Office 365 Divides Channel Partners Into Four Cloud Camps

June 21, 2011

3 Min Read
Office 365 Divides Channel Partners Into Four Cloud Camps

By samdizzy


As Microsoft prepares to launch Office 365 on June 28, the forthcoming cloud suite seems to be dividing channel partners into four camps — including (1) true believers, (2) classic resellers, (3) curious observers and (4) staunch critics.

The seeds for this blog post were planted while I attended several recent cloud and managed services conferences — including Ingram Micro Cloud Summit and TruMethods Schnizzfest — which combined to attract more than 400 MSPs, TalkinCloud estimates.

On the technology front I see real promise for Office 365. My best guess: Assuming it works as advertised, Office 365 will catch on with large enterprises that want Exchange Online, SharePoint Online and other SaaS applications. But the path to Office 365 is paved with potential speed bumps and questions. Plenty of customers are skeptical following mixed experiences with Microsoft BPOS (Business Productivity Online Suite), the Office 365 predecessor.

Sorting Out the Channel

Generally speaking, Office 365 seems to be driving channel partners into four camps…

1. True Believers: Those who plan to promote the SaaS applications to end-customers, focusing aggressively on consulting and integration revenues in addition to basic recurring revenue opportunities.

I think the channel media underestimates the true believer audience. Nearly 30 percent of Talkin’ Cloud 50 survey participants already offer Microsoft BPOS to customers, so I suspect those partners — and plenty more — will promote Office 365 to customers. You can bet Microsoft will mention Office 365 true believers during the Microsoft Worldwide Partner Conference, which starts July 10 in Los Angeles.

Already, Microsoft has started to promote more than two-dozen Office 365 partners to end-customers. Also, Microsoft is putting more than 60 cloud partners in the spotlight.

2. Classic Resellers: Think of these folks as resellers who are offering Office 365 as a check-mark service to end-customers. These classic resellers don’t plan to make a living off Office 365. Nor do the resellers plan to offer heavy Office 365 consulting services. Instead, the simple strategy is to be a reseller agent as a way to increase customer stickiness.

3. Curious Observers: I think this is the biggest camp at the moment. During the Ingram Micro Cloud Summit and TruMethods Schnizzfest, I heard from scores of MSPs that weren’t all that interested in Office 365 — at least not yet. But those MSPs were certainly eager to learn about Microsoft vs. Google cloud strategies. The curious observer camp wants to offer customers informed cloud opinions and guidance — without necessarily reselling Office 365.

The curious observer camp is both a risk and an opportunity for Microsoft. Similar to undecided voters in a presidential election, I think curious observers could make-or-break Microsoft’s cloud strategy over the long haul.

4. Staunch Critics: I think this is a small but vocal camp. Here, you’ll find those who feel alienated because Microsoft won’t permit partners to manage end-customer cloud billing, Sure, there are signs that distributors, cloud syndicates and cloud aggregators may ultimately assist VARs and MSPs with the end-customer billing opportunity. But some VARs and MSPs — a vocal minority — won’t forgive Microsoft for withholding cloud billing capabilities from the partner channel.

Next Moves

How will each camp evolve? Which camps will grow and which will shrink? We’ll be sure to share updated observations and insights after Office 365 debuts on June 28.

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