Microsoft BPOS: SaaS Debate Continues Among MSPs
The debate continues. Can managed services providers (MSPs) really profit from Microsoft BPOS? Or is Business Productivity Online Suite a SaaS Trojan Horse — allowing Microsoft to grab hold of your customers and never let go? Here are the two most recent sides to the story.
For those arriving late to the debate, BPOS includes Microsoft’s core SaaS applications — Exchange Online, SharePoint Online and Office Communications Online. Some VARs and MSPs think BPOS is a fast way to profit from SaaS. Others worry about slim margins and potentially losing account control to Microsoft.
Keeping Score
The BPOS debate continued today during a SaaS webcast hosted by The VAR Guy (MSPmentor’s sister site).
- On one side of the fence, Rich Anderson, president of Next Level Cafe, said he’s absolutely leveraging BPOS as a SaaS system for his customers. Instead of pitching BPOS as a big profit opportunity, Anderson said Microsoft’s SaaS offerings deliver automation — freeing up solutions providers to focus on higher value-added services. “We’re selling BPOS all over the place,” said Anderson. “Pushing it to our managed services clients, too.”
- On the other side of the fence, Ted Passalacqua, president and CEO of Strategic Micro, firmly stated that he views BPOS as competition from Microsoft, since Microsoft ultimately controls billing, branding and other key variables for BPOS. Plus, Microsoft sells BPOS direct as well.
The BPOS debate won’t be ending anytime soon. On April 8, HTG Peer Groups and ConnectWise will be involved in a private call for about 25 managed services providers. The title: “Making Money with BPOS.” Steve Weiler (Anderson’s business partner at Next Level Cafe) is hosting the call.
Got a Strategy?
Regardless of where you sit, I think MSPs need to spend some time with BPOS. I do see some competitive risks around BPOS, but MSPs can’t afford to simply ignore the Microsoft platform. Whether you partner up with Microsoft or compete with Microsoft in the SaaS market, you’re going to need to communicate clear, consistent recommendations to your customers.
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I can certainly understand the view that BPOS is part of an MSP’s competition, but I don’t think we can afford to ignore it.
Any type of IT service provider has to be looking after the best interests of the client and in some cases BPOS will be the best option. If an MSP implements a less suitable solution for a client based on how much money the MSP will make or to lock a client in and not expose them to another vendor, they are not doing the right thing by the client. It is likely to come back a bite the MSP, anyway, when a client starts asking questions about BPOS and why their trusted advisor, the MSP, did not raise it with them.
I think MSPs are ultimately best served by offering the most appropriate solutions to their clients, even if it means making a little less money on a particular deal. Happy clients talk and unhappy clients talk even more.
Joel: We certainly agree that MSPs need to have an informed opinion if/when customers come asking about BPOS. But I suspect the conversation will be more about how to best managed email, collaboration, etc. That provides an opportunity to consider a range of on-premises and hosted options — from a range of SaaS providers. It’s not just a Microsoft world anymore.
-jp
Hey Joe, is there a recorded version on the webinar? I got sucked into a meeting yesterday and missed it.
Thanks, Jason
Hey Joe, is there a recorded version of the webinar? I got sucked into a meeting yesterday and missed it.
Thanks, Jason
Jason: Visit http://www.thevarguy.com/events on Monday, April 12. By that time there should be a link to the recorded (archived) event. Thanks for your interest in our webcasts.
-jp
Most MSPs see Hosted Exchange as one of a growing number of cloud-based apps that are not going to fit into a traditional local infrastructure focus. They all understand that the money is in services not resale commissions and that the value of their service depends on the value delivered to and perceived by the end customer.
In order for Hosted Exchange (or any other cloud app) to function at its best the customer needs everything that affects performance to be working at its best. As a minimum this means that the local device, the local network and the hosted service (BPOS, Intermedia, etc.) need to be configured correctly and up and running at target performance levels, and for more advanced implementations, integration with voice or other applications are operating as planned.
In order to operate as the single point of accountability to diagnose and resolve problems that are critical to the operation of the end customer business, the MSP needs to monitor the entire process.
These are all the same issues MSPs already solve with other products. Its business as usual, except that most MSPs are not delivering or charging for this critical value.
RMM platforms need to provide this comprehensive capability in order to make this high value, high margin service available to MSPs.
Level Platforms Partners were well positioned to deal with BPOS’s well publicized recent service outages as well as the more common day-to-day local network issues that are critical to the success of any cloud based application and the biggest new pot of revenue on the MSP landscape.
Peter
http://www.levelplatforms.com
I completely agree, Joe. BPOS is just one option among many. Sometimes it will be the best option for a client, but for other clients the best option may be on premise Exchange or Google Apps or Zimbra or Sendmail or something else.
My main point was that the focus has to be on the best solution for the client rather than the most lucrative option for the MSP. Of course we all want to make money, but I believe that if you look after your clients the bottom line will generally follow.
Peter@5: I know you remain a big proponent of MSPs providing end-to-end management as SaaS systems like BPOS emerge. We’ll continue to watch Level Platforms’ strategy closely.
Joel@6: Thanks for the additional insights. I’m particularly curious to see how Zimbra plays in the SaaS equation, especially since VMware now owns Zimbra…
Best
-jp