Distributor Ingram Micro is broadening the hosted Microsoft offerings available to resellers within Ingram Micro Seismic, a portfolio of third-party cloud and outsourced services for managed service providers.
On Tuesday, hoster Intermedia announced it has joined the Seismic program. Intermedia currently hosts about 225,000 premium Exchange mailboxes, many of which are sold through a network of 4,000 resellers.
Intermedia joins Microsoft hoster groupSPARK in the Seismic program, which claims about 1,000 MSP members in North America. The groupSPARK offering consists of Hosted Exchange Server 2007 and Hosted SharePoint Services 3.0. In addition to hosted Exchange and SharePoint, Intermedia is also listed on the Ingram Micro Seismic site as offering Microsoft Office Communications Server 2007, BlackBerry, the Microsoft Business Productivity Suite and Microsoft Dynamics CRM to Seismic MSPs.
In a statement, Justin Crotty, vice president of services for Ingram Micro North America, emphasized the importance that hosted Microsoft collaboration and e-mail services has for MSPs in explaining Ingram's need to expand on the existing offering. "We've teamed with Intermedia to expand our hosted solutions portfolio and provide Seismic partners with more choice and flexibility," Crotty said.
Vendors already participating in the Seismic portfolio aside from Intermedia and groupSPARK include Alert Logic Inc. for log management and threat management, Autotask Corp. for professional services automation, CA Inc. for instant backup and recovery, Level Platforms Inc. for remote monitoring and management, NetEnrich Inc. for a global network operations center, Nimsoft Inc. for enterprise monitoring, Print Audit for print monitoring and management, Synergy Global Solutions for an outsourced help desk, and VaultLogix LLC for online backup and restore.
Posted by Scott Bekker on October 27, 20090 comments
Everyone's seen the top line for Microsoft's first quarter, and, coming as it did a day after the Windows 7 launch, Wall Street was impressed.
The price of MSFT went up nicely in spite of revenue declines of 14 percent year-over-year and an earning-per-share decline of 17 percent. (To its credit, Microsoft didn't count $1.7 billion in revenues for Windows 7 deferrals and OEM pre-orders, meaning the company did slightly better than the official numbers indicated.)
It's nice to see the stock rewarded, given how Microsoft for years delivered insane growth year after year and never got any kind of stock bounce. I used to somewhat buy the argument that Wall Street traders knew what they were doing when they valued Microsoft stock as flat despite constant revenue and profit growth. After the last year, though, I lost all confidence that the market ever had any idea what any company is really worth.
Of course, here at RCPU, we don't care so much what Wall Street thinks as for what's revealed for partners by the financial reports. With that in mind, we've done our usual close read of the Microsoft quarterly report with the U.S. Securities and Exchange Commission.
Stuff that caught our attention this time:
- Microsoft Dynamics revenues declined 6 percent in the first quarter, compared to the year-ago period. This is especially interesting because it's the first time Microsoft has talked about Dynamics revenues. In the past, Microsoft used the vague phrasing "Dynamics customer billings," which we could never get anyone to define. Last year, such billings were up 10 percent in the July through September quarter, down 7 percent in the October through December quarter, down 8 percent for the January through March quarter, and off 7 percent for the full fiscal year that ended in July.
The upshot: It's still extremely tough out there on the Dynamics front. It's hard to say, given the change in reporting from billings to revenues, though, whether the 6 percent revenue drop points to a sequential improvement over whatever the fourth quarter drop in billings were, or not. In all, this is a positive reporting change toward a tangible figure. Next, maybe Microsoft could say what Dynamics revenues actually are in dollar terms?
- The segment of the channel that's occasionally worried about competition from Microsoft Consulting Services may get some relief from this data point from the 10-Q: There was a "decline in demand for consulting services." The amount wasn't specified, but the decline was cited to explain a decrease in cost of revenue of $69 million in the Server and Tools business unit.
- Microsoft estimates that worldwide PC shipments from all sources for the July 1 to Sept. 30 period were somewhere between flat and 2 percent growth. Hey, flat is the new up.
