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What Microsoft Bought and Why in Its Busiest M&A Year Since 2008

Microsoft was busier on the merger-and-acquisition front in 2015 than it has been in any year since 2008.

With two weeks still to go, Microsoft has acquired 14 companies in a calendar year that has seen a ton of M&A activity across the industry.

"It's white-hot," said Mike Harvath, CEO of Revenue Rocket Consulting Group, the Minneapolis-based firm that does a lot of M&A consulting in the channel, of the overall acquisition environment in 2015. Industry deal volume growth is expected to be up by double digits in 2015 with more of the same coming next year. "The bigs like Microsoft are buying around SMAC and the small guys are consolidating," Harvath said, using an abbreviation for social, mobile, analytics and cloud.

Many of the companies that industry giants like Microsoft are snapping up got investments right after the downturn and founders and owners are looking to monetize, Harvath said. "We've got some bubble and frothiness on the low end of the market due to this pressure to transform, and there's a bubble at the top end, primarily led by SMAC."

To be clear, there are different metrics for M&A activity. This year is clearly busy, although some of the years with fewer deals had some blockbusters. Case in point, 2014, when Microsoft completed only 11 acquisitions, but one of them was the $2.5 billion deal for Minecraft developer Mojang.

Source: Microsoft Investor Relations

Looking at the company's purchases in 2015, many fit Microsoft's unique spin on SMAC, with a focus on personal productivity, machine learning-heavy analytics and security-specific cloud acquisitions, while at the same time padding strategic products like Office 365, Dynamics CRM and System Center with acquisitions that complement the existing feature set.

Mobile/Personal Productivity
In CEO Satya Nadella's nearly two years at the helm, Microsoft has de-emphasized Windows as a mobile phone platform and instead focused on making Microsoft software the best personal productivity software no matter the device OS. A big signifier of that trend was Microsoft's decision in late 2014 to buy someone else's smartphone e-mail software (Acompli) and slap the Outlook brand on it. It was a big move for Microsoft to essentially say, "Outlook is one of our most storied products, but someone else made a better version for the iPhone so we'll buy it and make that the new Outlook."

This year saw the continuation of Microsoft snapping up mobile app providers for other traditional Outlook functions, calendaring and task lists. The specific acquisitions in that area where Sunrise, a calendar-app maker for iOS and Android, and 6Wunderkinder, maker of the popular Wunderlist to-do list app.

Another mobile productivity acquisition with implications for Office 365 and Office Graph is Mobile Data Labs, which specialized in mobile apps that simplify and automate mileage, expenses, time tracking and reimbursement for what Microsoft describes as the "self-directed workforce."

Combining mobility, personal productivity, analytics and social is Datazen Software, which Microsoft acquired in April. Datazen made one of the most promising early Windows 8 apps for data visualization and Microsoft plans to plug the technology into its Power BI strategy.

Ed.'s Note: Microsoft also acquired teleconferencing firm Talko on Dec. 22, after this blog was published. Read about that acquisition here.

Analytics
Another analytics acquisition with a foot in the personal productivity world is organizational analytics specialist VoloMetrix, which Microsoft acquired in September. The company's software is supposed to help Microsoft's customers answer complicated questions like, "How can I improve my e-mails to ensure my communications are impactful?" and "Am I spending my time focused on my priorities?" according to Rajesh Jha, Microsoft corporate vice president for Outlook and Office 365. Microsoft plans to integrate the VoloMetrix technology with Office 365, Office Graph and Delve Organizational Analytics.

At the beginning of 2015, Microsoft bough Equivio, which the companies described as a provider of machine learning technologies for e-discovery and information governance. Microsoft has already productized Equivio in one of its most strategic product lines -- Office 365. At the beginning of this month, Microsoft launched the top-tier Office 365 E5 SKU, which bundles Equivio Analytics for e-discovery as one of several exclusive features along with secure attachments and URLs, access control, Power BI Pro, Delve Analytics, cloud PBX and PSTN conferencing.

Key to machine learning is statistical computing and predictive analytics. Microsoft got back to its programming language roots while also increasing its vertical integration in that strategic area with the acquisition of Revolution Analytics. The company was a commercial provider of software and services for R, a programming language for analytics.

Ed.'s Note: After this blog was published, Microsoft acquired analytics firm Metanautix on Dec. 18. Read about that acquisition here.

