In an unusual move, Microsoft is bundling a third-party tool into the Internal Use Rights (IUR) software and services packages for select Microsoft partners.
The new tool being offered as part of the Microsoft Partner Network (MPN) IUR is the SkyKick Migration Suite for Microsoft Office 365, which helps partners simplify, automate and speed up the sales, provisioning, migration and management of Microsoft's cloud productivity suite.
IUR, Microsoft's term for not-for-resale licenses, are included in the Microsoft Action Pack (MAPS) and for Silver Competency and Gold Competency partners. MAPS partners generally get enough licenses from Microsoft to run a 10-person partner organization, with Silver-level IUR accommodating a 25-person partner company and Gold-level IUR outfitting a 100-person partner company.
The Office 365 IUR SkyKick Migration Offer was announced Wednesday and runs through the end of Microsoft's fiscal year on June 30. The SkyKick IUR covers a migration of up to 500 seats, regardless of whether the partner has MAPS, a Silver Competency or a Gold Competency.
"The feeling is that partners get the opportunity to leverage it and use it," said Evan Richman, co-CEO of Seattle-based SkyKick. "It's good for them, and if they're using it, it's good for their productivity and it's good for their organization's ability to pass it along to customers in a more robust way."
SkyKick and Microsoft decided to offer the SkyKick IUR at 500 seats regardless of a partner's MPN level for simplicity's sake. For example, Richman said, "If they're a Gold Competency partner with 100 licenses, and they were a 250-seat organization, they could move all 250 seats."
In that case, while the SkyKick licenses would be covered, the partner would still need to pay for 150 extra Office 365 licenses from Microsoft for the seats that go beyond their 100-IUR benefit.
In an e-mail interview, a Microsoft spokesperson declined to say if this is the first time third-party software, services or tools have been included as part of Microsoft IUR.
"The SkyKick Migration offer for our partners is a way to enable a partner to easily unlock the benefits of Office 365. Providing partners access to SkyKick's Migration offer for up to 500 seats is another example of how we're taking new approaches to really engage with and support partners who are helping to lead the transformation to the cloud. This offer is an investment in our partner ecosystem to help them receive the most value from their partnership with Microsoft," the spokesperson said.
Asked if Microsoft intended for partners to use the SkyKick IUR to get familiar with the SkyKick tool and use the regular paid version on behalf of customers in migrations, the spokesperson suggested that the initial goal is simply to get partners themselves onto Office 365.
"As Gavriella [Schuster, general manager of Microsoft's Worldwide Partner Group] wrote in a blog a few weeks ago, we know that when partners use their IUR [benefits] for Office 365 in their own businesses they are three times more successful at selling the product to customers. But we also know that many partners are focused on helping their customers move to the cloud right now," the spokesperson said.
"After all, IDC predicts the public cloud market will grow to over $127 billion by 2018. We have many partners who can make migrating to the cloud much easier for customers, and whether a customer uses SkyKick, the Office Fast Track program, or works with another partner, we are confident that now is the time to bet on Microsoft's cloud offerings and want to expose our partners to the many ways they can assist our customers accelerate their own access to Office 365. Providing access to the SkyKick Migration tool is a great example of how partners can get the most value out of their Microsoft cloud IUR benefits," the spokesperson said.
Posted by Scott Bekker on March 25, 2015 at 9:22 AM0 comments
When it comes to customers' spending plans for managed services, backup figures big.
As part of a large hosting survey conducted by 451 Research LLC and commissioned by Microsoft, researchers asked 1,736 respondents to indicate on which managed services they intended to spend heavily over the next two years.
As long as there have been managed services and managed services providers (MSPs), backup and disaster recovery have been the main upsell opportunity. The survey reinforces that truism.
Sixty-eight percent of respondents picked backup and recovery, and 54 percent said disaster recovery/site recovery. Those were the top two responses from the cloud and hosting service provider customers of all sizes from 10 countries in the survey, "Beyond Infrastructure: Cloud 2.0 Signifies New Opportunities for Cloud Service Providers."