- OEM revenues dropped $207 million, or 6 percent, and that's counting the otherwise deferred revenues associated with Windows 7. Part of the reason for the dip in OEM revenues (which account for about 80 percent of Windows Division revenue) is an 8 percentage point decline in the OEM premium mix to 63 percent. According to the report, that's "primarily driven by growth of licenses related to sales of netbook PCs, a decline in premium editions sold to business customers, and changes in geographic mix."
- Server and tools revenue was impressively flat, with an improvement in operating income of a whopping 23 percent. Inside those numbers, Windows Server and developer tools revenues were declining, while Enterprise CAL Suites and System Center revenues went up.
Posted by Scott Bekker on October 26, 20090 comments
With a load of new products to promote, it looks like HP and Microsoft are funding the HP/Microsoft Frontline Partnership again. (Tip of the hat to Arlin Sorensen's Peer Power blog for finding this nugget.)
For those of you unfamiliar with this great program, it's for partner companies that belong to both the HP and Microsoft partner programs. Funding is available for events and there are marketing campaign materials available for Microsoft software packaged with HP hardware.
In this version, the two vendors are suggesting campaigns around Windows 7 with HP notebooks and desktops, Exchange 2010 with HP ProLiant G6 servers, Windows Server 2008 R2 or Essential Business Server or Small Business Server 2008 with HP ProLiant servers, SharePoint 2007 with HP ProLiant servers, and Microsoft Hyper-V with HP storage and servers.
We've been big fans of the Frontline program at RCPU. In fact, our biggest complaint was that even as Microsoft and HP were promoting the program last year, they were running out of money for it, and the bean counters in the companies weren't committing new dollars.
My advice is get in on this deal fast before the money runs out again.
Posted by Scott Bekker on October 26, 20090 comments
Last week, Lee posted a note about Gartner's revised IT spending figures for 2009 and their forecast for 2010.
He hit on the most important point -- that Gartner doesn't expect IT spending to recover to 2008 levels until 2012.
Like many in the industry, I've been following IT spending projections closely over the last year, especially Gartner's, so I wanted to say a few more things about what Gartner's revised data seems to mean for the channel.
One point is that things are slightly better than they were. Gartner released this latest projection last week to make a splash around its Gartner Symposium/ITxpo, and the new forecast reflects some of the more positive numbers that are showing up in tech companies' latest round of earnings.
As awful as the numbers are, they're slightly better than they were earlier in the year. In July, drawing on data from the dismal first quarter, Gartner projected a 6 percent drop in IT spending, and a 2.3 percent increase in IT spending for 2010. Now, looking at data for more of the year, the bleeding isn't quite as bad, though it's still plenty grim. Gartner is calling for a 5.2 percent decline in IT spending for all of 2009 and an increase in IT spending of 3.3 percent for 2010.
For those of you who say, "Wait, a drop of 5.2 percent as opposed to 6 percent isn't much to get excited about," I'll say this: Absolutely true, but the trend is at least improving. Prior to this forecast, Gartner's projections just kept getting worse. They went from forecasting 5.9 percent growth for 2009 to forecasting 2.3 percent growth as the financial crisis hit to the -6 percent forecast of July. For the first time, things look slightly better than they did from one Gartner forecast to the next. We appear to have reached the abyss and taken a half-step back from it.
That said, with all the slightly improving economic forecasts, I was hoping that when Gartner rechecked all their IT spending tripwires, they'd find better figures. I was hoping we'd be looking at maybe a 3 percent drop for the year. I guess I'm too optimistic.
Other notes of interest from Gartner's latest forecast:
- A 16.5 percent decline in hardware spending for 2009, and a flat projection for 2010. If you're into hardware, Gartner's findings indicate, start looking for other revenue sources because things aren't going to get any better any time soon.
- IT services spending should increase 4.5 percent in 2010 from a forecast of $781 billion in worldwide spending for 2009.
- Software spending should see a healthy swing in 2010 from a forecast decline of 2.1 percent in 2009 to growth of 4.8 percent.
