https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2021 MSP 501 Application
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2021 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • Analytics
    • Artificial Intelligence
    • Cloud
    • Data Centers
    • Desktop
    • IoT
    • Mobility
    • Networking
    • Open Source
    • RMM/PSA
    • Security
    • Virtualization
    • Voice/Connectivity
  • Strategy
    • Back
    • Best Practices
    • Business Models
    • Channel 101
    • Channel Programs
    • Channel Research
    • Digital Transformation
    • Diversity & Inclusion
    • Leadership
    • Mergers and Acquisitions
    • Sales & Marketing
    • Specialty Practices
  • MSSP Insider
    • Back
    • Business of Security
    • Cloud and Edge
    • Endpoint
    • Network
    • People and Careers
    • Training and Policies
  • MSP 501
    • Back
    • 2021 MSP 501 Application
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Our Sponsors
    • From the Industry
    • Content Resources
    • COVID-19 Partner Help
    • Galleries
    • Podcasts
    • Reports
    • Videos
    • Webinars
    • White Papers
  • EMEA
  • Awards
    • Back
    • Excellence in Digital Services
    • 2021 MSP 501
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Partners Evolution
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
  • Channel Mentor
    • Back
    • Channel Market Intelligence
    • Channel Educational Series
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Digital Service Providers
  • Cloud Service Providers
  • CHANNEL PARTNERS ONLINE
 Channel Futures

Channel Programs


Is Microsoft Committed to Channel Partners?

  • Written by The VAR Guy 1
  • March 24, 2011
And so it begins... Microsoft has kicked off an aggressive research and public relations campaign to convince editors and bloggers -- even the anonymous ones -- that the company remains committed to channel partners. The Microsoft PR blitz arrives as some skeptics worry Microsoft's cloud computing strategy undermines channel partners. So what does The VAR Guy think?

And so it begins… Microsoft has kicked off an aggressive research and public relations campaign to convince editors and bloggers — even the anonymous ones — that the company remains committed to channel partners. The Microsoft PR blitz arrives as some skeptics worry Microsoft’s cloud computing strategy undermines channel partners. So what does The VAR Guy think?

Microsoft won’t abandon the channel. Simply put: Roughly 95 percent of Microsoft’s annual revenues involve channel partner sales. Surely, Microsoft is not going to walk away from that lucrative revenue pipeline. Still, the next two years or so will involve some awkward moments between Microsoft and its channel partners, mostly because of cloud computing.

The Numbers

Let’s start with Microsoft’s latest data points, which involve an IDC white paper filled with such research stats as:

  • Members of the worldwide Microsoft partner ecosystem generated local revenues for themselves of $580 billion in 2010, up from $537 billion in 2009, according to IDC research.
  • The IDC study estimates that for every dollar of revenue made by Microsoft in 2009, local members of the Microsoft ecosystem generated revenues for themselves of $8.70.
  • Partners that invested in more difficult or a greater number of Microsoft competencies enjoyed 68 percent larger deals and 28 percent more revenue per employee, compared with partners that invested less, IDC found.

Note: Microsoft commissioned the IDC study — which means the software company paid IDC to produce the research, a common practice in the high-tech industry.

Opportunities, Challenges and the Cloud

At first glance, the stats above show continued growth for those Microsoft channel partners that continually educate themselves about new technologies and competencies. Offerings like Hyper-V, SharePoint and SQL Server come to mind.

But heck, can we talk about the elephant in the room? It’s called cloud computing.

Admittedly, some VARs have fear, uncertainty and doubt about Microsoft’s cloud partner program. To be sure, some VARs and MSPs are seeking ways to compete with Office 365 — the forthcoming successor to BPOS. Office 365, expected to debut July 1 or sooner, will include Exchange Online, SharePoint Online, Lync Online, Office Web and more. Other partners want to control end-customer cloud billing, a capability Microsoft doesn’t offer.

Long Term: Microsoft Will Get It Right

Microsoft’s cloud strategy isn’t perfect. And that end-customer cloud billing debate won’t end until Channel Chief Jon Roskill potentially bows to partner pressure and makes some changes.

Still, let’s keep things in perspective. Even if you question the IDC research numbers, one startling fact remains: 95 percent of Microsoft’s annual revenue involves channel partners. There’s no way Microsoft is going to walk away from that revenue stream, nor will Microsoft abandon the partners who produce it.