Another backup-related category, archiving, came in sixth with 44 percent expecting to spend money on that managed service.
Other categories with high levels of interest included mobile services (47 percent), premium 24x7 support services (45 percent) and end-to-end application management, including monitoring and configuration (42 percent).
For more coverage of the survey, see Microsoft Backs Survey to Define the Elusive Cloud Buyer.
Posted by Scott Bekker on March 23, 2015 at 10:24 AM0 comments
After steadily eating away at Cisco's leadership position in enterprise unified communications (UC) collaboration in 2012 and 2013, Microsoft seemed poised to grab the market leader role and hold onto it. Indeed, Microsoft claimed a sliver of a lead in the enterprise UC market in the first quarter of 2014.
Since then, though, Cisco has proven itself a hard target for Redmond in UC, according to data from Synergy Research Group.
Cisco narrowly reclaimed market leadership in the second quarter of 2014, widened the lead slightly in the third quarter and, according to data released by Synergy this week, expanded that lead further in Q4.
Synergy defines enterprise UC as a $30 billion market that includes enterprise voice, UC applications, telepresence, e-mail software, enterprise content management, enterprise social networks and a range of hosted/cloud communications and applications.
In Q4, Synergy said that the UC collaboration market hit $8.5 billion, an all-time high but one that represents just a 2 percent increase year on year. That low single-digit growth masks a dynamic market with new technologies riding a very different growth path than legacy technologies.
As a major player on both old UC and new UC, Cisco's latest gains in share come from the legacy side.
"While revenues from enterprise IT telephony are clearly continuing to decline, Cisco saw a very nice year-end bump in its telephony revenues, which helped it to distance itself from Microsoft," said Jeremy Duke, Synergy's founder and chief analyst, in a statement.
Microsoft, which this week unveiled its next generation of enterprise UC products under the Skype for Business brand, has a strong strategic position in the fastest-growing part of the market, leading Synergy's Duke to project an ongoing battle between the two leaders: "The real bright spot for Microsoft is that it has clear leadership in hosted/cloud solutions which are also the highest growth part of the market. Cisco dominates in premise-based solutions but the general trend is for hosted/cloud revenues to catch up with and surpass premise-based revenues."
By share, Synergy ranks the top five contenders as Cisco (16 percent), Microsoft (14 percent), Avaya (7 percent), IBM (4 percent) and Polycom (3 percent).
Posted by Scott Bekker on March 19, 2015 at 11:31 AM0 comments
A common piece of conventional wisdom on cloud is that it changes who buys technology.
In a detailed and wide-ranging new survey commissioned by Microsoft, 451 Research LLC attempts to provide some data to support a definition of that amorphous and elusive concept -- the new cloud buyer.
The report, "Beyond Infrastructure: Cloud 2.0 Signifies New Opportunities for Cloud Service Providers," is a survey of 1,736 cloud and hosting customers conducted in 10 countries between December and March.
Addressing the new buyer, the survey pointed to decisions being made at a much higher level than the traditional IT manager, confirming -- in this case, at least -- what analysts and technology executives have been telling partners for the last few years: To succeed, the sales pitch has to get more business-focused and less technical.
The traditional IT buyer, the IT infrastructure manager, is still important. The survey finds the IT infrastructure manager is identified by 38 percent of respondents as the primary decision-maker (see Figure 1). However, that only ranks third on the list. In second place is the CEO, identified by 44 percent of respondents as the primary decision-maker. That's a huge percentage, and a CEO requires a completely different selling style than traditional IT infrastructure managers. The top person for evaluating hosting and cloud services, with 52 percent of respondents, is the CIO or CTO -- a role that bridges the concerns of the other two.
The survey also shines a light on a significant new player in the IT buying world -- the marketing department. Marketing is emerging as an aggressive and heavy consumer of cloud services, and this is a department where business considerations heavily outweigh any technical concerns.
