Office 365 Update: Partner Revenues and Phone Support
During a quick-hit, multi-topic interview today, a Microsoft Office 365 product manager described how a cloud partner has already generated more than $350,000 in revenues. We also covered Office 365 phone support options for partners and customers, plus a whole lot more.
The conversation occurred at Microsoft Worldwide Partner Conference 2011 (WPC11) in Los Angeles. Office 365 Director of Product Management Kelly Waldher covered a range of topics with me. They included:
1. The Office 365 Marketplace: The Marketplace, like Office 365, officially launched June 28. In my opinion, Microsoft said too little about the marketplace on launch day. And Microsoft has said far too little about the marketplace here at WPC11. It is, after all, an online store where SaaS partners and consultants can promote their services to end-customers.
True believers apparently include Calinda Software, developer of SocialFactor 365 — a micro blogging system for Office 365 and SharePoint Online. SocialFactor 365 has generated more than $350,000 in revenues since the Office 365 Marketplace launched in beta, according to Waldher. I don’t know if those revenues went directly to Calinda or if the figure includes a revenue split with Microsoft. I also don’t know if the $350,000 figure delivered actual profits to Calinda. I’ll be sure to follow up with Calinda. But in the meantime it sounds like the Office 365 Marketplace does generate revenues for some early partners.
2. Cloud Experience: Waldher has been at Microsoft for six years. He was involved in the original business case for Exchange Online and BPOS (Business Productivity Online Suite). He spent considerable time helping Microsoft to build the Hosted Exchange business before shifting his focus to Office 365.
3. Early Adopters: Since Office 365 launched on June 28, more than 50,000 organizations have signed up to experience the cloud platform. That’s a big number, though it’s hard to qualify if those inquiries are leading to big, paying customers that are using all of the major Office 365 services.
4. Next Enhancements: Microsoft is connecting the dots between Office 365, Windows Intune and Dynamics CRM. All are available in the cloud. But in Microsoft’s calendar Q4, CRM Online will become available as part of the Office 365 platform — meaning that customers can use a single sign up and receive a single bill for Dynamics CRM Online and Office 365. Similar plans are in place for Windows Intune, Waldher said.
- Phone Support Included: Office 365 for the enterprise includes 24×7 phone support for the IT pro. That includes the Office 365 K1 and K2 plans, and the E1 through E4 plans.
- No Phone Support: Office 365 for small businesses and professionals, known as the P1 plan, does not include phone support. Instead, online forums and other community destinations deliver support.
6. Reliability: Office 365’s predecessor, called BPOS (Business Productivity Online Suite), suffered from several outages. I asked Waldher what steps Microsoft took to improve Office 365’s reliability. He mentioned:
- Microsoft completely rearchitected the underlying servers. They were built from the ground up as multi-tenant solutions.
- BPOS had been built on top of 2007 software stack (Exchange 2007, etc.). Office 365 is built on top of the 2010 software stack.
- Microsoft has focused on (A) greater meantime to failure and (B) shorter meantime to resolution. “If we can bring it back up in 30 seconds or less a failure is almost unnoticeable,” noted Waldher.
- The developers who wrote the Office 365 applications are now responsible for running it — meaning that the developers are now entirely focused on making their own programs rock-solid.
- Microsoft made “big investments” in automation and monitoring.
- Office 365 has multiple data centers in North America, Europe (in Dublin and Amsterdam) and Asia Pacific (Singapore and Hong Kong), serving up Australia. There are a minimum of two data centers in each region, ensuring redundancy.
7. Partner Adoption: Microsoft now has 41,000 partners in its cloud ecosystem, up from 16,000 partners at this time last year, Waldher said. Of course, I don’t know how many of those 41,000 partners actually generate significant cloud revenues. But the number of partners kicking Microsoft’s cloud tires is certainly growing.
8. More Than SMB: Although Microsoft has been evangelizing Office 365 for small businesses, Waldher wanted to drive home the point that large enterprises are also adopting Office 365. He pointed to the American Red Cross, which is moving 66,000 users to the cloud suite — though I don’t know how many of the cloud applications the American Red Cross will actually run.
You’ll notice I didn’t cover end-customer billing with Waldher. Some partners remain upset that Microsoft won’t let partners manage end-customer cloud billing. I’ve stopped asking the question because I’m getting a bit tired of getting the same answer (“we’re closely monitoring partner feedback”).
Still, that sticking point is only one piece of the broader cloud conversation. And Waldher gave me direct, concise answers to each of my questions. While some folks are just getting their arms around the cloud, it’s clear that Waldher has been in this piece of the Microsoft business for quite some time. Sharp guy.