Cloud
While Microsoft has a huge arsenal of cloud technologies, Redmond buffed its capabilities in security and application management in 2015 via acquisitions.

Adallom, one of several Israeli companies Microsoft bought this year, has a cloud access security broker that works as a Security as a Service solution. Microsoft plans to use the Adallom technology to complement Office 365, the Enterprise Mobility Suite and Microsoft Advanced Threat Analytics.

Microsoft also acquired close partner Secure Islands, which built a data protection solution on top of Microsoft's rights management technology. Microsoft expects Secure Islands' technology to enhance the capabilities of the Azure Rights Management Service.

Just as Secure Islands works across on-premises systems, Microsoft cloud services, third-party services and Windows, iOS and Android devices, another acquisition, BlueStripe Software, gives Microsoft a quick step up into a hybrid environment. Microsoft customers were already using BlueStripe to extend System Center with application-aware infrastructure performance monitoring, according to a blog post by Mike Neil, Microsoft general manager for Enterprise Cloud, announcing the acquisition. Microsoft planned to discontinue BlueStripe as a product and integrate it into System Center and the Operations Management Suite.

Dynamics CRM
Improving Dynamics CRM was the focus of three separate acquisitions in the second half of 2015.

Adxstudio Inc. is another longtime partner that became part of Microsoft via acquisition. The company's Adxstudio Web portals are built natively on Dynamics CRM to allow customers to connect and engage with sales and customer services, according to Microsoft Corporate Vice President for Dynamics CRM Bob Stutz, who said the solutions will be available to all Dynamics CRM customers, both on-premise and in the cloud.

Microsoft also picked up FieldOne Systems LLC for its field service management solutions that include work order management, automated scheduling, workflow capabilities and mobile collaboration. Microsoft positions FieldOne as a fit with the functionality Microsoft acquired with Parature in early 2014.

Although the company name doesn't sound like it, the acquisition of Incent Games Inc. was also Dynamics CRM-related. Incent developed FantasySalesTeam, a sales gamification platform that Microsoft is integrating with its CRM product.

Microsoft had one other large acquisition in 2015, but it's on the pure gaming development side of the business. Microsoft bought Havok, the real-time 3-D physics creator, from Intel. Microsoft plans to include Havok in its tools and platform components for developers and to continue to license the development tools to Havok's existing partners.

Microsoft 2015 Acquisitions
Date Company
Nov. 9 Secure Islands
Nov. 5 Mobile Data Labs
Oct. 2 Havok
Sept. 28 Adxstudio Inc.
Sept. 8 Adallom
Sept. 3 VoloMetrix
Aug. 3 Incent Games Inc.
July 16 FieldOne Systems LLC
June 10 BlueStripe
June 2 6Wunderkinder
April 14 Datazen Software
Feb. 11 Sunrise
Jan. 23 Revolution Analytics
Jan. 20 Equivio
Source: Microsoft Investor Relations

Posted by Scott Bekker on December 16, 2015 at 10:04 AM0 comments


Survey: IT Department Dominance of Tech Purchases in Decline

One tech trend we've been hearing a lot about over the last few years is the idea that the IT department's dominance of the technology purchasing process is declining.

Nintex added some data points to the argument Wednesday in releasing results of a survey of about 150 of its 1,500 channel partners. Nintex sells business productivity software and cloud services that work with Microsoft Office 365, Microsoft SharePoint and Salesforce.com, among other platforms.

Among the survey's findings:

  • 40 percent say the buyer in the sales process has changed over the last year.

  • Line-of-business (LOB) leaders are present 37 percent of the time in the sales process for software and technology purchases, with finance and procurement present in nearly a quarter of the deals.

  • The marketing department is playing an increasing role.

  • 26 percent see fractured relationships between IT and other departments.

This infographic summarizes its other data:

[Click on image for larger view.] Source: Nintex

"As organizations continue their digital transformations, channel partners must expand their engagement with customers to focus their effort with LOB leaders and others outside of IT as these stakeholders have a much greater impact and influence on buying decisions than ever before," said Nintex VP of partner strategy and srograms Josh Waldo in a statement. "There is a significant and growing opportunity for the channel to act as the broker between the Sales, Operations, Marketing, and IT departments within their customers' organizations especially as these customers navigate through digital change and work to make their businesses more autonomous rapidly."

