Anatomy of the Microsoft-L.A. County Office 365 Deal
    Microsoft unveiled a mega-deal with the county of Los Angeles this week  that covers Office 365 seats for 100,000 employees of the most populous county in the United States.  Here are some key channel takeaways from this five-year deal worth $72 million.
MCS Out Front: Microsoft  Consulting Services (MCS) is a source of controversy for the channel. Partners who  represent Microsoft products in the enterprise often come up against MCS in  deals and sometimes complain that Microsoft swoops in on projects that its  partners could credibly deliver. While there is a partner on this deal, the  partner is on the licensing side. MCS will do the deployment. 
It's not surprising that MCS is out front on this deal, and it doesn't  mean by itself that MCS is going through one of its more aggressive phases.  Over the years, Microsoft has frequently talked about the framework it uses  when deciding whether MCS should be involved in a project. This deal seems to  fit two major criteria, either one of which would be enough for Microsoft to  justify putting its own people in the deal. One is if a project is what  Microsoft calls a "lighthouse" project. This clearly is, first for  its size but also for its sensitive security and privacy requirements for law  enforcement departments and for health-related departments. 
The other criterion  is whether the customer wants "skin in the game" from Microsoft.  Given the considerable public relations problems that attended the rollout of  Google Apps in the city of Los Angeles, there is every reason for county  officials to want only Microsoft throats around if someone needs to be choked  for quicker progress.
An LSP Win for En Pointe  Technologies: The named partner in this deal is En Pointe Technologies.  Although En Pointe does systems integration work, Microsoft's news release on  the deal is clear that it's the licensing solution provider (LSP) side that will be  involved here. "Microsoft Consulting Services will begin the migration to  Office 365 in July, and Microsoft partner En Pointe Technologies will manage  the agreement," the release stated. 
Even absent systems integration work,  it's a big win for En Pointe. The company was previously managing Microsoft  Enterprise Agreements (EAs) for several L.A. County departments. Now En Pointe  manages a consolidated EA for all 15 departments. It's not clear what LSPs may  have gotten boxed out in the consolidation. 
"Our relationship and credibility  with both Los Angeles County and Microsoft is cited as the reason such a large  deal was placed in our hands," En Pointe President Michael Rapp said in a  statement. (En Pointe did not immediately respond to a series of specific  questions about the deal.)
A Blow for Google Apps: When  Google won a contract in 2009 to move 30,000 employees of the city of Los Angeles  from  on-premises e-mail to its cloud services, it was a clear shot across Microsoft's  bow (even though most of the e-mail servers involved were GroupWise). There was  another big player in the cloud space with the ability to sell major customers  on its service. That deal ran into trouble when Google was unable to comply with FBI requirements for police department e-mail that meant the L.A. Police  Department (LAPD) couldn't move to Google Apps.
To be clear, the Google deal was the city, the Microsoft deal is the  county, so we're looking at different entities. Nonetheless, Microsoft's win  relates to Google's in three ways.
First, Microsoft makes a point of noting in the first sentence of its  release that the  Office 365 for Government deal includes "roughly  20,000 law enforcement personnel." Without mentioning Google by name,  Microsoft is going out of its way to highlight its ability to comply with the  Criminal Justice Information Services (CJIS) standard that posed a problem for  Google and the LAPD.
Second, part of the Google contract involved incentives if Google and  its partner Computer Sciences Corp. (CSC) could get L.A. County departments  onto the system, as well. Microsoft's ability to wrap up a deal for all county  departments suggests that crossover never occurred.
Third, Microsoft's deal with the county is much bigger than Google's  deal with the city -- covering 100,000 employees rather than the originally  announced 30,000. The deal literally surrounds and dwarfs Google's foothold in  the city of Los Angeles.
Reasons for the Win: Most of  the reasons Microsoft won the deal involve money, with the cloud driving  expenses out of IT. En Pointe's news release says the deal will save the county  $2.5 million annually after the first year. According to Microsoft, cost  savings will come from consolidating EAs, decreased collaboration costs across  departments due to a unified platform, the ability to pay only for services  used by existing employees and the avoidance of upfront capital expenditures.  
The county's CIO Richard Sanchez also says the move to Office 365 will help the  county's employees become more mobile. Microsoft also cited the CJIS and HIPAA  compliance as factors. 
It was not clear whether Google or anyone else was  competing for the contract, and clearly Microsoft's deep presence due to the  existing 15 EAs played a role.
Crazy Q4 Office 365 Deals: Microsoft always pushes hard to close business in its fourth quarter, which  ends this month. Partners are seeing a lot of extra incentives on Office 365  right now. Some sort of extreme discounting, beyond the usual deal size  discounts, was probably a factor here. In any case, it's a good time for  partners to be closing Office 365 deals across the board.
Don't Mess It Up! This week  the L.A. County deal counts as a victory for Microsoft. One or two missteps and  it will be an embarrassment (see Google and the city of Los Angeles). You can  bet there will be Google and CSC reps eagerly waiting to pounce on any delays  or problems. There will also be officials who got into trouble over the Google  problems and politicians looking to score points keeping a close eye on  Microsoft's progress. The stakes are very high in a politically-fraught  environment. Yet another reason for Microsoft to keep this deal in house with  MCS (see above).
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	Posted by Scott Bekker on June 19, 2014