When asked about an organization's highest expectation for moving to hosted services or cloud computing, marketing respondents' answers were all about business. The highest expectation was "help grow our business" at 27 percent, with "better business service" at 15 percent and "add capabilities we cannot build internally" at 13 percent (see Figure 2).
Marketing is the department most likely to launch new cloud applications with capabilities that the company didn't have -- 26 percent of the time. Marketing also has the most aggressive plans among the departments surveyed (other departments were IT operations and application development) to put applications in the cloud. In 35 percent of cases, marketing expected to have more than 75 percent of its applications or resources in the cloud in the next two years (see Figure 3).
While a marketing manager is seldom the primary decision-maker, marketing department projects are the most likely ones for the CEO to weigh in on. The CEO is the one making decisions on IT purchasing decisions for marketing in more than half of organizations, according to the survey.
The general trend for cloud IT decisions to move up the corporate ladder brings new concerns to the fore, according to Michelle Bailey, senior vice president at 451 Research.
"As new decision-makers emerge, so too does the criteria for selecting cloud service providers. Trust, uptime, security, performance and technical expertise are today's differentiators for a business-ready cloud," Bailey said in a statement. "Cloud 2.0 is really about value, redefining cloud computing from a technical specification to a business-ready environment. Enterprises are looking for a trusted end-to-end solution, and ultimately this will involve multiple partners."
Aziz Benmalek, general manager for the hosting service provider business at Microsoft, highlighted other findings of the survey -- the maturity level of customers, with 75 percent saying they were beyond the cloud discovery phase, and a healthy interest in combined private and public cloud environments. Benmalek contends those trends spell new opportunities for Microsoft's community of hosting service providers, which grew by 5,000 partners in the last year.
"This presents a significant opportunity for our service provider partners to provide value-added services to their customers," Benmalek said in a statement. "By offering these expanded services, cloud service providers will be able to drive additional consumption, increase revenue and serve as trusted advisors."
More than half of the customers surveyed were in the United States. The percentage of respondents from each of the other nine countries ranged from 9 percent to 2 percent and were, in descending order, Germany, the United Kingdom, India, Brazil, Australia, Japan, Singapore, Turkey and the Netherlands. Of respondents who provided company size information, about 40 percent had between 100 and 999 employees, with roughly 20 percent each in the bands of less than 100 employees, 1,000 to 4,999 employees, and more than 5,000 employees.
Posted by Scott Bekker on March 18, 2015 at 10:26 AM0 comments
Ingram Micro on Monday unveiled an expanded set of automations and services around Office 365 that the distributor believes will kickstart strong growth for Microsoft's Cloud Solution Provider (CSP) partner business model.
Microsoft announced the CSP program last July and began rolling the program out in the fall. The idea behind CSP is to allow partners to package Office 365 and other cloud products and control the billing and customer relationship. Unlike Microsoft's advisor model, Microsoft does not bill the partner's customer directly. Unlike the Open licensing partner model, the partner is not responsible for buying a year's worth of licenses but instead can pay on a monthly basis in the same way that they will be billing their customers.
CSP consists of two models: 1-tier is for a few strategic partners who will deal directly with Microsoft, while 2-tier is the breadth program in which Microsoft will sell to distributors, called Master Cloud Service Providers, who then resell to partners who resell subscriptions to customers.
Ingram joined the CSP program as a distributor last year, but this week at its annual Cloud Summit in Phoenix, Ariz., announced significant automations, channel services and add-on programs for its partners.
"We actually announced in the fall of 2014 that we had been authorized to sell CSP, and we went to market as everybody else did with some manual intervention in the background," said Renee Bergeron, vice president of cloud computing at Ingram Micro, in an interview. "We are the first two-tier partner that has actually automated the entire process."
That automation takes the form of the new inclusion of Office 365 in the Ingram Cloud Marketplace, where Ingram's partners can come to order cloud products. The other major new automation component is tight integration with SkyKick -- the channel-focused toolset created by former Microsofties to simplify, automate and speed up the selling, provisioning, migration, management and setup of Office 365.
