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Intermedia Becomes Microsoft Office 365 Syndication Partner

Intermedia, a large-scale provider of hosted Exchange mailboxes, is joining Microsoft's Office 365 syndication program.

Office 365 is Microsoft's second-generation version of the Business Productivity Online Suite (BPOS). Although it includes many enhancements, the most notable addition to BPOS in Office 365 is the option for customers to rent the full Office desktop productivity suite via monthly payments.

Michael Gold, president of Intermedia, said the addition of the Office suite was a key reason Intermedia is reselling Office 365 when it hadn't resold BPOS. "This does not change anything that we've been doing. Some Office 365 bundles offer some things that we don't," Gold said in reference to the Office 365 bundles that include Office. "Microsoft is a critical partner of ours. Our core services are built with Microsoft software underneath."

When Microsoft launched Office 365 in late June, it announced 20 syndication partners worldwide (see "For a New Category of Cloud Partner, Microsoft Relaxes Office 365 Billing"). The group, which didn't include Intermedia, consisted primarily of large-scale hosters, telecoms or companies with some other service they would offer in addition to Office 365.

A benefit of belonging to the new syndication program is the ability to bill customers directly. The rest of the 42,000 partners Microsoft has signed up to resell Office 365 receive referral and renewal fees per seat, but those customers are billed directly by Microsoft.

Intermedia executives have previously criticized BPOS, arguing that Intermedia's private-label hosted services, including Microsoft Exchange, were a better fit for smaller resellers than BPOS. Intermedia had recently posted a three-way comparison chart on its Web site aimed at highlighting the advantages of Intermedia's offering against Office 365 and Google Apps.

Asked why Intermedia was joining the program in the Office 365 generation rather than in the BPOS generation, Gold said, "It's got a better name, it's got more marketing power behind it, it's got more features and services, and they've got the program that's set up for companies like ours."

Intermedia manages more than 350,000 premium Microsoft Exchange mailboxes on behalf of customers and saw a 55 percent increase in new mailbox sales for the first half of 2011 compared to the same period of 2010. Even against that backdrop, the publicity behind the Office 365 launch has made a difference in the hosted business services market.

"The launch has increased the level of awareness for the types of services that Intermedia offers to a level that we haven't seen. I think we have Microsoft to thank for that," Gold said.

Intermedia announced its inclusion in the syndication program this month, and the company plans to start selling bundles that include Office 365 next quarter.

The company hasn't disclosed yet how it will bundle Office 365 with its own offerings, which include hosted PBX, online backup, Outlook backup, security, mobility and other services that Microsoft's suite packages do not include. Intermedia customers will use the same HostPilot Control Panel for Office 365 as they use for other Intermedia services.

In a statement, Aziz Ben Malek, general manager of Microsoft's U.S. Partner Hosting and Cloud Services, pointed to Intermedia's scale as a reason for the company's inclusion in the syndication program.

"We are excited to have Intermedia as an Office 365 partner given their successful track record as one of Microsoft's top hosted productivity solution partners -- and their commitment to a superior customer experience around support, migration and ease of use," Malek said.

Gold said the Microsoft syndication program does not include a way for Intermedia's 7,000 partners to private-label Intermedia's Office 365 bundles.

"This doesn't really impact our partners at all," he said. "Most of our partners look to us for private-label services. We're not even private labeling Office 365. It's hosted and managed within Microsoft's datacenters. Our partners for the most part take our products, and put their own brand on it. We'll continue to invest in that area of our business," Gold said, adding that over half of Intermedia's business comes through channel partners.

Microsoft's initial group of syndication partners were AppRiver, Atea, Bell Canada, Central Europe OnDemand, InterCall, Intuit Inc., Jack Henry & Associates Inc., KPN, Mamut, Orange, Premiere Global Services Inc., SKB Kontur, TDC Hosting, Telefonica, TeliaSonera, TELMEX, Telstra, UPC Business, Vodafone and Starhub.

About the Author

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

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