Posted by Scott Bekker on October 26, 20090 comments
Intermedia, the New York-based hosting giant with a network of 3,500 private-label resellers, is planning to pass on Microsoft's brand-new Microsoft Communication Services marketing campaign to its reseller partners.
The move by Intermedia shows that at least one major hoster has overcome initial doubts about the Microsoft-centric branding of the program and moved to use the resources to generate sales momentum within its network of reseller partners.
Microsoft Communication Services is a relatively new theme that Microsoft hopes will help it overcome the challenges of marketing hosted messaging and collaboration services to SMB customers.
A Microsoft Communication Services "Ready to Go" campaign formally launched last week provides sales tools to help hosters and their reseller partners sell hosted Exchange, SharePoint, Office Communications Server and other Microsoft services using terms that SMB customers respond to rather than abstract product names.
"It's essentially a marketing package in the best sense of the word 'marketing,'" said Robert E. Leibholz, Intermedia's vice president of sales and business development, during an interview at the Microsoft Worldwide Partner Conference (WPC) in New Orleans last week.
Microsoft announced the addition of Intermedia, Apptix and U.K.-based Outsourcery to the Microsoft Communication Services program at WPC. Microsoft initially set the program up as a pilot with Comcast Corp. in November 2007. Comcast won a 2009 Microsoft Partner Award at the WPC for its efforts with the hosting campaign.
Leibholz said Intermedia initially had concerns about the Microsoft-centric messaging of the marketing collateral in the "Ready to Go" campaign, a concern other hosting companies with private-label resellers, such as groupSPARK, had expressed to RCP in an article describing the program in May.
But Microsoft ended up being flexible about where different companies' logos could appear on the marketing materials, which made a big difference for Intermedia, Leibholz said.
He expected the "Ready to Go" materials to make a big difference for the Intermedia reseller partners. "I think it's really going to professionalize and enhance the marketing capabilities of our private-label partners," Leibholz said. "Microsoft doesn't always hit home runs, but this looks like one."
The company, which in July reached the milestone of hosting more than 200,000 premium Exchange mailboxes, will offer some elements of the "Ready to Go" campaign to all of its reseller partners.
Posted by Scott Bekker on July 20, 20090 comments
Wondering what Microsoft's Azure platform has to do with you as a partner? One simple answer is you'll be an early adopter of Azure if you use the partner Demo Showcase.
The Demo Showcase is a tool that allows Microsoft partners to demonstrate Microsoft technologies to customers without setting up an expensive demonstration center at their offices and dragging customers there, or without needing a pricey portable assembly to take on sales calls.
The Demo Showcase was previously distributed to partners as a DVD set and some demos were available online.
Last week at the Worldwide Partner Conference (WPC) in New Orleans, Microsoft unveiled the next release of the Demo Showcase, which is a reference platform for Azure. Demos are now hosted in the Azure cloud, and Microsoft uses Silverlight as the client.
But Azure serves as more than a new destination server for the demos. Partners can customize pieces of demos, add their own components and resequence it all. "Think of it as the ability to remix demos," said Ross Brown, vice president, solution partners and ISVs, Microsoft Worldwide Partner Group.
A finished demo can be downloaded as an executable for customer meetings in places with spotty connections. Partners can also choose to make their demos available to other members of the Microsoft Partner Network.
Posted by Scott Bekker on July 20, 20090 comments
Microsoft reports its financial results for the quarter on Thursday, and Wall Street analysts are looking for drops in earnings per share and revenues compared to the year-ago period.
An average of analyst forecasts calculated by Thomson Reuters shows an expectation that Microsoft will post earnings of 36 cents a share on $14.38 billion in revenue. During the same quarter last year, Microsoft earned 46 cents a share on $15.84 billion in revenue. Microsoft on Thursday will also report its results for the full fiscal year that ended June 30.
