Both Sides

After Missteps, Microsoft Gets Its Cloud Partner Messaging Right

Microsoft turned off many partners last year when it flubbed the announcement of its Office 365 onboarding plans. This year, the messaging has been decidedly more partner-friendly.

• By M.S. Partner
• September 14, 2015

Wow, what a difference a year makes. One of the main values of attending the Microsoft Worldwide Partner Conference (WPC) is that it provides a compressed, efficient way for partners to absorb Microsoft's messages for the next year.

Another set of benefits of attending WPCs like the one in Orlando this past July, or the one a year ago in Washington, D.C., is the opportunity to pick the brains of Microsoft field staff, to read body language and other contextual clues for the motivations behind Microsoft's messages, and to compare notes with other integrators.

Last year, many of us felt that Microsoft did a horrible job of announcing and landing the Onboarding Center (OBC) with partners. The OBC is Microsoft's internal business unit with several hundred employees whose job is to help migrate new users to Office 365 workloads, a job previously reserved primarily for partners.

In 2014, internal partner-facing personnel were surprised by the announcement, there was limited recognition of how it would impact the partner channel, and there was no direction to partners on where they could take their businesses next.

During my time as a Microsoft employee, I saw Microsoft waffle on its commitment to partners. Recognition of the importance of the partner channel was always there. Yet, there was frequent discussion about weaknesses of the channel and about ways Microsoft could ensure that partners were pushing Microsoft's priorities in the market.

Internal factions sometimes argued that if partners wouldn't keep up with Microsoft's desired pace of change, that Microsoft should make a market itself. That attitude was most prevalent in the enterprise and Corporate Account Managed (CAM) spaces, and almost non-existent in the small to midsize business (SMB) channel.

I believe that it was this same thinking, exacerbated by Google competition, that caused Microsoft to create the OBC and related offers. In my opinion, Microsoft will always push its agenda, and the OBC is actually being expanded this year with additional migration targets and workloads.

Thankfully, this July I found the Microsoft WPC script to be more partner-friendly, giving ideas on how partners could change their businesses and continuing to pile on the incentives to the integration community.

As part of driving the channel, I witnessed an incredible amount of discussion this year about incentive dollars being thrown around by Microsoft. This was especially true in the corporate accounts space. Deployment programs like the $15-per-seat Office 365 offer are coming back and being duplicated for the Enterprise Mobility Suite.

There are already offerings in the market for select partners for SQL Server and Office 365 Proof of Concept funding. The SMB channel team has indicated that partners will see a number of offers, including rebates around selling cloud and migrating users to the new Cloud Solution Provider (CSP) cloud licensing programs. All of this funny money sometimes makes me nostalgic for the simpler days of putting a margin on the price of a product.

Speaking of CSP, partners should investigate this program. Partners have asked Microsoft for the ability to control the customer billing and support. Microsoft itself knows that it struggles to deliver a quality experience for support and billing to current Office 365 portal clients. CSP is the program that many partners have been waiting for -- monthly client billing, no annual commitment and ownership of the support relationship. On the flip side, the margins for the product are small, less than 10 percent after purchasing through distribution and partners, so partners will need to charge a premium on Office 365 to make a profit on the solution and be able to cover the support costs. I predict that this program will experience many changes and enhancements this year. Check back on this one frequently.

Microsoft knows that no matter how many employees and services it throws at the OBC, it can't serve more than a small fraction of the exploding demand for cloud services migrations. For that, Microsoft needs partner capacity, and a lot of it. Compared to WPC 2014, Microsoft worked much harder this time to show us how we could profitably help it.

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