Microsoft Office 365 and Windows Azure: Cloud Partners Connect Dots

Microsoft Office 365 and Windows Azure: Cloud Partners Connect Dots

Microsoft's cloud platforms (Office 365, Windows Azure, Dynamics CRM Online and Windows Intune) will gain more cross-platform synergies for channel partners. Josh Waldo, senior director, cloud partner strategy, explains how.

What if Microsoft's cloud platforms (Office 365, Windows Azure, Dynamics CRM Online and Windows Intune) were more closely aligned with one another for channel partners? Those steps are occuring, thanks to Microsoft team members like Josh Waldo, senior director, cloud partner strategy.

During a wider-ranging Dec. 14 conversation with Talkin' Cloud, Waldo described multiple cloud partner program and technology milestones at Microsoft. If you take a long-term view and listen closely to Waldo, it's getting easier to see how a VAR, MSP or integrator will connect the dots between each of Microsoft's cloud platforms. 

Here's a recap of the conversation with Talkin' Cloud's perspectives woven in:

1. Cloud Progress and Challenges: Waldo was previously in Microsoft's U.S. SMB organization, so he's familiar with Small Business Server and other solutions that generated VAR profits for the past decade. These days, Waldo's goal is to help partners across the globe -- of all shapes and sizes -- to adopt Microsoft's public cloud solutions. While the cloud is going mainstream, Waldo concedes that a large number of Microsoft's traditional channel partners are still trying to figure out recurring revenue business models and profit models.

"The number of [partners] selling Office 365 and deploying Office 365 has doubled year over year," said Waldo. "I think that's an impressive thing to see happen, especially when you consider we're on version 1.0 of Office 365. When you get into examples of success, the most successful partners are changing their models. They are moving from break-fix and one-time big project fees to annuity streams."

Waldo also points to Microsoft's hosting partners for signs of success. He notes that numerous hosting firms are succeeding with hosted Exchange, SharePoint and more. He also points to a channel pyramid where break-fix partners are on the bottom with project and integration services; MSPs are in the middle with remote monitoring and ongoing management services; and channel partners that have some of their own intellectual property are on the top of the pyrapid. This could involve a VAR or an MSP that's done some custom code development for SharePoint, Office 365 or Azure in the cloud, for instance.

Talkin' Cloud's Spin: I think Waldo's pyramid is accurate but I'm trying not to hype recurring revenues.

For most near-term Microsoft partners, I think the recurring revenue opportunity is gravy. The real meat and potatoes, short term, remains migration projects where VARs and MSPs profit from on-premises Exchange and other migrations to the cloud. Over a window of two or three years, those partners will gradually see their annuity revenue streams grow nicely. And perhaps five years out, those annuity dollars will be sizeable -- thanks to each completed project continuing to throw off recurring revenue cash.

2. Office 365 and Windows Azure -- Killer Combo?: Waldo hinted that the next version of Office 365 will have enhancements for software developers. He also noted that some partners, including a key IT service provider in Europe, have connected the dots between Office 365 and single sign-on capabilities offered by Active Directory in Windows Azure.

"We are thinking of an end-to-end cloud strategy for our partners. All of these things -- Windows Azure, Intune, Office 365, Dynamics CRM Online -- are starting to mature. The cool value proposition for an MSP or ISV is the ability to deliver it all as integrated solutions."

Also, he noted that Office 365 Open -- which allows channel partners to manage end-customer billing -- is still on track to arrive during Microsoft's current fiscal calendar, which ends in June 2013.

Talkin' Cloud's Spin: Microsoft is coordinating and enhancing a lot of moving parnters here. Like many partners, I believe Office 365 Open should have arrived sooner, especially since Google Apps for Business already offers those types of billing capabilities to channel partners.

3. Windows Intune: This is Microsoft's PC cloud-based PC management and security platform for Windows devices, as well as Apple iOS and Google Android devices. Waldo said a "solid number of partners" in the SMB market and a growing number in the enterprise use Intune to manage multiple devices in addition to Windows. And more enhancements are coming. "Windows Intune has such a fast interval of releases; it blows your mind how fast [the enhancements] are coming online."

Talkin' Cloud's Spin: Windows Intune has, indeed, caught on with some channel partners. But SMBs and enterprises are going multi-platform. Without Linux and Apple Mac OS X support, I think Windows Intune will be limited to the Microsoft-centric world of channel partners. And pure Microsoft shops are getting harder to find.

4. Sort of Like Client-Server All Over Again: The shift to cloud computing is a bit similar to the client-server revolution from the 1990s. At that time, Waldo was at Oracle, tracking customer refrences for ERP deployments. Over at Microsoft, the Windows NT Server, BackOffice, Windows 95 and Office teams were busy connecting the dots between their various server and client technologies.

That scenario has somewhat repeated itself today, as Microsoft connects the dots between its public cloud services and today's mobile and desktop devices. 

Talkin' Cloud's Spin: We agree with that analogy. But there are some differences worth noting. On the desktop in 1995 or so, Microsoft essentially grew to have a monopoly position. On the server, Windows NT was still in its infancy but sales were growing fast. These days, Microsoft still has strong server and desktop market share but the real growth is in tablets and smartphones.

Overall, I think most pundits continue to underestimate Microsoft's cloud strategy. The company has one of the most complete cloud stories, and the leap forward from BPOS (Business Productivity Online Suite) to Office 365 in mid-2012 has been quite successful, I believe.

Still, some partners remain wary of Microsoft's cloud strategy. The wait for Office 365 Open continues. And stronger synergies between Office 365, Azure, Intune, and Dynamics CRM Online must emerge.

By mid-2013, I think Microsoft will have addressed those questions. But how many partners will take the time to embrace and act on Microsoft's message? That remains to be seen.

TAGS: Case Studies
Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.