Short term, Microsoft may lose some partner enagements as some VARs seek white label, brandable alternatives to Microsoft’s cloud services. But don’t forget: Some VARs are betting on Microsoft’s cloud services right now. In fact, Microsoft’s top 10 U.S. cloud partners have moved more than 1,000 customers to BPOS. That’s worth noting.

For those who have written off Microsoft remember this: For its quarter ended Dec. 31, 2010, Microsoft announced record Q2 revenue of $19.95 billion and net income of $6.63 billion. Roughly 95 percent of that revenue — a hefty $19 billion — came from the channel.

That’s too big for anyone, including Microsoft, to walk away from. Microsoft remains committed to the channel. There will be some pain points as cloud computing takes hold. But Channel Chief Jon Roskill will find the right formula for success. Or Microsoft’s revenues will be at risk.

Sign up for The VAR Guy’s Weekly Newsletter, Webcasts and Resource Center. Follow The VAR Guy via RSS, Facebook and Twitter. Follow experts at VARtweet. Read The VAR Guy’s editorial disclosures here.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Channel Programs Cloud Leadership

Related


  • CP-Expo-Logo-1050x618 web
    Day 2 at Channel Partners Virtual Complete, with a Packed Day 3 Ahead
    Get some sleep tonight. Our content isn't fading out on Day 3 of Channel Partners Virtual. Here's what to expect.
  • Multi-Cloud VMware
    Multi-Cloud: Strategy or Inevitable Outcome? (or both?)
    VMware’s approach to multi-cloud can help at any stage--wherever your business is at any given moment.
  • Partner program gears
    Pluribus Networks Launches Expanded, Simplified Partner Program
    The expanded program shifts from four to two tiers to simplify engagement.
  • Security Merger
    Thycotic-Centrify Merger Poses Potential Threat to PAM Leader CyberArk
    PAM technology is more relevant than ever with widespread remote work.

7 comments

  1. Avatar Jim Locke March 25, 2011 @ 4:40 pm
    Reply

    While I agree that they will iron things out in the long run, my company lost one of its substantial long term clients to Microsoft and its BPOS/Office 365 solution. According to this high profile non-proft, Microsoft offered them $1M (yeah, as in million) in licensing and $1M donation for implementation which they couldn’t turn down. It was an offer they couldn’t refuse. When I brought it to the attention of the local Microsoft team, there was no denial of the clients claim. Instead, I was urged to embrace the Office 365 and learn how I could make it work for my firm to make up for the client I lost. Bottom line: I lost a substantial client that I had for years to Microsoft, my business “partner.” So while I am offering Microsoft cloud solutions, they will not be coming directly from Microsoft until I know all the bugs are worked out.

  2. Avatar The VAR Guy March 25, 2011 @ 7:35 pm
    Reply

    Jim: The VAR Guy can’t comment on your specific experience, but he has heard about special no-cost cloud deals to colleges plus Microsoft paying selected ISVs to port their applications to the Windows Azure cloud. Based on our previous dialog, The VAR Guy trusts the accuracy of your comment. Let’s hope Microsoft seeks to minimize cloud channel conflict going forward… …

    And if there are BPOS partners who want to describe successful cloud engagements The VAR Guy is all ears.

    -TVG

  3. Avatar Jim Locke March 25, 2011 @ 8:28 pm
    Reply

    Again, I am confident that Microsoft will work the bugs out of the system. I’ll sign up for the Office 365 partner program but will just hold off on implementing it (and sell other Microsoft-based cloud soultions) until I am comfortable that these issues are worked out.

  4. Avatar The VAR Guy March 26, 2011 @ 12:37 pm
    Reply

    Jim: The VAR Guy thanks you for the insights. As Microsoft’s cloud strategy evolves our resident blogger hopes you’ll share more perspectives here.
    -TVG

  5. Avatar Cesar March 28, 2011 @ 2:00 am
    Reply

    The main question is, who owns the client? Microsoft position now is, give me you customer and I will pay you a low fee. For sure I will not jump in that boat. But it could be, keep your customers and use our services to serve them better. I think that would make any partner company much more interested.

  6. Avatar Mark Crall March 28, 2011 @ 7:16 pm
    Reply

    VAR Guy says, “Other partners want to control end-customer cloud billing, a capability Microsoft doesn’t offer.”. I think Cesar is one of those “Others” and they are not a minority. When you ask if Microsoft is still committed to channel partners, I guess it depends on your definition of what a channel partner is exactly. If being a “Partner of Record” is an OK definition then I guess things are just peachy. Am I beating a dead horse here?