Posted by Scott Bekker on December 16, 2015 at 9:01 AM0 comments


Survey: More Microsoft Partners Selling Azure, Fewer Selling Windows

More Microsoft partners are including Azure in solutions they sell to customers while fewer partners are selling the Windows client than they did a year ago, according to a new survey of RCP readers.

The shifts align with Microsoft's changing emphasis from a PC operating system-centric business to a cloud services company.

Azure has been surging as a cloud platform over the last year, running a fast second behind the market leader Amazon Web Services (AWS), according to market researchers. Microsoft has released new Azure services on a near-weekly basis, and also moved to expand the ways partners can offer Azure.

On the other hand, the last year has been an unprecedented trough for desktop Windows as a partner opportunity. An ongoing, historic decline in PC sales, the new free upgrade options to Windows 10 for consumer and low-end business versions, and the usual corporate upgrade delay following a new release appear to be taking a toll on partners' sales of the client OS in their solutions.

To be clear, far more partners are selling Windows than Azure. About 300 partner readers responded to the question, "What Microsoft products do you commonly include in customer solutions?" in RCP's 2014 and 2015 surveys.

Azure climbed 10 percentage points, from 29 percent in 2014 to 39 percent in 2015. The Windows client dropped 8 percentage points, from 64 percent in 2014 to 56 percent in 2015.

The most popular products for Microsoft partners to sell this year were Windows Server (68 percent), the Office suite (65 percent), SQL Server (59 percent), the Windows client and Office 365 (56 percent each).

Included for the first time in the survey was the Microsoft Enterprise Mobility Suite (EMS) -- a bundle of Azure Active Directory Premium, Intune and Azure Rights Management -- which Microsoft has touted as its next $1 billion product. While it became available as part of Enterprise Agreements in 2014, it wasn't until the second calendar quarter of 2015 that it hit Open Licensing and later in the year the Cloud Solution Provider (CSP) subscription model. About 12 percent of survey respondents said they were including EMS in customer solutions.

Posted by Scott Bekker on December 09, 2015 at 9:00 AM0 comments


New Signature's 2015 Acquisition Tear Continues

New Signature, the Microsoft U.S. Partner of the Year for both 2014 and 2015, acquired yet another Microsoft ecosystem player this month in its venture capital-fueled quest to be the premier Microsoft partner in North America.

The acquisition of Atlanta-based Microsoft partner InfraScience this week adds 55 employees, bringing Washington, D.C.-based New Signature to 250 employees.

"Our aspiration is to be the go-to partner for Microsoft across North America," said New Signature CEO Jeff Tench in an interview.

Tench joined the company as CEO in April as part of a $35 million cash infusion from Alexandria, Va.-based Columbia Capital. New Signature quickly took that capital to Toronto for a shopping spree, buying professional services firm CMS Consulting and cloud specialist Infrastructure Guardian in June, then snapping up application developer imason inc. last month.

New Signature had built a strong geographic presence in the Mid-Atlantic and the Northeast over its first dozen years. Tench said he and New Signature Founder and President Christopher Hertz immediately started looking to the Southeast as a logical adjacent territory for an acquisition.

"We talked to a lot of folks within the Microsoft ecosystem and every time we had a conversation, folks would mention two or three companies, and every time they talked about InfraScience and how great they were," Tench said.

For his part, InfraScience Co-Founder Jeff Meyer, who is now president, Greater Southeast, for New Signature, knew New Signature by reputation. "InfraScience is a company that's been in business about 12 years, almost exactly the same timeframe as New Signature. We kind of grew up together in the Microsoft ecosystem, and we knew of each other in the last few years, up on stages accepting awards for various different districts and regions," Meyer said. The companies started talking over the summer, closed the deal just before Thanksgiving and announced it Monday.

With additional offices in Charlotte, N.C., Durham, N.C., and Tampa, Fla., InfraScience completes the Eastern Seaboard puzzle for New Signature. "We have a contiguous territory effectively up and down the East Coast, including Eastern Canada," Tench said. He added that the company has employees in over 25 states and several countries and will continue to pursue business opportunities outside that territory when it makes sense.

With their deep focus on the Microsoft stack, both firms have a lot of technological overlap, Hertz said. However, InfraScience brings deeper expertise on identity and access management, said Hertz, adding, "Essentially, identity rules everything when it comes to the cloud."