"In general, the feeling is CSP really is going to be a powerful new model, especially the way Ingram is using it to really drive adoption," said Evan Richman, co-CEO of SkyKick.
SkyKick, which has been selling its toolset to partners since 2013, can take a regular username and password (administrative credentials aren't necessary) from a customer and automatically discover the server, all the e-mail addresses and other critical details of the existing infrastructure. From there, SkyKick presents the partner with a list of e-mail addresses and a simple selection process to pick which Office 365 SKU addresses each need.
Integration with Ingram Micro's back end will mean precise pricing customized for the selling partner will appear on the partner's screen. Once SKUs are selected, SkyKick provides tools for customizing and scheduling migrations and managing the project.
In the Ingram Micro cloud marketplace, partners who select Office 365 will get three ordering options for Office 365. They can select Office 365 with the full SkyKick Automated Email Discovery and Migration Services; they can pick Office 365 with SkyKick's automated e-mail discovery for free; or they can choose Office 365 by itself, mostly for new accounts without legacy e-mail accounts or servers to migrate (see screenshot).
Ingram is also bringing many other elements to the cloud marketplace that its partners will be able to sell to enhance Office 365. "Now with the automation, we can enable them to do a lot more than just sell the mailbox. For example, on the marketplace, they can bundle that mailbox with their own help desk, or they can bundle it with security," Bergeron said. "We have 10 vendor partners, and together they represent 55 different services."
Other offerings in the marketplace include security from McAfee and Trend Micro, backup from Acronis, an Ingram Micro Service Desk that can be white-labeled, as well as products from Cirius, Nomadesk and RingCentral.
Posted by Scott Bekker on March 09, 2015 at 12:11 PM0 comments
How much would Microsoft's overseas profits add up to if the company paid U.S. taxes on them the way Uncle Sam prefers? A lot, according to an infographic in the March 9-15 issue of Bloomberg Businessweek.
In the graphic (see below or page 35 of the print issue, which just landed in the snow outside my house), Bloomberg compiled securities filings and U.S. Office of Management and Budget information and assumed the 35 percent tax rate that companies owe when they repatriate profits after getting credit for taxes paid abroad.
Bloomberg says Microsoft booked $92.9 billion in profits in Ireland, Puerto Rico and Singapore. The magazine declares that amounts to $29.6 billion in lost U.S. taxes. According to the graphic, that's enough to cover the entire budget of the Department of Justice and a quarter of the Department of Commerce.
Microsoft tops the Bloomberg Businessweek list, but two other tech giants are close behind. Apple has $69.7 billion stashed and would owe $23.3 billion if it brought it all home -- enough to pay for all but $500 million of the Department of Agriculture's discretionary budget. Oracle has $39.3 billion stashed overseas -- equal to about $12.2 billion in taxes, enough to cover the Department of the Treasury.
In all, corporations are parking more than $2 trillion in profits offshore, the magazine said. For perspective, the proposed U.S. budget for 2015 is about $3.9 trillion. That's one year of U.S. federal government spending, and the offshore corporate accounts have been amassed over many years.
It's a nice touch by the magazine to subtly note that Microsoft's tax avoidance choices are equal to defunding the department that gave them so much trouble in the 1990s.
Posted by Scott Bekker on March 06, 2015 at 10:18 AM0 comments
In an effort to increase channel uptake of its strategic mobility and security cloud offering, the Enterprise Mobility Suite, Microsoft is making EMS available for free to partners and providing a new way for partners to sell it.
"EMS is available in Open Licensing on March 1, 2015," wrote Gavriella Schuster, general manager of the Microsoft Worldwide Partner Group, in a blog post Thursday. "Like many of the other cloud-based services that recently become available in Open such as Office 365, Azure or Dynamics CRM Online, the flexibility and potential cost savings of the Open Licensing model makes it possible for distributors and resellers to sell additional cloud services to small and medium-sized enterprises."
Microsoft has two main models for the majority of partners to sell its cloud services. In the original model, partners get themselves registered on a deal between Microsoft and the customer and receive Partner of Record fees, also known as advisor fees. That option had been available for partners with EMS already.
