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RCPmag.com ✱ May 2010
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Google. Will It Disrupt the Microsoft Channel?
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RCPmag.com MAY 2010 Redmond Channel Partner 3
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FEATURES
18 Google. Will the Search Giant Disrupt the Microsoft Channel?What started with the search market has now moved to cloud services. Google Apps makes a play against the Microsoft Business Productivity Online Suite and the partners off ering hosted services.
25 Productivity PlayWhen Microsoft Offi ce 2010 ships this month, the suite faces its most serious challenge yet from lower-cost alternatives. Here are nine reasons why Redmond’s newest version still promises to be a boon to partners.
32 Shaking up SubscriptionsAs part of the Microsoft Partner Network overhaul, Microsoft is revamping the popular Action Pack program this month.
Inside18
M A Y 2 0 1 0 ✱ V O L U M E 5 ✱ N U M B E R 5
10
I N E V E R Y I S S U E 4 RCPmag.com 8 Channel Watch 39 RCP Index>
DEPARTMENTS
9 Channel ReportFINANCE: VC Funding Remains Tight ............................9ROADMAP: Multi-Purpose DB Tool on Tap .................... 10PEER REVIEW: DCS Netlink ......................................... 12RCP ON THE MPN: 11 Things to Know About … WPC 2010 ................................................................... 14QUOTABLE: On Ending Itanium Support ....................... 14TABLETS: HP Quietly Touts iPad Rival .......................... 15ECOSYSTEM: Citrix Ports Apps to Apple iPad ................ 15SECURITY: Internet Espionage a Great Equalizer .......... 16GOLD CLUB: Meet the companies that have recently reached Microsoft’s top partner level .......................... 16
COLUMNSON GROWTH: Mike HarvathGet on the AMS Bandwagon ........................................ 37CHANNEL CALL: Keith Lubner With Vendors, Fertilize, Water and Weed ................... 38DIRECTIONS: Paul DeGroot Competing and Cannibalizing ................................... 40
SPECIAL PULLOUT SECTION
PARTNER’S GUIDE TO MICROSOFT SYSTEM CENTERWith two new releases for midmarket companies—System Center Essentials 2010 and Data Protection Manager 2010—Microsoft is making more of a channel push than in the past.
Redmond Channel Partner MAY 2010 RCPmag.com4
EDITORIAL STAFF
Vice President, Editorial Director Doug Barney
Editor in Chief Scott Bekker
Executive Editor Jeff rey Schwartz
Managing Editor Wendy Gonchar
Associate Managing Editor Katrina Carrasco
Associate Managing Editor Marti Longworth
ART STAFF
Creative Director Scott Shultz
Senior Graphic Designer Joshua Gould
ONLINE/DIGITAL MEDIA
Web Editor & Executive Editor, New Media Michael Domingo
Editor, RCP Update Lee Pender Director, Online Media Becky Nagel Online News Editor Kurt Mackie
Associate Web Editor Chris Paoli
Site Administrator Shane Lee
Designer Rodrigo Muñoz
President Henry Allain
Vice President, Publishing Matt Morollo
Director, Marketing Michele Imgrund
Online Marketing Director Tracy Cook
President & Neal Vitale
Chief Executive Offi cer Senior Vice President & Richard Vitale Chief Financial Offi cer Executive Vice President Michael J. Valenti
Senior Vice President, Abraham M. Langer Audience Development & Digital Media
Vice President, Christopher M. Coates Finance & Administration
Vice President, Erik A. Lindgren Information Technology & Application Development
Vice President, Carmel McDonagh Attendee Marketing
Vice President, Event Operations David F. Myers
Chairman of the Board Jeff rey S. Klein
Reaching the Staff Staff may be reached via e-mail, telephone, fax or mail.
A list of editors and contact information is also available online at
RCPmag.com.
E-mail: To e-mail any member of the staff , please use the
following form: [email protected]
Framingham Offi ce (weekdays, 9:00 a.m. – 5:00 p.m. ET)
Telephone 508-875-6644; Fax 508-875-6633
600 Worcester Road, Suite 204, Framingham, MA 01702
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Telephone 818-814-5200; Fax 818-734-1522
9201 Oakdale Avenue, Suite 101, Chatsworth, CA 91311
Redmond Channel PartnerThe opinions expressed within the articles and other contents
herein do not necessarily express those of the publisher.
