending $140bn dollars on IT management each year. Only 6 percent of that is software; the rest is billable hours, and that figure will grow to $200 bn by 2008."

The software was developed in partnership with Dell; Microsoft had already announced one partnership with the same company at IT Forum. At the same time, a version of the system was developed for non-Windows platforms by Vintela.

Peter Morowski, Dell's vice-president of software, said that the technology was "not in any way" proprietary. Microsoft would make this available as part of MOM 2005 and SMS 2003 to any hardware builder, and Vintela would make it available for Unix, Linux and Apple Mac platforms.

"Our customers were asking 'why do I have to manage my hardware separately from the software stack, with every hardware vendor proiding proprietary tools; they'd go to Dell web site, get new patches, then run Dell tools to update; then go off and update software?' and a year ago, we promised to devise a solution. We've done that."

"Microsoft Operations Manager 2005 is a vital tool for full-cycle management of Windows resources," said David Hamilton, director of the Windows and Enterprise Management Division at Microsoft. "Vintela’s ability to extend those capabilities to non-Windows systems will provide an added value to Microsoft customers, allowing MOM to realise an expanded reach and greater value. This demonstration by Vintela fits very well into the Dynamic Systems Initiative (DSI)."

The strategic relationship between Dell and Microsoft is not being restricted to the partners - but this isn't in any way altruistic. If it works, it would, at a stroke, undercut a major revenue stream for more traditional systems suppliers.

Tatarinov said that "several other suppliers" had approached, or responded to an approach from, Microsoft, but none had signed up for the new technology. "We wouldn't expect to see any announcements for another year," he estimated.