Microsoft: Bullish Investors, Bearish MSPs?

Microsoft: Bullish Investors, Bearish MSPs?

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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