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 Channel Futures

Sales & Marketing


Microsoft: Bullish Investors, Bearish MSPs?

  • Written by Joe Panettieri 1
  • October 28, 2010
Talk about contrasting views: Wall Street is cheering Microsoft's latest quarterly earnings, but some MSPs remain wary of Microsoft's channel cloud strategy -- especially as the company prepares to transition from BPOS (Business Productivity Online Suite) to Office 365 sometime in 2011. Here's the update.

Talk about contrasting views: Wall Street is cheering Microsoft’s latest quarterly earnings, but some MSPs remain wary of Microsoft’s channel cloud strategy — especially as the company prepares to transition from BPOS (Business Productivity Online Suite) to Office 365 sometime in 2011. Here’s the update.

First, some impressive news: In its most recent quarter, strong sales of Windows Server, Windows 7 and Office 2010 lifted Microsoft’s net income a stunning 51 percent to $5.4 billion. That’s $5.4 billion in pure profit, folks. The results beat analyst expectations — suggesting that Microsoft’s Windows Server, Windows 7 and Office 2010 businesses are thriving despite all the cloud hype.

Still, TechCrunch is quick to note the poor financial performance of Microsoft’s Internet businesses. Plus, MSPs are raising plenty of questions about Microsoft’s long-term cloud channel strategy. During the recent N-able Partner Summit, Cloud Channel Chief Gretchen O’Hara addressed more than 100 managed services providers. I give O’Hara credit for showing such professionalism as attendees raised some difficult cloud computing questions. As usual, some partners remain worried about Microsoft controlling billing and customer information for partner-led cloud engagements.

Will Microsoft’s Top Brass Respond?

Somewhere within Microsoft’s management hierarchy I believe there’s a cloud computing disconnect. On the one hand, channel leaders like O’Hara keep hearing billing and margin concerns from partners. O’Hara and other channel leaders gather such feedback from the field regularly. Yet Microsoft continues to insist that it would be too complicated or too risky to allow channel partners to manage cloud computing billing. That’s sort of ironic — considering many major service providers already offer such billing flexibility to VARs and MSPs.

Of course, I need to keep the partner concerns in perspective. I am hearing from a growing number of partners that are having success promoting BPOS (Business Productivity Online Suite), particularly SharePoint Online and Exchange Online. But there are plenty of squeaky wheels within the MSP community. And I’m wondering if Microsoft will take any steps to oil those wheels.

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Tags: Cloud Service Providers Digital Service Providers MSPs VARs/SIs Best Practices Sales & Marketing

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5 comments

  1. Avatar Stuart Crawford October 29, 2010 @ 1:06 pm
    Reply

    Joe, great work as always and I am looking forward to catching up with you next week in Florida.

    I have to ask myself this question, where is the cloud hype coming from? Is it something we have generated in our community or is the business world really looking at it? I think the business world simply looks at Internet community as a service or extension of their business network. Cheaper and faster to deploy applications and also another mechanism to securely backup critical business data.

    The business community I speak with daily here in Calgary looks at me stunned when I mention cloud computing. To them they run Outlook and have no idea or minimal idea that they run Hosted Exchange via BPOS or somewhere else. They run Outlook and Ulistic supports or delivers their email or SharePoint.

    It is the same with social media, they only people hyping social media are the social media professionals 🙂 the rest look at it with a confused look and say, how does this fit into my business.

    The same can be said for Internet computing I believe.

    Cheers

    Stuart Crawford
    ULISTIC
    http://www.ulistic.com

  2. Avatar Shahab October 29, 2010 @ 7:08 pm
    Reply

    Joe,

    As you know HyperOffice is standing by to team up with channels players who see the cloud messaging amp; collaboration market as a huge opportunity yet concerned with some of changes MS has made with regards to the channel. We are getting some traction from MS shops who also like how we let them private label our collaboration suite in addition to managing the billing relationship.

    Would anyone be interested in seeing a comparison of your SaaS options for offering hosted email amp; collaboration. i.e. MS vs. Google Apps, HyperOffice, etc?

  3. Avatar Joe Panettieri October 29, 2010 @ 10:46 pm
    Reply

    Shahab: Yes, I know about HyperOffice. Thanks for the update.
    -jp

  4. Avatar John Butler November 2, 2010 @ 7:43 pm
    Reply

    I think the only people pushing bpos are those who don’t know about the alternative providers who offer similar functionality, better margins and most importantly, the ability to control billing relationships. Microsoft has a history of screwing over it’s “partners”. Entrusting them with customer details and billing is just asking to be taken out a year or two down the line. Hope I don’t sound too cynical but mark my words.

    Wait for the letter one day saying: thanks for helping us grow but in order to provide a superior experience to our customers, were moving (your customer) over to Office730 and unfortunately you’ll no longer qualify for any recurring revenues on the new platform etc yours

  5. Avatar Joe Panettieri November 3, 2010 @ 1:42 pm
    Reply

    John: I’ll agree and disagree…
    1. The BPOS/Office365 discussion is a tricky one for many MSPs, especially those MSPs that want to maintain branding and customer billing.
    2. You allege that Microsoft has a history of screwing over its partners. I disagree there. Microsoft isn’t perfect. But generally speaking Microsoft has a pretty good track record of success with the channel, in my opinion.
    -jp

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