InfraScience also has a more developed health care practice than New Signature did. "We've been working the health care industry for eight years," Meyer said. "We've acquired a lot of health care clients and specific expertise and some solutions that are unique to the market."

Meanwhile, New Signature has fully developed SharePoint, application development and managed services practices that InfraScience didn't previously offer that can now be extended to the acquired company's customer base.

While New Signature's management remains aggressive, Tench suggested that the torrid pace of acquisitions may tail off a bit in 2016.

"We're carefully considering where we go next. But we've got an awful lot to do within our existing markets and a lot more business to grow there, as well," Tench said. "I would say it will be a bit more balanced probably as we look at 2016 between organic versus inorganic investment."

A Busy 2015 for New Signature
Date Event Company Type HQ
April 22 Gets $35 million investment from Columbia Capital Venture capital Alexandria, Va.
June 1 Acquires CMS Consulting Professional services Toronto
June 1 Acquires Infrastructure Guardian Cloud governance and operations Toronto
Nov. 2 Acquires imason inc. Application development Toronto
Dec. 1 Acquires InfraScience Regional solution provider Atlanta, Ga.

Posted by Scott Bekker on December 02, 2015 at 11:06 AM0 comments


Ingram Micro To Buy Odin Service Automation Platform

Ingram Micro is buying the Odin Service Automation platform from Parallels Holdings Ltd. in a deal announced Wednesday that will shake up the cloud services provider market.

Distribution giant Ingram Micro is one of the most important players in the emerging cloud services provider market, including Microsoft's Cloud Solution Provider (CSP) program. In Microsoft's strategic CSP model, Ingram is one of the handful of 2-Tier distributors that serve as intermediaries for cloud service subscriptions between Microsoft and thousands of Microsoft partner resellers in each geographic market.

With Odin, Parallels developed a cloud marketplace technology infrastructure that provides APIs and storefronts to enable the provisioning, billing and managing of hundreds of cloud products by individual distributors, telcos and cloud services providers. In Microsoft's CSP ecosystem, Odin, AppDirect and Ensim Corp. had emerged to fill this technology niche.

The move toward vertical integration by Ingram Micro raises the stakes for other distributors, such as other U.S. Microsoft CSP 2-Tier distributors AppRiver, Intermedia, SherWeb, Synnex Corp. and Tech Data.

Ingram Micro expects to retain about 500 Odin employees when the deal closes later this month, assuming it meets closing conditions. Ingram Micro plans to keep using the Odin brand and to run the business as its own division led by executive vice president Nimesh Dave.

With the Odin business sold, Parallels will restructure itself as three business units owned by Parallels Holdings Ltd -- Parallels, Plesk and Virtuozzo. Parallels will be the name for the cross-platform solutions business unit, Plesk is the business unit for Parallel's Web management solutions for small businesses and hosters, and Virtuozzo will be the name for the unit for the container virtualization technology.

Posted by Scott Bekker on December 02, 2015 at 12:36 PM0 comments


Top-Tier Office 365 Subscription Pricing Set at $420 per Year

The top-tier SKU of Office 365, which Microsoft executives have estimated will open up tens of billions of dollars in greenfield opportunities, will cost $420 per user per year when it goes on sale Dec. 1.

Microsoft released pricing Monday on Office 365 E5, which replaces E4 as the top suite, with significantly more capability and a price tag nearly 60 percent higher than E4 (see the chart below). The new E5 suite also costs 75 percent more than the Office 365 suite's workhorse enterprise SKU, E3. On a per-user per-month basis, E5 costs $35, E4 is $22 and E3 is $20. E4 will continue to be available until the end of Microsoft's fiscal year in June 2016.

[Click on image for larger view.] Source: Microsoft

With the Dec. 1 availability, Microsoft squeaks by on a promise to offer E5 in calendar year 2015. Unveiled at the Microsoft Worldwide Partner Conference in July, E5 adds cloud-based calling and conferencing, business analytics and advanced security capabilities to Office 365.

"We think what that does is more than double the available market for Office 365," said John Case, corporate vice president of Office Marketing for Microsoft, in an interview at WPC. "The number that I put on the slide [in a WPC keynote] was a $56 billion addressable market. We think we're less than half that today with services like e-mail and the Office client."

Microsoft CEO Satya Nadella also used a $50-billion-plus figure in a call with financial analysts in describing the E5 opportunity a week later.