In another model, partners buy the license on behalf of the customer, and then resell it, ideally in a bundle with other Microsoft, third-party and their own services. One method for facilitating those types of sales is with Open Licensing. In Microsoft's Open model, the customer places an order with a partner, the partner in turn makes an order from a distributor -- such as Tech Data, Ingram Micro or Synnex -- and the distributor ultimately passes the order on to Microsoft. The invoice goes back through the chain in the other direction, allowing the customer-facing partner to present a single bill to the customer, offering customer convenience and partner control over margin. The approach also is supposed to protect partners from having their customers poached by either the distributor or Microsoft.
Microsoft introduced that Open model for cloud services with Office 365 in February 2013 and later added other products to the model -- Intune and Power BI in April 2014, Azure in August 2014 and CRM Online earlier this month.
EMS is also being dropped into the package of not-for-resale offerings that partners get from Microsoft to encourage internal familiarity, customer demos and testing. "Starting in early March, Microsoft Action Pack subscribers, along with Silver and Gold competency partners, will get access to EMS and Azure AD Basic as part of their Internal Use Rights (IURs) benefits," Schuster wrote.
A response to the megatrends of consumerization of IT and bring your own devices (BYOD), EMS consists of Azure AD Premium for hybrid identity and access management, Intune for mobile device and application management, and Azure Rights Management for information protection.
To encourage usage of the products together, Microsoft cut the price to buy the suite by almost half compared to what it would cost to purchase the three products separately. According to a December 2014 customer datasheet, the suite costs $7.50 per user per month with an annual commitment. Individually, the products would cost $14 -- $6 for Azure AD Premium, $2 for Azure Rights Management and $6 for Microsoft Intune, according to the datasheet.
Matt Scherocman, president of Interlink Cloud Advisors in Cincinnati, has several customers on trials of EMS and sees the product as a huge opportunity for the channel.
"I think partners should want to drive this as a solution. No. 1, it's services. No. 2, it's about helping the customer with all the ways they protect their data, which is huge," Scherocman said, adding that the single sign-on that EMS enables through Azure AD Premium allows users to connect to several thousand cloud apps in a way that's managed by the AD administrator. "The other thing I like about EMS as a partner is that it's an area that Microsoft is investing in."
Posted by Scott Bekker on February 26, 2015 at 11:40 AM0 comments
AVG Technologies is doubling down on its channel-centric SMB efforts by rebranding those parts of the company as AVG Business.
"AVG Business is a dedicated business unit within AVG with its own team and engineering, sales and marketing under the same roof," said Francois Daumard, vice president of global channel sales at AVG, in an interview.
Daumard, a former Apple and Microsoft channel executive who joined AVG in December, said the business unit, run by Mike Foreman, will remain part of AVG Technologies.
By products, AVG Business includes AVG Business Managed Workplace, an RMM suite; AVG Business CloudCare, a cloud-based security suite; a network operations center and helpdesk; and AVG CloudCare SSO, a single sign-on offering currently in beta that is a technology partnership with Centrify Corp.
On Wednesday, AVG also released a VMware ESXi service module for Managed Workplace. The VMware integration was a top request of many of AVG's 10,000 partners, Daumard said.
AVG recently completed acquisitions of Norman Safeground and Winco, and the company will continue to expand geographically through M&A, Daumard said. Distribution partnerships are another key part of the company's 2015 geographic expansion plans, he said.
"We'll continue our geographic development in 2015, and we're going to localize our product. We see a lot of opportunity for growth in Europe, for example, in Germany," he said.
In its 2014 financial results release last week, AVG said its small business segment revenues grew 18.7 percent to $58.5 million of AVG's overall $374.1 million in annual revenues.
See this feature for recent RCP coverage of AVG's channel plans and product roadmap.
Posted by Scott Bekker on February 25, 2015 at 12:33 PM0 comments
The paper chase associated with becoming a Partner of Record (POR) for Microsoft's Online Services Advisor Deploy incentives will end next week.
