Microsoft Channel Chief Discusses Cloud Billing Debate (Again)
For the third time in recent weeks, Microsoft Channel Chief Jon Roskill says the software giant is listening closely to the cloud billing debate. By addressing the topic multiple times, I think Roskill is offering a clue that Microsoft may adjust some channel partner cloud billing policies down the road.
In a January 13 blog entry, Roskill mentions the debate — which involves
- Microsoft directly billing cloud end-customers
- Some Microsoft VARs and managed services providers (MSPs) strongly requesting their own end-customer cloud billing capabilities.
Roskill mentioned the debate during a phone interview with TalkinCloud earlier this month, and he also brought it up during a recent town hall meeting with partners.
To be sure, Roskill is covering a range of topics these days — and he says the Microsoft Partner Network channel program has strong momentum. Still, a small but vocal portion of Microsoft’s channel won’t let the cloud billing debate die. And neither will channel bloggers. Channelnomics founder Larry Walsh has been on a crusade about the topic this month, and in December 2010 readers of MSPmentor (TalkinCloud’s sister site) shared their concerns about Microsoft’s cloud billing strategy.
The topic also popped up during the ConnectWise IT Nation conference in November 2010, where many MSPs said they will refuse to support third-party cloud services that directly bill end-customers.
In short, Microsoft faces four fundamental challenges on the cloud billing front.
First, Microsoft must get Office 365 — the cloud successor to Business Productivity Online Suite — out the door. I suspect Microsoft really wants to “control” the Office 365 launch, so allowing small VARs to directly bill cloud end-customers isn’t a near-term priority. (Again, that’s just my personal view.)
Second, Microsoft must face technical facts. On the one hand, Microsoft says allowing small VARs and MSPs to bill for Microsoft’s cloud services involves some key technical challenges. On the other hand, Google Apps already offers end-customer billing capabilities to channel partners, so Microsoft’s claims don’t hold up in my mind.
Third, Microsoft is quietly working with Parallels on so-called syndicated cloud services. The effort will allow massive service providers — for instance, telecom companies and cable companies — to directly bill end-customers for Microsoft’s cloud services. There are signs that smaller VARs and MSPs may eventually leverage the work. But at this point the Parallels relationship focuses on big service providers.
Fourth, Microsoft is trying to recruit at least 144 people to assist with its cloud computing development and marketing strategies. So, adding “new” priorities to existing products and services could be challenging in the short-term (at least in my mind).
Prediction: Microsoft Will Solve This
During my conversation with Roskill last week, I ask if Microsoft’s channel team was pounding on the table to give partners some end-customer billing capabilities. I also asked if there was a disconnect between Microsoft’s channel team, Microsoft’s corporate leadership, and Microsoft’s IT development team.
Roskill downplayed potential disconnects and said some software tests related to cloud billing would be coming — though he did not confirm a specific end-customer billing capability for partners.
The good news: Roskill is listening to the channel and participating in the discussion. I suspect he’s merely buying time right now — posting blogs and assuring partners that he’s heard their feedback. Microsoft’s bigger priority, I suspect, is getting Office 365 out the door in a reliable, scalable offering sometime this year.
Think about it this way: If Office 365 — featuring the latest versions of Exchange Online, SharePoint Online and Lynk — doesn’t work as advertised, partners aren’t going to worry about the end-customer billing issue.
Assuming Office 365 functions well during its launch, I suspect the cloud billing capability for channel partners will follow sometime thereafter — maybe in late 2011 or early 2012.
Either way I think it has to happen. Some key channel partners are demanding the capability. Plus, Google already offers the capability.