It will be interesting to hear Microsoft's forecast for PC demand for fiscal year 2010, which runs from July 2009 to June 2010. A drop in PC demand has taken the wind out of Microsoft's Windows and Office revenues during this last fiscal year. Some technology analysts are expecting a slight pick-up in PC demand, based on moderating declines in the first half of this year. From Microsoft's perspective, that pickup is offset by an increasing demand for netbooks, which sell with lower-margin editions of Windows.
Posted by Scott Bekker on July 20, 20090 comments
P2P pioneer Arlin Sorensen was at the Microsoft Worldwide Partner Conference (WPC) last week and has a nice recap of the show on his blog, Peer Power.
As a key member of the Microsoft Small Business Specialist Community, Arlin had a pretty positive take on one particular aspect of the new Microsoft Partner Network. "They are putting Small Business where it belongs -- as a real competency -- and appear to be raising the bar a bit, as well, which is welcome," Sorensen writes.
Check out the rest of his entry here.
Posted by Scott Bekker on July 20, 20090 comments
Our readers had some thoughts about the changes to the Microsoft Partner Network. The initial response, at least among those motivated to post, is quite skeptical.
My favorite comment came from Peter Hohaus of Melbourne, Australia, who left this on one of the blog entries:
"The following quotation is frequently attributed to Petronius. Whoever said it it quite neatly sums up my reaction to the Partner Program changes: 'We trained hard...but it seemed that every time we were beginning to form up into teams, we would be reorganized. I was to learn later in life that we tend to meet any new situation by reorganizing; and a wonderful method it can be for creating the illusion of progress while producing confusion, inefficiency and demoralization.'"
I'm not sure it's fair to the work Microsoft has undertaken here, but the sentiment is pretty hilarious. I hadn't seen that quote before, although it's apparently an old standby. Petronius, according to the occasionally reliable Wikipedia, was a Roman courtier during the reign of Nero. As Peter suggested in his comment, the Petronius attribution appears to be apocryphal, and the quote probably emerged in the second half of the 20th century.
John Maultsby in Kansas City writes:
"Whatever happened to the ISV or Independent Software Developer status? There are many ISV's that develop using MS tools for MS platforms that do not sell directly to the end user. Our dealers or system integrators sell and install the products for the end user. Where do we fit?"
It's a fair question. While I haven't seen detailed descriptions for what each of the new Competencies contains, I'm going to venture a guess that the Software Development Competency is ISVs' new home. I hope to dig into details of the Competencies with Microsoft soon.
A reader in Virginia opines:
"This sounds like a way to weed out some Gold partners from the top tier. Where's the benefit for the other 95 percent of us?"
I think this reader has nailed it on the weeding aspect.
And finally, another reader from Houston says:
"It ain't broke. 'Standard'? Couldn't they have hired an ad agency to come up with some descriptor less blah and more customer confidence-inspiring than 'Standard'? 'Standard' sounds like the level of competence and customer concern you get at discount software stores. Not persuasive. Not conducive. Not inspiring."
Posted by Scott Bekker on July 16, 20092 comments
I've been watching Microsoft product demos and vision videos since 1998, and I have to admit I'm jaded because of the experience.
For example, I feel like I've been watching unified communications videos for a decade, and they're always promising that implementations are available now to allow you to see user presence, switch communication from IM straight into a voice call, take priority work calls in your car, etc.
At first, the "gee whiz" aspect was tempered by the heavy integration work required, which meant nearly no one was implementing the systems. By the time those solutions emerged from reliance on vaporware or unreliable or prohibitively expensive hardware, the demos had become far less interesting. And there was that hangover feeling of having been fooled by the earlier demos.
But I saw something relatively jaw-dropping this week at the Microsoft Worldwide Partner Conference (WPC). Microsoft Business Division President Stephen Elop showed a video on Wednesday of what the digital world could look like in a decade or so. Surface computing was ubitiquitous on walls, floors and windows, and hand-held devices were credit-card sized with fingertip control and full-surface video.
It was pretty inspiring stuff, the kind of thing that makes me love being involved with this industry.
