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 Channel Futures

Cloud


Microsoft’s Roskill: How Our Clouds Beat Amazon, Google Apps

  • Written by samdizzy
  • July 11, 2012

How is Office 365 performing with channel partners moving into cloud services? And how should Microsoft channel partners most effectively compete with Google Apps and Amazon Web Services (AWS) in the cloud market? Microsoft Channel Chief Jon Roskill offers some clues and updates from Worldwide Partner Conference 2012 (WPC12).

First, a confession: I missed a face-to-face sit-down with Roskill (sorry about that, Jon) because of my own logistics nightmare. But Roskill was kind enough to answer my questions over email. Here’s the discussion…

Office 365 Partner Revenues

TalkinCloud: In the traditional software market, partners influence roughly 90 to 95 percent of Microsoft’s annual revenues. But in the world of cloud services — where Office 365 and Windows Azure are emerging — what percentage of revenues do channel partners influence?

Roskill: While we’re not quite ready to share that specific revenue number, we are excited about the partner momentum in the cloud and expect it will only increase with the announcement of Office 365 Open during Kurt DelBene’s keynote.

Other related data points you might find interesting:

  • We saw a 98 percent increase in the number of partners what have signed the Microsoft Online Services Partner Agreement (MOSPA) in FY12.
  • 7,000+ partners actively sell Microsoft cloud services every month, more than doubling the monthly reach of partners that sold in the last 12 months.
  • 700+ new partners every month begin selling Microsoft public cloud services.
  • Deals that have partners attached result in larger deal sizes and deploy faster (so it is in both our interests to attach partners whenever possible).
  • Lowes, The Hilti Group and Origin Energy are the latest customers to choose Office 365. This is in addition to previously announced customers such as JetBlue, Patagonia, the American Heart Association, and Campbell Soup Company. Also, Accenture has more than 200,000 seats deployed on Office 365.

Office 365 First-Year Progress

Talkin’ Cloud: Office 365 (the SaaS platform offering Exchange Online, SharePoint Online and Lync Online) turned one year old in June 2012. Where did Office 365 show the greatest progress, and in what areas is Microsoft hoping to see/deliver more improvements? Also, how are Office 365 syndication services performing?

Roskill: Office 365 is on track to be one of the fastest growing business offers in Microsoft’s history. And small businesses are fueling this growth

  • Today, more than 90% of Office 365 customers are small businesses with fewer than 50 employees. Syndication partners have been a great way for us to reach this audience.
  • More than 40 of the Interbrand 100 have chosen our productivity cloud service and are reporting impressive results.
  • Office 365 partners are active and engaged. Three out of every four subscriptions are deployed by partners (including syndicators).

Office 365 Marketplace

Talkin’ Cloud: The Office 365 Marketplace seeks to link channel partners and Office 365 ISVs to end-customers. But the marketplace has been extremely quiet. Is Microsoft taking any steps to generate some noise, excitement and engagement in the marketplace?

Roskill: The product-specific marketplaces based on Pinpoint allow our partners to create catalog entries are a huge value-add for them. It gives business customers a single, trusted source for finding Microsoft technology experts and their software applications and professional services.

We’ve actually seen great traction overall for Pinpoint:

  • Analytics show that customers spend an average of six minutes on a partner’s profile, and view 3-4 pages during any given website visit.
  • Partners who have a complete profile are 10 times more likely to receive new customer prospects than those without.
  • On average, partners report that 45 percent of inquiries are from customers who are ready to purchase, and more than 30 percent of all customer RFI forms sent through Pinpoint result in an actual sale with an average transaction value of US $16K.
  • There are 80,000 partners listed worldwide.
  • The Pinpoint catalog contains 22,000 software application listings worldwide.
  • The Pinpoint catalog contains 33,000 professional services worldwide.
  • In FY12 there were over 7 million visits to Pinpoint. We expect more than 11 million visits this year.
  • Each month, Pinpoint receives 550,000 unique visitors.
  • More than 187,000 customer inquiries are submitted to partners via Pinpoint each month.
  • And perhaps most importantly, Microsoft passed more than 1M leads to partners through Pinpoint!

Surface Tablets and Cloud Computing

Talkin’ Cloud: When Microsoft Surface tablets running Windows 8 and/or Windows RT arrive in late 2012, how might they integrate with Office 365 and Windows Azure applications? Any special integrations that will make Microsoft- and PC vendor tablets a better choice than Apple iPad and Google Android-powered tablets?

Roskill: We are not ready to discuss those kinds of specifics yet, but we believe that Windows 8 even on its own stands to deliver significant opportunity for both consumers and businesses. It’s Windows, re-imagined for this new world of tablets, phones and cloud, and it will enable a wave of new cloud-based applications that drive access and intelligence across multiple devices. Already, the Windows 8 Developer Preview has received more than 300 million downloads.

Microsoft vs. Google Apps, Amazon Web Services

Talkin’ Cloud: Microsoft has been locked in a cloud price war with Google Apps and Amazon Web Services. What can Microsoft and channel partners do to shift the cloud conversation from price to value and innovation?

Roskill: There are two pretty significant things that set us apart from our competitors: Our expertise and our capabilities.

1. Office 365 v Google Apps

  • Office 365 is a comprehensive solution that leverages more than 20 years of experience providing leading productivity solutions to businesses of all sizes.
  • Office 365 offers far more capabilities than Google Apps, including world class security, privacy and compliance.
  • Google Apps cost $5 per user per month, while Office 365 costs just $6 per user per month and delivers the enterprise-grade capabilities businesses require with the familiarity of Office in a cloud service backed by Microsoft and some of the best partners in the world.
  • Google Apps requires compromise. As an advertising company, Google lacks the incentive or expertise to effectively compete in this space.

2. Azure v Amazon

Azure is more than just hosted services; it’s complete management of your application, website or VM experience in a flexible platform that grows with you.

  • Trustworthy and Credible: Microsoft has proven expertise in providing enterprise-ready services built on years of experience in offering cloud services.
  • Flexibility and Control: Windows Azure enables the combination of on-premise and cloud resources in solving business problems. It gives developers the freedom to extend and take advantage of on-premise resources through the cloud using Windows Azure Virtual Network and AppFabric, while leaving sensitive data on premise.
  • Broader Set of Offerings: Windows Azure provides developers with broader offerings that go beyond web tier with the SQL Azure technology platform, Windows Azure AppFabric, and the composite application model.

Closing Thoughts

Talkin’ Cloud certainly owes Amazon and Google equal time on this topic. And I also have to do a bit of a reality check on Roskill’s claims. The clearest one involves the Office 365 Marketplace — where Roskill shifted the conversation to the broader Pinpoint partner locator rather than the more targeted Office 365 Marketplace within Pinpoint.

But… I appreciate Roskill’s time and the dialog.

Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Business Models Cloud Leadership Sales & Marketing

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