Microsoft to its hosting partners: Get ready. Here we come

Microsoft to its hosting partners: Get ready. Here we come

Summary: At its Worldwide Partner Conference in Denver this week, Microsoft officials are trying to walk the tightrope when it comes to explaining Microsoft's plan to get into the managed services business in a major way. It's hard to sugar-coat the company's bottom line message, however, which is partners need to adapt or get out of the way.

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TOPICS: Microsoft
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At its Worldwide Partner Conference in Denver this week, Microsoft officials are trying to walk the tightrope when it comes to explaining Microsoft's plan to get into the managed services business in a major way.

Microsoft officials have made no bones about the fact that Microsoft is planning to offer a Microsoft-hosted version of services around all of its major products. Already, it's out there selling desktop-management, Exchange, SharePoint, CRM Live and other managed services.

At its gathering of 12,000 partners, company officials are attempting to assuage fears that Microsoft will simply steamroll partners who already are selling hosted Microsoft services.

Microsoft's message: Partners need to change. (The unwritten part: Or get the heck out of the way.)

At least in its official Partner Conference press releases, Microsoft is sugar-coating this message as best it can. In a July 10 Q&A on its Web site, Allison Watson, corporate vice president, Worldwide Partner Group, explains:

"With software plus services, Microsoft will be pointing its partners in a new direction. At the conference, we will outline a framework for how partners can participate and make money with this new opportunity, framing the monetization approach for how partners participate financially within the new software plus services model. As more products become available in the software plus services area, we will continue define the partner revenue possibilities for each....

"In the future, there will be a range of opportunities for partners to meet a range of needs. There will still be opportunities to resell, refer, add value through professional services, package with customized capabilities, and make money through annuities and subscriptions – all of this will remain true. However, there will also be abundant new opportunities for innovative, value-added services and customization as these hosted products roll out. We are also attracting exciting new partners who recognize the business opportunities represented by the breadth of our platform and the potential of the software plus services model."

Some hosting partners are counting on Microsoft targeting only the largest customers and leaving them the mid- and smaller-sized businesses. If history is any indicator, however, Microsoft won't limit itself.

Will hosting partners buy into Microsoft's messaging? Or will Microsoft's managed-services rollout be the straw that breaks the camel's back?

Topic: Microsoft

About

Mary Jo has covered the tech industry for 30 years for a variety of publications and Web sites, and is a frequent guest on radio, TV and podcasts, speaking about all things Microsoft-related. She is the author of Microsoft 2.0: How Microsoft plans to stay relevant in the post-Gates era (John Wiley & Sons, 2008).

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8 comments
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  • LOL!

    [i]"With software plus services, Microsoft will be pointing its partners in a new direction"[/i]

    What would that direction be? Towards the exit perhaps? Or the scrapheap?

    So much for brand loyalty!
    bportlock
  • Microsoft does not allow its "partners" to eat. It eats them.

    .
    Mary Jo Foley says:
    [b][i]"...At its gathering of 12,000 partners, company officials are attempting to assuage fears that Microsoft will simply steamroll partners who already are selling hosted Microsoft services..."[/i][/b]

    Hey Microsoft "partners"! Doesn't it make that decision to provide hosted services based on Microsoft software look really foolish and stupid now? Wouldn't it have been much better to choose "Anyone But Microsoft" way back when and avoid making it SO EASY for your customers to jump to a Microsoft-offered version of your own service?

    Study history or be doomed to repeat it.

    Microsoft does not allow partners to eat. It eats them.

    Only fools "partner" with Microsoft without expecting this. Nobody should EVER partner with Microsoft without planning for this outcome from "Day 1".
    TechExec2
    • MS partners are just in the way here. MS needs to move as quickly as

      possible to build out their global network. The problem is that they can not do it as fast, as cheap, or as robust as Google. Google is building data centers at a rate that MS can not match (no matter how many billions MS has to throw at it). And Google already has a huge lead.

      A bunch of little partners with little inefficient, expensive data centers, that must then buy expensive software from MS, is not a model that can compete against Google. Big corporations are also figuring out that the masses of employees only need simple document editing and spreadsheets.
      DonnieBoy
      • Calling all shills!

        I'm *really* looking forward to seeing the shill's explanation of how MS and MS-products provide a safer, more revenue productive set up than open source.

        The strategy of "build a market and then have your supplier jerk it out from under you" is a really sound business strategy. Not.
        bportlock
        • There will be no shills anywhere near this steaming MS pile. (nt)

          .
          none none
      • Microsoft always tells "partners": "Sorry, you were just in the way"

        .
        Microsoft has a very long and consistent history of bait and switch. Two examples:

        After double-crossing IBM as developer of the OS for the "IBM PC", Microsoft was the operating system company that actively recruited independent software vendors as "partners" to develop applications and support the Windows "Win32" platform. Then, Microsoft developed or purchased applications, integrated them into Windows or gave them away for free, and ate its own software partners. Sorry, you were just in the way.

        Then, Microsoft was the OS and applications company that actively recruited independent consulting and service firms as "partners" to offer the Microsoft OS and applications platform as a service. Now, Microsoft is developing and purchasing their own datacenters globally and is eating its own service partners that have made significant investments of their own. Sorry, you were just in the way.

        When Microsoft is the OS, applications, and online services company, what will be the next Microsoft bait and switch?



        [b]Microsoft is a bad partner[/b]

        Any way you slice it, Microsoft is a lying, cheating, untrustworthy "partner" to any company in any business. It never lets its partners "eat". It always eats them. You don't become one of the most profitable companies in the history of man so quickly by being honest.



        [b]Anyone But Microsoft[/b]

        "Anyone But Microsoft" (ABM) is not a mere fanboy battle cry. It's good business.

        It's better to choose "Anyone But Microsoft" and retain a small business, than to be casually eaten by Microsoft and have no business at all. And, for a fortunate few, you might win big by doing so like Google, Yahoo, and Salesforce.com have. This is a lesson already painfully learned by IBM, Netscape, Lotus, Borland, Corel, Sybase, Citrix, VMWare, and many many others.

        In business, "survival of the fittest" includes intelligence. Only fools "partner" with Microsoft.
        TechExec2
  • MS to its hosting partners...

    Now that you've built a market with some decent revenue, it's time for us to take that market away from you. Thank you for taking all the risks, but it's time for us to push you out of the way and take the rewards.
    Letophoro
  • MS must respond to Google, and that means cutting out the middle man, and

    selling direct, even bundling the service with retail versions. They will also have to cut the price of the office suite.

    They are not in a good position here. They can NOT afford to infuriate partners until they have stolen their business, but they must move as rapidly as possible to cut off Google before they get traction. They of course have all of the internal conflicts based on the Billions rolling in every quarter for MS Office.
    DonnieBoy