Partner Advocate

Ambiguous Adventure: Microsoft and Managed Services

Whether or not partners will be part of Redmond's latest foray remains to be seen.

• By Scott Bekker
• August 01, 2007

Yes, Microsoft is starting to get into hosting some services directly for customers, creating the potential for Microsoft to steamroll some of the hosting partners that the company is currently inviting onto its platform.

The company has rolled out some hosted, managed services for e-mail and collaboration and is looking to offer desktop management, business intelligence, Forefront-based security and a form of Active Directory Federation Services, according to published interviews with Ron Markezich, vice president of Microsoft Managed Services. The company continues its rapid buildout of data-center capacity. Microsoft has also grown its base of customers for managed desktops by nearly 200 percent, counting contracts that are awaiting signature.

OK, wait a minute. We're talking about going from two customers -- Energizer and XL Capital -- to four or potentially six customers. It seems to me that when it comes to managed services, Microsoft is adhering pretty strictly to the slow public schedule it has set for itself. There are worrisome trends in the shift in language from "managed solutions" to "managed services" and a seemingly smaller emphasis on a roadmap for partner involvement. Trending the other way is a shift in the scale of targeted customers for the managed desktop offering from companies with at least 2,000 desktops to companies with at least 5,000 desktops.

Here's the thing: Microsoft is moving at a glacial pace in an effort that's been several years in the making. Microsoft is a 70,000-person company that's struggling very hard to define itself, and questions of the company's identity are being opened and reopened when it comes to hosting and providing services.

What's more, those data center investments can be huge and intimidating to partners until they realize in how many different directions Microsoft could take those facilities. Many of the alternatives are directed at consumers and ad-driven search in the horse race with Yahoo! and Google.

Should partners, especially hosting partners, be concerned about Microsoft's managed services initiatives? Definitely. But Microsoft just isn't moving convincingly enough in any particular direction for partners to respond yet. I'm also swayed by arguments that the company won't invest in the kind of direct sales force that would be required for Microsoft's hosting business to flourish without partners.

What do you think? Am I whistling past the graveyard here? Have I missed a crucial change in direction and momentum? Write me at [email protected].