I recently did a presentation for the Microsoft OEM Partner Action Committee discussing ways to help the OEM System Builder Channel go after new opportunities found with Microsoft Online Services. Here it is:
Steve Ballmer recently said that Microsoft is “All In” when it comes to Cloud Computing. But will the channel call his bet or will they drop out of the game?
My name is Todd Swank and I’m the Vice Marketing of Nor-Tech out of Minnesota. We’re an OEM System Builder who has traditionally earned our revenues from creating hardware solutions and pre-loading them with Microsoft Operating Systems and Microsoft Applications like Office. As customer demands have shifted over the past few years to mobile solutions, we have found ourselves forced to becoming resellers for Multi-National Manufacturers like Lenovo, HP, and Toshiba. Current customer demands seem to be shifting to even more and more mobile devices. Customers are demanding that their data and applications be available to them anytime, anywhere, and from any device. They’re demanding Cloud Computing. So the question becomes, how does a company that has traditionally made its money by reselling hardware solutions make the transition into a company reselling cloud services?
Lucky for us as a Microsoft Partner, we already have a lot of great products to choose from:
i. Azure --- Development and deployment platform for cloud applications
ii. Intune --- a new solution that simplifies management and security of PCs
iii. Live Services --- free programs from Microsoft for photos, instant messaging, e mail, blogging, family safety, and more.
iv. Dynamics --- cloud customer relationship management
v. Office 2010 --- Launches in a couple weeks and will most likely be the channel’s first large scale push into selling Microsoft Online Services
vi. BPOS (Business Productivity Online Suite)
a. What's in it. (Sharepoint, Exchange, Office Live Communications, and Live Meeting)
b. This is where the majority of our focus has been so far because it appears to have the most developed Partner program.
c. Review what we've done
a. Multiple webinars.
b. Conference calls with Microsoft Online Services Reps.
c. signed up to be authorized resellers for BPOS and passed the assessment test, so I’m officially in the program.
1. How cool it is that it’s constantly being improved. Microsoft is continually adding enhanced features and functionality to improve customer experience. Seamless. Customers don’t have to do anything to enjoy these improvements.
2. Discuss partner program. ***Extremely impressed with the amount of training and resources Microsoft is already providing to partners for this relatively new program (marketing incentives, details business plans, multiple trainings, etc.)
Thanks to Microsoft for doing so much already to give the channel opportunities to start selling Cloud Services.
There’s plenty of reasons to get involved in selling Microsoft Online Services now:
• Microsoft has arguably the best channel program in the business. Microsoft Online Services are already off to a great start providing partners with a roadmap showing them how to take advantage of the program.
• Microsoft is generously offering partner commissions on Online Services sales into perpetuity as long as the Partner remains as the client’s POR (Partner of Record).
• Microsoft has great training programs and marketing incentives for Online Service partners. EG Giving Partners 250 seats of BPOS for testing and demonstration purposes.
There are already thousands of resellers signed up to sell Microsoft Online Services!
It’s a great program and a natural fit for resellers who already have solid practices selling enterprise agreements and have existing service businesses in products like Sharepoint and Exchange.
However, Microsoft’s system builder partners have traditionally earned their revenues selling their custom hardware solutions and will need a lot of guidance to create new revenue streams by offering Microsoft Online Services.
When I try to tell our salespeople ‘’that they need to start looking into selling Microsoft Online Services, I run into a lot of resistance:
1. Cloud Computing is going to put me out of business
2. You want me to sell what?
3. Show me the money!
There are challenges transitioning existing business models to the new models.
A Direct Revenues are going to be a challenge. $1.80 per user per month for the first year and $.60 per user per month is not going to provide a great Return on investment until partners sign up thousands of users.
B There doesn’t appear to be opportunities in Microsoft Online Services for Microsoft Partners who have built their business around selling to other Microsoft Partners and VARS.
C. Customer relationships seemingly will shift from the Partner directly to Microsoft in the long run since the customer will have the perception they’re buying direct from Microsoft and much of their service and support will be handed directly by Microsoft. This will create tension between Microsoft and its Partners.
Where’s there’s challenges, there’s always opportunities
A System builders can leverage their existing relationships with end customers and become their trusted advisor for Online Services.
B New revenue streams from services including data migration from the data center to the cloud, Sharepoint Consulting, and Exchange Consulting.
C 70% of Microsoft Online Services sales expected to be to new customers. Huge growth opportunity with SMB.
D Recurring Revenue Streams into perpetuity
Here’s some of the ideas we have to help the channel recognize the opportunities and be inspired to take advantage of them.
I think the most important thing we need to do is to explore opportunities to give system builders the incentive and ability to offer Microsoft Online Services at the time of the hardware sale.
Explore system builder exclusive promotions for BPOS
1. Desktop Icon on system builder PC that links end customer to free trial BPOS offer that pre-loads Partner of Record information for the system builder
2. Extended BPOS free trial offer for end customers buying PC’s from system builders
3. Customizable marketing flyer explaining BPOS free trial offer similar to what was done for Office 2007 and explanation how to name system builder as partner of record.
So Steve Ballmer says Microsoft is All In on Cloud Computing?
Well, the cards have been dealt, the pot is full of big money, and the players are watching each other and getting ready to make their move.
I’m excited for us to lay our cards on the table and see how we’re going to do.