Case at the time promised E5's pricing would be aggressive relative to individual components. He cited Power BI as a $10 per user per month product, while arguing that Advanced Threat Protection, Lockbox and Web conferencing will compete with products that other vendors charge a lot of money for.

"When you add all that up, we'll be able to give a significant advantage to those that buy from one vendor for something like E5," Case said in the interview.

Exclusive to E5 among the Office 365 subscriptions are Equivio Analytics for eDiscovery, secure attachments and URLs, access control, Power BI Pro, Delve Analytics, and, via Skype for Business, both Cloud PBX and PSTN Conferencing.

A new feature set that E5 and E3 now share is archiving, rights management, data loss prevention and encryption. Meanwhile, E1, E3 and E5 all now have several new social and collaborative features, including Skype Meeting Broadcast, which allows virtual meetings via browsers and devices for up to 10,000 attendees.

Microsoft is also now offering PSTN calling as an enterprise plan add-on for $12 per user per month for domestic-only calling plans or $24 per user per month for domestic plus international calling.

Posted by Scott Bekker on November 30, 2015 at 1:53 PM0 comments


Gartner: Windows 10 Migration on Track To Be Fastest Yet

All that consumer activity around free upgrades will prime the pump for Windows 10 to become the most widely installed version of Windows ever, according to analysts at Gartner.

"In the consumer market, a free upgrade coupled with broad legacy device support and automatic over-the-air upgrades ensures that there will be tens of millions of users familiar with the operating system (OS) before the end of 2015," said Steve Kleynhans, research vice president at Gartner, in a statement Monday. "For enterprises, we expect that implementation will be significantly more rapid than that seen with Windows 7 six years ago."

Gartner's current prediction is that many enterprises will begin pilots in the first half of 2016 and half of enterprises will start their Windows 10 deployments by January 2017, with a goal of completing migrations in 2019, just ahead of the January 2020 end of extended support for Windows 7.

In a separate endpoint prediction, Gartner said touch will become much more price-competitive in the second half of 2016, and touchscreens will ship on a third of all notebooks by 2018.

Platform tracker StatCounter's Global Stats in September reported that in its first full month on the market Windows 10 had jumped out to a much faster start than Windows 8 had and a slightly faster start than Windows 7 had.

Windows 10 Windows 8 Windows 7
Worldwide 4.88% 1% 4.05%
United States 5.64% 1.16% 4.3%
United Kingdom 8.45% 1.17% 4.34%

Internet usage share for first calendar month since launch. (Source: StatCounter)

Posted by Scott Bekker on November 23, 2015 at 10:49 AM0 comments


Microsoft CFO: Undersupply, not Oversupply, the Concern for Surface Book

Microsoft CFO Amy Hood is not worried about "cannon balling" into the high-end laptop market. In fact, she's concerned about the reverse -- of not having enough supply.

Hood, executive vice president and chief financial officer, was responding to a question from Brent Thill, managing director at UBS, during the UBS Global Technology Conference in San Francisco. Thill wanted to know how Microsoft would avoid cannon balling into the market and instead go in gradually enough.

"Most of the feedback I'm getting now is, 'Where is the supply?' So it's funny that you ask about cannon balling anywhere. Currently the feedback is, 'I'd love to see the Surface Book terabyte in stock for holiday, or I'd love to see the i7,'" Hood said, according to a transcript of the conversation posted on Microsoft's Web site.

The Surface Book is Microsoft's inaugural first-party laptop, featuring a unique hinge and a detachable screen that becomes a "clipboard" -- a tablet with a pen for input.

The Surface Book entered general availability in Microsoft Stores and online on Oct. 26. However, limited quantities are shipping to the stores. According to the online store, none are currently available for immediate shipment. Three models are supposed to ship on Dec. 4 -- the Intel Core i5 with 128GB of storage and 8GB of RAM, the i5/256GB/8GB and the i7/512GB/16GB, which has a discrete GPU (dGPU) built into the keyboard. Models not shipping until Dec. 18, according to the online store, are the i5/256GB/8GB and the i7/256GB/8GB, both with dGPUs. The heavy hitter of the Surface Book line, both in price at $3,199 and in capability at i7/1TB/16GB with a dGPU, isn't listed to ship until Jan. 22.

