Push for Answers on Software as a Service
Partners have good reason to be concerned as Microsoft grows its SaaS business.
- By Scott Bekker
- June 01, 2006
In the March
issue of Redmond Channel Partner
, Rich Freeman's cover
story took a comprehensive look at Software as a Service. The gist
was that Microsoft is moving rapidly toward this new Internet-based
delivery model, and, as a partner, you need to start thinking about
where that will leave you.
When we started working on the article, a lot of information was
coming out of Microsoft about this services push, including internal
memos from Bill Gates and Ray Ozzie and the company's efforts on
Windows Live and Office Live.
Although the memos were highly publicized outside the company,
it was hard to tell at first how much momentum they had inside.
Also, with the main memo coming from new guy and Chief Technical
Officer Ray Ozzie, instead of Chairman and Chief Software Architect
Bill Gates, who is the traditional sender of disruptive internal
missives, it was hard to know how seriously to take the messages.
But evidence that the online-services initiative is real, and that
the company is serious about change, keeps piling up. Recently,
Fortune magazine ran an inside account in which key Microsoft executives
spoke frankly about the business discussions and sense of urgency
permeating the upper echelon at Microsoft.
A few details from the Fortune article bring sobering news for
partners. Microsoft is looking seriously at providing hosted e-mail
and file server capability to enterprise customers. And the company
is looking at building up a global infrastructure of server farms
that could support that business model. How serious is Microsoft?
Ozzie has a 300-page printout on his desk detailing the locations
of telecom and power sources around the world.
For Microsoft, the emphasis seems to be on matching Google and
Yahoo. As big as Microsoft is its leadership is genuinely concerned
about being outmaneuvered by its search-engine rivals. But just
because Google and Yahoo are the ones in the crosshairs doesn't
mean that partners won't feel the impact when big changes hit.
It's been apparent since last year that Microsoft is approaching
small business customers directly online. With ad-supported free
e-mail and Web sites for companies with 10 or so employees, the
Office Live push threatens partners whose business relies on implementations
at the smallest customer sites. The strategic fight with Google
and Yahoo signals that Microsoft could also soon chase partners
up the value chain when it comes to midsize and even enterprise
You need to push hard for answers from your Microsoft contacts
about how and when these services are going to be real. And you
need to keep after partner executives to make sure they're thinking
about ways for partners to fit into the picture. The Microsoft Worldwide
Partner Conference in July would be a great place to start that
Scott Bekker is editor in chief of Redmond Channel Partner magazine.