Ozzie's Vision of the Cloud Includes Partners
One of the things I thought was missing from the Microsoft Worldwide Partner
Conference earlier this month was a speech from Ray Ozzie. While Microsoft made
substantive announcements about its Software
Plus Services strategy
and the role it hoped partners would play, the conference
didn't include any kind of overarching vision on S+S from the company's chief
technical officer and resident expert on the subject.
Microsoft did drag out Ozzie at its Financial Analyst Meeting last week. In
some ways, that's more interesting. In the course of giving Wall Street the
big picture, Microsoft executives sometimes reveal how much they are -- or are
not -- thinking about the channel in their plans.
First the good news. Ozzie mentioned partners -- and not just ISVs but also
VARs -- repeatedly during his
talk. He wasn't the only one. Chief Operating Officer Kevin Turner also
emphasized to the financial analysts that Microsoft's 645,000 partners,
which he described as "the most comprehensive partner ecosystem in the
technology industry," were a "tremendous strategic asset" for
the company. It's good to hear Turner talk about the importance of partners
to audiences not made up entirely of Microsoft partners.
Now for the mixed news from the Ozzie talk. Ozzie painted a rosy picture for
the analysts about Microsoft's positioning as cloud computing approaches. He
repeated all the usual stuff about how Microsoft's ability to be on the client,
on the server or in the cloud is just what the real world needs.
"Every major technology inflection point over the years, at least as long
as I've been in this business, has yielded new opportunities for those who are
able, willing and well-positioned to act on those opportunities," Ozzie
said, with the implication that Microsoft was able, willing and well-positioned.
Certain partners will be ready, or will make themselves ready, to join in on
this envisioned money-fest. "Many business ISVs and many VARs will be looking
to move their applications and solutions to the cloud just like we have,"
Ozzie said. "For them, like us, this technology shift towards services
represents a significant opportunity, a chance for them to deliver to their
enterprise customers the power of choice within their own application or solution."
He called Microsoft's opportunity in the space "perfectly aligned"
with the opportunity for partners.
The reason that's mixed news for partners isn't because any of it isn't true.
It's the "many" modifier Ozzie uses to describe ISVs and VARs. The
opportunities will be out there, but the channel has to change aggressively
to meet it.
Later in the Q&A portion, Ozzie elaborated on how partners should change
to take advantage of Microsoft's cloud computing infrastructure -- a key point
given the aggressive pricing and partner margin structure in the recently announced
Office S+S offerings (partners get 12 percent for bringing in a customer and
6 percent annually for renewals).
"I think the high-level model that I would use is the enterprise space.
The costs of the service will be buried and embedded within the higher-level
pricing of the offering," Ozzie said, adding that for VARs, "margins
will increase as you go up the stack in terms of value."
Ozzie's financial analyst talk also offered some food for thought for partners
involved in Windows or Office deployments. He explained a little of his thinking
on how S+S might store both settings and data in the cloud. He discussed the
idea in the context of home users, but it could have a substantial impact on
the way organizations buy and use computers.
"By removing the psychological burden of managing many devices, by making
these devices feel more like smart appliances, by removing the worry about setting
up a new or additional PC or laptop that you might purchase, I believe we'll
ultimately see a significant opportunity for growth because of multiple PCs,"
I would have liked to hear more elaboration on Ozzie's vision for partners
in both cases -- but at least he's telling financial analysts where partners
will fit in. What do you think about Ozzie's vision for partners? Let me know
Posted by Scott Bekker on July 30, 2008 at 11:58 AM