For the last few years, in order to be eligible for Online Services Advisor (OSA) incentives, partners needed to track down such archaic details as a customer's Enterprise Agreement (EA) ID number, the date of the agreement and the type of agreement; put the data in a form; get an employee at the customer to sign it; and finally send the paper to Microsoft.
Several months later, partner incentives associated with Office 365, Dynamics CRM Online or Windows Intune might start rolling in. That is, so long as one of those details in the paperwork wasn't incorrect, in which case partners began the bureaucratic slog to find any errors in the form and correct them, adding several months to the process of getting that first check.
Change in the form of a new all-digital process is coming March 2, according to a blog post Monday by Osa Elaiho, senior program manager in Microsoft Partner Network Support. "We've heard your feedback that attaching yourself as the Advisor Partner of Record (POR) for Office 365, Windows Intune, CRM Online, and Enterprise Mobility Suite [EMS] using the Online Services Advisor (OSA) form comes with several challenges and takes too much time," Elaiho said. "We're making a change to the Advisor Deploy incentives to automate the partner attach process with a new, online capability."
As of next Monday, a customer's Online Services Global Administrator will be able to attach a partner as the POR for any subscription a partner is actively managing for that customer, Elaiho said. The change can be made in the Office Customer Portal for Office 365 and Dynamics CRM Online and in the Intune Account Portal for Windows Intune and EMS.
"We're definitely excited that it's moving to a digital mechanism, because it has been a significant pain point for us and our customers over the last two to three years," said Reed M. Wiedower, CTO at New Signature, the 2014 Microsoft U.S. Partner of the Year. "The biggest challenge has often been in verifying that all the logistical information is correct. Even the person in charge of the purchasing at the customer is often hard-pressed to know."
One problem New Signature sometimes ran into was a customer might provide a bad or an outdated EA number. "You would be attached, but you'd never make any revenue off of it," Wiedower said.
Don MacNeil, managing partner at Strategic SaaS, said the EA agreement date was another common obstacle. "You'd send in the paperwork, and you'd get the agreement date wrong. That would kick it out," said MacNeil, who is in the process of tracking down customer information for two of the paper forms and added that he was "thrilled to hear" about the change.
"It wouldn't work about 5 to 15 percent of the time, depending on the season," MacNeil estimated of the OSA form process.
Administrative problems weren't the only shortcoming of the paper process. Both Wiedower and MacNeil say their companies lost POR status to licensing solution providers (LSPs). POR is supposed to be for the deployment and management partner; LSPs make a separate percentage on the sale of the license. As Microsoft has reportedly clamped down on the LSP margin and encouraged those partners to offer more services, the LSPs have come into conflict with systems integration partners over POR fees.
"The pain point the LSPs were exploiting was they had a lot of paperwork they had to shove in front of the customer," said Wiedower, who added that the LSPs had the benefit of all the EA information at their fingertips.
"In the digital process, we'll get an e-mail," Wiedower said. "It also ensures that if someone does switch, it's a trivial solution to switch them back. The new mechanism should allow us to have multiple layers of error correction."
The new process will bring some headaches of its own for all concerned. While new OSA forms will be accepted for new EA or Campus Agreement/School Agreement deals until April 30, partners must go back to all of their current customers to attach themselves as the Digital POR for each subscription they currently manage. Elaiho's blog post didn't say when the deadline for converting current customers would hit. Elaiho also said Microsoft will use the Digital POR data to calculate sales goal requirements for Silver and Gold competencies.
The change doesn't affect the related Online Services Advisor Web-Direct POR process, which was already digital. Microsoft previously, and somewhat confusingly, called both programs "Online Services Advisor Incentives." In October, the MPN renamed the EA side of the program "Online Services Advisor Deploy" and called the part for customers with fewer than about 200 seats "Online Services Advisor Web-Direct."