    Cloud computing is not the only elephant in this room. I suspect Microsoft’s hesitation to solve this core issue is opening up immense opportunities for Microsoft competitors whom have already embraced the technologies that enable VARs to aggregate cloud and customer premise services under the VARs brand and control.

  7. Avatar The VAR Guy March 29, 2011 @ 1:20 pm
    Reply

    [email protected]: The VAR Guy appreciates your perspectives and insights.

    [email protected]: Yes, Microsoft rivals seem to be everywhere in the cloud market. The VAR Guy is surprised Microsoft hasn’t swallowed its pride by now and solved the cloud partner billing issue… It could wind up becoming a distracting conversation at Microsoft Worldwide Partner Conference in July 2011…
    -TVG

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Channel Partners Virtual 2021 Is Here — Take Advantage of the Amazing Content
  • IBM Leans on Partners to Bring Cloud Satellite Services to Life
  • Welcome to the 2021 MSP 501 — Apply Now!
  • IGEL Integrates Amazon WorkSpaces DaaS with Its Virtual Endpoint OS

Galleries

View all

From The Second City: How to Use Improv as a Business Tool

March 3, 2021

Industry Perspectives

View all

5 Ways XDR Can Improve Operational Efficiency for MSPs

March 4, 2021

Multi-Cloud: Strategy or Inevitable Outcome? (or both?)

March 3, 2021

Backup Vulnerability: 4 Targets Hackers Might Utilize to Infiltrate Your Backup Solution

March 2, 2021

Webinars

View all

A Partner’s Perspective on Channel Success in 2021

March 23, 2021

XDR and Why it Matters to MSPs

March 24, 2021

Top Security Trends Impacting Technology Security Providers In 2021

March 25, 2021
  • 1

White Papers

View all

Why Fortinet for my MSSP?

March 2, 2021

Small and Mid-Size Business Security: 4 Steps to Success

March 2, 2021

How SMBs Can Secure Endpoints and Remote Workers for the Long Haul

March 2, 2021

Upcoming Events

View all

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

Videos and Fastchats

View all

FASTCHAT: How SOAR Eliminates Security Challenges and Elevates Service Provider Revenues

January 6, 2021

Happy Holidays from Channel Partners & Channel Futures!

December 21, 2020

FASTCHAT: How Old, Unpatched Technologies Are Creating New Security Threats for MSPs and Their Customers

December 3, 2020

Twitter

ChannelFutures

Chinese hacker group #HAFNIUM exploits critical @MSFTExchange Server vulnerability, could impact thousands.… twitter.com/i/web/status/1…

March 7, 2021
ChannelFutures

Our latest #Cybersecurity Roundup highlights #CPVirtual, @Huntresslabs, @Entrust_Corp and @InsightEnt.… twitter.com/i/web/status/1…

March 5, 2021
ChannelFutures

RT @Channel_Expo: A HUGE thank you to our amazing #CPVirtual sponsors and exhibitors! 👏 @ATTBusiness @DellTech @8x8 @lumentechco @telarus @…

March 5, 2021
ChannelFutures

.@okta acquiring rival @auth0 in $6.5 billion all-stock transaction. #security dlvr.it/Rtzwdp https://t.co/4LvHCJuwsR

March 4, 2021
ChannelFutures

.@MicrosoftTeams features are coming to @MSFTDynamics365, the company announced at @MS_Ignite. #MicrosoftIgnite… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

.@PreciselyData acquired by Clearlake Capital, @TAAssociates. #digitaltransformation dlvr.it/RtzbKg https://t.co/1rNYnTScxq

March 4, 2021
ChannelFutures

Thanks for attending #CPVirtual. Here's a Day 3 wrap and a look ahead to #CPExpo Homecoming in November!… twitter.com/i/web/status/1…

March 4, 2021
ChannelFutures

.@Veeam announces six annual Impact Partner Awards, with @SHI_Intl, @LogicalisUS, more. #cloud… twitter.com/i/web/status/1…

March 4, 2021

MSSP Insider

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Channel Partners Online

Want more? Find more channel news and analysis on our sister site, Channel Partners.

Media Kit And Advertising

Want to reach our audience? Access our media kit

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Online
  • Channel Partners Events
  • MSP 501
  • MSSP Insider
  • IoT World Today
  • Webhostingtalk

WORKING WITH US

  • Contact
  • About us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X