I appreciate that Microsoft isn't making any promises that you can start to do this stuff now, or even in a couple of years. Bill Buxton, a principal researcher with Microsoft Research, provided exactly the right context for the video after the audience watched it: "The key thing is you need that envisionment to give you focus, because if you don't know where you're going, every direction is the right direction for how you think strategically."
You can see the video on YouTube here.
Posted by Scott Bekker on July 16, 20093 comments
Microsoft's channel investment will grow $400 million in fiscal year 2010 to $3.3 billion, COO Kevin Turner said at the Microsoft Worldwide Partner Conference (WPC). The figure is up from a stated amount of $2.9 billion in 2009, which was a big bump from a $2.3 billion figure for 2008. Turner made the point that while Microsoft was holding overall R&D investments flat at $9.5 billion, the channel investment was going up.
The declaration of the partner investment got applause from the audience on Wednesday. But I have to say that it left me scratching my head. Ever since the economy tanked in September, I've heard about nothing but cuts to Microsoft programs. I've heard that general managers have had less in co-marketing funding to distribute to partners, and I've heard of funding for other co-marketing efforts being frozen. Meanwhile, the WPC itself in New Orleans seemed a much more frugal affair than in past years.
If Microsoft didn't spend all of its $2.9 billion on partners last year, it's hard to blame the company. Everyone was cutting back on everything. But if it really did get spent, and it's really going up this year, I'm hard-pressed to say where that money is going. If you have any idea, help me out here. E-mail me at [email protected].
Posted by Scott Bekker on July 16, 20090 comments
The headlines on the Windows Azure Platform out of the Microsoft Worldwide Partner Conference (WPC) focused on the pricing and the November release date. For thorough details on the pricing, which will be roughly comparable to those of Amazon Web Services, see Kurt Mackie's news piece.
But Microsoft also spent a lot of time this week laying out what it sees as the major partner opportunities in the Azure cloud computing platform. Those partner opportunities, in turn, had a lot to do with the pricing models Microsoft introduced.
In a conversation at WPC, Prashant Ketkar, director of product marketing for the Windows Azure PMG, discussed some of the likeliest partner business scenarios with RCP.
The most obvious is ISVs. "They now have a platform to deliver their Software as a Service [SaaS] in a globally reachable manner," Ketkar said. These are prime customers for the pay-as-you-go, or consumption-based, pricing models. If business takes off, they'll have the cash flow to pay for the scale. If not, ISVs are out very little. "If you are a start-up developer, for them, this is it. Why invest in the capital of buying hardware or software?"
A little less obvious but also fairly compelling is the opportunity for systems integrators and custom application developers. "Now I can go to my customer and talk to them about solutions, not necessarily about having to invest in the capital to buy hardware and software," Ketkar said. This scenario is a key driver for the parallel subscription-based pricing model.
"Systems integration companies who build consulting services or do systems integration work for large enterprise or mid-market customers typically respond to a request for proposal," Ketkar said. "The customer wants to know, 'Is it going to cost me $20,000 to implement that solution through an SI partner, and then $2,000 on an ongoing basis per month?' The unpredictability of the consumption model is not good. For them, a subscription-based or predictive pricing model becomes very, very important."
There's also a 5 percent discount in pricing to encourage and reward members of the Microsoft Partner Network for using the system. I'm not convinced many partners will be drawn to a new platform by a discount of a few points, but I do believe Microsoft is avoiding the mistake it made with the Business Productivity Online Suite (BPOS) of billing customers directly rather than letting partners bill their customers. Partners who build services on Azure will get the bill from Microsoft, and can pass it on to customers in whatever way makes sense.
As for the overall opportunity, estimates are all over the map. Ketkar says analyst estimates range from a $20 billion to $50 billion opportunity now to a $100 billion to $150 billion opportunity in 2013.
Whatever the top-line number, Ketkar says the lion's share of the market will belong to the ecosystem. "We think that the majority of that, 60 to 70 percent, is in the partner ecosystem. The rest is what the cloud providers would make -- Microsoft, Google, Amazon, hosters."
Posted by Scott Bekker on July 15, 20090 comments