Josh Waldo, a longtime Microsoft executive whose last job there was senior director of cloud partner strategy before joining Nintex in November as vice president of channel strategy and channel programs, said the move made a lot of tactical sense for Microsoft. While echoing the reasons that Wiedower and MacNeil stated, Waldo also pointed to the internal costs to Microsoft of the old process: "It takes a lot of good, intelligent and expensive people to run a time-consuming manual process like that and takes even longer when something goes wrong with the process."
However, Waldo also sees some strategic benefits for Microsoft. One is moving the customer decision maker from a procurement person, who may not be familiar with various partners' roles in the deployment, to the IT administrator, who knows the partners' roles intimately.
"By making it digital, and by making it something that only the person who has access to the tenancy can do, you can inherently change the person who makes the decision to the right person. I think that's a huge factor here," Waldo said.
Longer term, by digitizing and segmenting the POR even for EA customers, Microsoft could be leaving itself room to tie partner incentives to specific workloads over time, Waldo speculated.
"I have to think that in the future this gives you a platform to incent certain workloads that might not have as much usage as others," Waldo said. "If you're only using Exchange but you have the rights to SharePoint or Lync, you could incent on driving Lync usage or driving SharePoint usage, which is great for Microsoft, great for partners and great for customers as they get even more out of what they purchased."
Posted by Scott Bekker on February 25, 2015 at 12:49 PM0 comments
The award ceremony at the annual Microsoft Worldwide Partner Conference (WPC) has always been primarily a celebration of the partners who go deepest with Microsoft's proprietary stack.
But this year, one of the partners called to the stage in July will be recognized for deploying an open source solution on the Microsoft Azure platform.
"At Worldwide Partner Conference (WPC) this year, we will highlight how [our open source] momentum is made possible by our partners, and their delivery of open cloud solutions, by awarding the first annual Open Source on Microsoft Azure Partner of the Year Award," said Mark Hill, vice president for Open Source Sales and Marketing Strategy at Microsoft, in a blog post Thursday.
"This new award will recognize partners who build outstanding open source-based solutions on our cloud platform, Microsoft Azure. This year's winner will have illustrated customer success with an innovative Azure solution that includes a significant, globally recognized open source project," Hill wrote.
The new open source award will be just one among dozens of categories of awards Microsoft will hand out in July. Most will still reward partners for Microsoft-heavy implementations.
Hill put the new award in the context of Microsoft's increased emphasis on openness over the last year, which has coincided with Satya Nadella's tenure as CEO. Among Microsoft's open source milestones, according to Hill, are a 20-percent-plus share for Linux-based solutions of all Azure compute usage and the move in November to make server-side .NET open source.
Posted by Scott Bekker on February 20, 2015 at 8:31 AM0 comments
It was during a conversation with a VAR that Axcient CEO Justin Moore decided there had to be a better way for vendors to pay partners for selling their cloud services.
The VAR professed love for Axcient's Recovery-as-a-Service (RaaS) product, Business Recovery Cloud, Moore recalled. Yet the VAR had only sold Axcient to one customer during a period when the VAR had sold about 40 traditional software-hardware solutions that were twice as expensive, and took 10 times more time to recover.
"I asked the sales guy why," Moore said. "He said it was how sales reps were compensated. If they sold a $10,000 solution with a $2,000 margin, the sales rep gets a check for $200. Conversely, if they sold Axcient for $500 a month, and margin was about $100, the sales rep got $10 a month."
Imagining a 20-something sales rep who may not still be at the same VAR in two years as the cloud margins potentially start adding up, it's easy to see why cloud doesn't get the same focus as legacy systems.
"That was the lightbulb moment when we realized that the entire economic model is broken for VARs and resellers," Moore said. "There is a reason that Salesforce, Box and every other SaaS vendor has a relatively small amount of revenue going through VARs."