While Hood essentially laughed off the "cannon ball" question, the question is a legitimate one for Thill to put to Microsoft, which is still getting its bearings in the computer hardware manufacturing market. Early oversupply issues with the first-generation Surface tablets led to fire sales of the devices at Microsoft conferences and a write-down of nearly $1 billion.

Hood did say Microsoft is working to improve the efficiency of its supply chain, which it has been honing now through four generations of the related Surface and Surface Pro tablets.

"You make progress to get more funding. You don't make progress, there's no need to have more funding," she said.

Hood also addressed the point of Microsoft developing the Surface Book, which competes more squarely with OEM partners than did the Surface and Surface Pro. Those business tablets were more of a category-creating device that other vendors have begun to follow. "We've got a lot of demand for high-end Windows machines from creatives and it's a good product to do it," she said of the Surface Book.

Posted by Scott Bekker on November 18, 2015 at 11:35 AM0 comments


Microsoft Points to Windows as a Service Opportunity with 'Threshold 2'

The free upgrade approach Microsoft took with Windows 10 may not be doing much for OEM partners in the way of PC sales yet, but Microsoft is trying to point the rest of the channel toward new opportunities with the OS.

In a blog post Sunday, Microsoft Worldwide Partner Group General Manager Gavriella Schuster used the occasion of the code-named "Threshold 2" update to Windows 10 to highlight opportunities created by the new Windows business model, which involves no cost for updating many versions of Windows 7/8/8.1 and involves regular updates for years to come.

Schuster highlighted three opportunities for partners to help customers with the transition to the Windows as a Service delivery model:

Ensure they have the infrastructure in place to handle these updates across all of their employees, devices, and circumstances. ...

Help your customers decide how a particular update could impact their business, which critical apps will need to be tested, and how updates will be deployed among departments. ...

For every app and device that walks in the door, you can help your customers create a plan for how it will be updated and when it gets retired.

Threshold 2, which began rolling out on Thursday, is the first major update of Windows 10. For that reason, it's the first opportunity partners have to get involved with customers' ongoing Windows 10 update cycle.

Also known as the November Update, Threshold 2 includes performance improvements, usability improvements and enhancements to Cortana and the Edge browser, among other features.

For business-focused partners, Schuster emphasized elements such as Windows Update for Business, Windows Store for Business, mobile device management, and updates to Azure Active Directory.

Posted by Scott Bekker on November 16, 2015 at 12:30 PM0 comments


The RCP CSP Directory is Complete for the U.S.

The new Microsoft Cloud Solution Provider (CSP) program is a complex piece of machinery, as we detailed in our feature about the ecosystem last month.

One of the most important elements of that ecosystem is the 2-Tier distributors, a.k.a. cloud distis. In most cases, Microsoft partners will be working through those 2-Tier distributors rather than directly with Microsoft to sell and support Office 365 and Microsoft's other cloud products through CSP.

We started an online directory of the 2-Tier distributors in the United States last month to accompany our print magazine package about CSP. Included were Q&As with the first five cloud distis -- AppRiver, Ingram Micro, Intermedia, SYNNEX Corp. and Tech Data Corp.

About mid-October, SherWeb, which was already a 2-Tier distributor in Canada, got accepted into the U.S. program, as well. We covered the news here.

Jason Brown, director of product management for SherWeb, just got back to us on our Q&A with details about the program, such as costs, white-label options, additional services and differentiators.

Check out the full directory to compare your CSP options.

Posted by Scott Bekker on November 12, 2015 at 11:18 AM0 comments


AVG Restructuring SMB Business, Laying Off 35

AVG Technologies is restructuring its managed service provider-centric SMB business division and laying off 35 employees as the unit struggles to meet the company's overall growth goals.

"As we discussed in the last earnings call, our expectation of the uptake of our cloud-based services was not where we wanted it to be as a result of our existing customers' commitment to our traditional on-premise product," said Gary Kovacs, CEO and managing director, according to a Seeking Alpha transcript of AVG's third-quarter earnings call Wednesday.

"To fix this, we have taken specific actions to improve our go-to-market strategy, including a significant restructuring and streamlining of the business and further simplification of our products to make it even easier for our resellers to go out with our products to serve their end customers' needs. These restructuring and leadership changes, we believe, will put us in the right position to capitalize on a large and growing opportunity," he said.

