Channel Call

S+S Starting Gun Fired

Microsoft's software and services combo takes a running start at competitors with "deskless" versions of its Office tools.

For three years, RCP and other voices in the industry have urged Microsoft to get specific about its plans for Software as a Service (SaaS), especially in terms of its impact on the channel. In adjusting to the SaaS model, Microsoft followed a process that felt interminable outside Redmond, but seems to have been quite accelerated inside the company. At last, the details are out.

Microsoft put meat on the bones of its Software plus Services (S+S) strategy at the Worldwide Partner Conference (WPC) in Houston in July, laying out aggressive customer pricing and specifics about partner compensation.

The details of the programs are relatively simple. Microsoft is introducing two suites-one for desk-less workers, such as nurses and factory-floor employees, and another for office workers. The Deskless Worker Suite costs $3 per user per month and includes Exchange Online Deskless Worker and SharePoint Online Deskless Worker. The Office Worker Suite is priced at $15 per user per month and includes Exchange Online, Office SharePoint Online, Office Communications Online and Office Live Meeting. Partners get 12 percent for bringing a customer to Microsoft and 6 percent per year in recurring revenue if they can maintain their status as the partner of record for the account.

Above all, it's good to have specifics about how S+S will work for partners. We received some details earlier with Microsoft Dynamics CRM Online, but it was a specialized product with a specialized user set and a specialized channel. Earlier Microsoft Online announcements were for very high-end deployments of 5,000 or more seats. The new offerings are the first to affect a broad set of partners. It's also important to know that Microsoft is serious about pulling partners along.

But if the details of Microsoft's program are simple, the implications for Microsoft's diverse channel community are fiendishly complex. Hosting partners and their networks of reseller partners that have made a strategic bet on selling hosted Microsoft Exchange are in the most immediate difficulty. They must scramble to differentiate themselves from Microsoft's vanilla offerings.

Those partners that offered Exchange as an element of a broader solution are much more enthusiastic. Exchange hosting, in particular, was a checkbox for them, which they can now outsource to Microsoft's gargantuan new data centers. Resellers and solution providers of on-premises implementations are also eyeing the new offering as a foot in the door at customer sites that are currently too small or resource-constrained to buy a full-fledged package. (See this month's Q&A with Spinnaker Network Solutions Inc. CEO Mitchell Cannady for insight into how one partner is using that strategy in the Dynamics CRM Online space.)

Microsoft's unveiling of its program is like firing a starting gun in the channel's race toward an S+S/SaaS world. These next few years are going to be mighty interesting.

What do you think of the Microsoft S+S program details? Send me your thoughts-I'm at sbekker@rcpmag.com.

About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.