"We believe that value-added resellers play a critical role in sales to midmarket and enterprise IT as trusted advisors. Customers rely on the value-added reseller to ensure best practices implementation of the new technology"
Justin Moore, CEO, Axcient
Axcient on Wednesday announced what Moore called "an entirely new economic model for value-added resellers." Calling it "SaaS:FLO," short for Software as a Service: Front Loaded Option, Axcient will cut a check equal to the first five months of revenue from its RaaS. By the company's math, that's equivalent to two years worth of normal partner margin, but all up front. The partner will also get a renewal margin at the beginning of each year that the customer stays with Axcient.
According to Moore, the SaaS:FLO upfront year one margin is better than what a partner would earn on a traditional software-hardware sale.
MSPs, who are more comfortable fitting monthly recurring SaaS revenues into their business models, have been a strong area for Axcient, but Moore said the pricing move is designed to help Axcient build a complementary base of VAR partners. "We believe that value-added resellers play a critical role in sales to midmarket and enterprise IT as trusted advisors. Customers rely on the value-added reseller to ensure best practices implementation of the new technology," Moore said.
About 30 VARs are already signed up with SaaS:FLO, Moore said. Al Chien, executive vice president of sales at Dasher Technologies, and Michael Souza, senior vice president at FusionStorm, each provided enthusiastic quotes about the program for Axcient's announcement.
The program seems like an answer to the problem that Microsoft, analysts and other vendors with the monthly recurring revenue approach have been trying to advise partners to solve for the last five years -- how to make that leap from relying on big deal-based payouts to surviving on the smaller monthly recurring payments that could eventually bring in more money than the big deals.
By putting its money where its mouth is, saying effectively that "if the monthly recurring revenue is going to be better over time, we'll pay the partners up front," Axcient is taking on a huge amount of risk that other vendors may not want, or be able, to match. The risk could sink Axcient, as well.
That's partly why the program is going to be limited to about 100 VARs this year. "We're being picky, very picky," Moore admitted.
What's enabling Axcient to try the upfront payments for cloud services is a new Series E funding round of $25 million, also announced Wednesday, and a new debt facility. "[One] risk is that it consumes a lot of cash. We have mitigated that risk by partnering with people who have extremely deep pockets," Moore said.
The other risk involves customer retention. If partners are paid upfront and customers abandon the platform before Axcient breaks even, the company would be in trouble. "If you don't retain your customers for at least five years, then it's a model you can't possibly afford," Moore said. "We have the benefit of seven years of retention data, and we know and can project that we will keep our customers for at least seven years."
Posted by Scott Bekker on February 18, 2015 at 1:06 PM0 comments
CDW Corp. in its earnings call Tuesday provided a look at how the Windows Server 2003 refresh cycle is playing out for one of Microsoft's largest partners.
Microsoft is cutting off support for Windows Server 2003 on July 14, and many Microsoft partners are focused on the server refresh business, including CDW, which spun up a Windows 2003 migration practice in the middle of 2014.
Tom Richards, chairman and CEO of CDW, said Windows Server 2003 refreshes accounted for a small part of what he characterized as high single-digit growth in server sales for CDW in the fourth quarter of 2014.
"The other thing that we're hearing is the many customers either through virtualization have created capacity and so [they're] not necessarily automatically adding new servers, but maybe expanding the capacity of existing servers, in addition to looking at cloud-based solutions, which, as turned out great for us, it's one of the reasons our cloud business has had such exceptional growth," Richards said, according to a Seeking Alpha transcript of the call.
"I hesitate to use the word tailwind, because of what a big tailwind XP was, but I think it will be a mild tailwind from -- for 2015," Richards said.
The XP tailwind referred to the Windows XP end of support in 2014, which fueled CDW growth well throughout the year and later than he expected, Richards said.
"My expectation for 2015 is we'll return to what I would describe as a more normal rhythm that we have had in previous years," Richards said of client-side demand.
CDW's fourth quarter results included adjusted earnings of 59 cents per share, which was 5 cents ahead of analysts' estimates, and revenue growth of 12.4 percent to $3.05 billion. The company also declared a dividend of 6.75 cents a share to be paid on March 10.
Posted by Scott Bekker on February 11, 2015 at 10:48 AM0 comments