CFO John Little explained the restructuring would include "releasing approximately 35 employees," outsourcing a portion of the help desk and restructuring the management of the division. Little said the moves would save about $3 million over the next 12 months.

The SMB segment contributed $16.6 million of AVG's $108 million in revenues in the quarter, an increase of 13 percent for the SMB side. Part of the pressure for faster performance from the SMB unit comes from AVG's strategic exit from the third-party search business, which is dramatically reducing the company's revenues.

Despite the cuts, Kovacs said SMB remains a key focus area and pointed to the September release of AVG Business Managed Workplace Version 9.2 as evidence of AVG's ongoing efforts. "We believe strongly in this market, and we'll continue to invest as we have been in anticipation of accelerated growth in the future," Kovacs said.

AVG made a big move in the MSP market in 2013 with the acquisition of Level Platforms and made a major effort to expand the opportunity for those partners and its existing base of partners selling its cloud-based security solutions in the last year. However, the last two earnings cycles have revealed the company's challenges in the SMB market.

Posted by Scott Bekker on November 05, 2015 at 12:11 PM0 comments


BitTitan Packages Cloud Transition 'in a Box' for Microsoft Partners

One of the great challenges of the cloud transition for Microsoft partners is turning businesses that have been focused on server upgrade projects into recurring revenue-focused selling machines. Would it be possible to bundle that process into an in-a-box solution?

BitTitan is trying with a pair of Microsoft-focused offerings released this month called MSPComplete and a specialized version called CSPComplete, which is for the elite new group of Microsoft Cloud Service Provider (CSP) 1-Tier resellers.

"We provide the end-to-end solution to take someone from a systems integrator to a managed service provider," said Geeman Yip, CEO of BitTitan.

To date, BitTitan has been known for its Office 365 migration automation tools, which many Microsoft partners use to move customers from on-premises servers or from competing cloud services to the Microsoft cloud. Those tools, like MigrationWiz and DesktopWiz, are a part of the new MSPComplete offering.

Arguably more important in the partner transition to cloud than technical tools is the business process-related side, and Yip believes there's a role for BitTitan there, as well.

"I think there are people who will give you education around each one of these things, but education, as we know, over the last five years is not enough. We feel we can automate a good amount of this lifecycle so you only need to put in human intervention when necessary," he said.

Now BitTitan is putting its existing tools in an "onboard" pillar of MSPComplete and surrounding that pillar with two new sets of offerings -- one grouped in a "sell" pillar and another in a "service" pillar.

On the sell side, BitTitan has an internally developed SalesAutomation platform that consists of leads and scripts and an Estimator tool for up-selling/cross-selling, quotes, statements of work, and incentives and promotions.

On the service side, BitTitan is creating a HealthCheck tool with up-sell/cross-sell opportunities and is rolling out complementary products, such as e-mail archiving, data encryption and cloud management.

For the sales leads, BitTitan is using Microsoft's Azure Machine Learning to build out customer lists. "It's basically internal data mining," Yip said. "We crawl the Internet. We mine people's Web sites, we mine records, everything that's accessible from the Internet. We try to gather information from social media, et cetera, build a business profile about [a customer]. Discover what services that you advertise on the Internet."

Early efforts, both in scripts and in customer leads, are focused on the Microsoft Exchange migration opportunity. "The initial lowest hanging fruit is going to be around e-mail," Yip said. "We're currently working with Microsoft to load in scripts around CRM and Lync...and on OneDrive, competing with Box and Dropbox."

BitTitan's Estimator tool will pull in data from the Microsoft's incentives system to allow the partner sales team to give customers the best available offers and prices.

Jeffrey Tinnea, a technical program manager at BitTitan, said automatically pulling incentives will help many more partners use them. Tinnea, a former Microsoft employee, says many partners currently fail to take advantage of incentives. "It's not because partners don't qualify; it's because they don't know."

One of BitTitan's early MSPComplete partner/customers is ZAG Technical Services, a multi-competency Microsoft partner headquartered in San Jose, Calif. In an e-mail interview, Joe Foos, director of sales and marketing at ZAG, said, "The new MSPComplete enablement platform offers experienced Microsoft Office 365 migration service providers the opportunity to shorten the sales cycle significantly. It also works to accelerate the on-boarding, migration and Microsoft license usage activities that help customers start seeing real value from their investment right away."

Posted by Scott Bekker on October 28, 2015 at 12:23 PM0 comments