RedmondChannelPartnerRCPmag.com
May 2010 + Volume 5 + Number 5
@RCPmag.comEXCLUSIVELY ONLINE BLOGS
BY THE NUMBERS
EASY FINDITWhat we once called FindIT codes are now easy URLs. You’ll see these embedded throughout Redmond Channel Partner so you can access the additional information quickly, without having to navigate through all the content on the site . (Note that all URLs do not have any spaces, and they are not case-sensitive.)
RCPUStay tuned to channelnews with the RedmondChannel Partner Updatee-mail newsletter, writtenby Lee Pender.
OnLine
ON WINDOWS 7 CATCHING VISTA IN MARKET SHAREIf consumers are making the switch, then enterprises will eventually change over as folks get used to using Windows 7 as their default OS. Pretty much every metric at this juncture points to Windows 7 as being the next XP ... The only metric that doesn’t point in that direction is feedback we get from readers and enterprise users. But we suspect that a larger number of partners and IT folks would be more bullish about Windows 7 if Microsoft would just put the Vista fantasy aside and let folks upgrade easily from XP. Maybe if we keep saying this, somebody in Redmond will pay attention. RCPmag.com/PenderA0510
ON MICROSOFT OFFICETALKIs Offi ceTalk really necessary? Partners, will it help you snatch customers away from Lotus Notes if and when it becomes part of, say, SharePoint? If so, great. Really, if it’s a sales booster for the channel, we’re all for it. But it sure seems like a built-in offi ce time-waster ... and just another management hassle for IT. How many ways do we really need to get a hold of each other? RCPmag.com/PenderB0410
JULIE BENNANI ON THE MPNGo online for excerpts of Redmond Channel Partner Editor in Chief Scott Bekker’s interview with Microsoft Partner Network General Manager Julie Bennani. They discussed the Microsoft relationship with the International Association of Microsoft Certifi ed Partners, news about the Microsoft Small Business Specialist Community and new details on the diff erences in benefi ts between Competencies and Advanced Competencies.Read more here: RCPmag.com/Bekker0510
TOP 7 WINDOWS PHONE 7 HIGHLIGHTS FROM MIX10At its Web development and design conference in March Microsoft revealed more details about the company’s new mobile platform. Executive Editor Jeff rey Schwartz reports on seven key areas: RCPmag.com/Schwartz0510.
TECH LIBRARYBe sure to check out the free, downloadable Partner Guides and white papers from the RCP Tech Library. Find out all you need to know about backup and recovery, consolidating SQL Server, Dynamics and more: RCPmag.com/TechLibrary.
What’s
SOURCE: ISACA 2010 IT RISK/REWARD BAROMETER
CLOUD COMPUTING HAS A SECURITY PERCEPTION PROBLEMThe Information Security Audit and Control Association (ISACA) recently surveyed 1,800 IT professionals about the benefi ts of cloud computing versus associated security risks. risks > benefi tsbenefi ts = risks
benefi ts > risks
45%
17%
38%
In a lot of cases, an affordable business machine compromises on features. The Lenovo ThinkPad® Edge 14" notebook doesn’t. Outside it’s all style, but inside it’s all ThinkPad—strong, reliable and secure with features like wireless connectivity options, Active Protection System™ and spill-resistant keyboard. Now, it’s available in an optional color and a contemporary design. It’s the kind of notebook your customers are looking for. And so should you.
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Availability: All offers subject to availability. Lenovo reserves the right to alter product offerings and specifications at any time, without notice. Lenovo is not responsible for photographic or typographic errors. Pricing: Prices do not include tax, shipping and handling or any recycling fees and are subject to change without notice. Your specific contract discount prices may vary and cannot be combined with prices shown. For question on your current pricing, contact your sales rep. Reseller prices may vary. Warranty: For a copy of applicable warranties, write to: Warranty Information, P.O. Box 12195, RTP, NC 27709, Attn. Dept: ZPYA. Lenovo makes no representation or warranty regarding third-party products or services. Visual is representative. Products featured in this advertisement may offer only a part of the stated savings. Footnotes: (1) Mobile processors: Power management reduces processor speed when in battery mode. (2) Included software: May differ from its retail version (if available) and may not include user manuals or all program functionality. License agreements may apply. (3) Memory: For PCs without a video card, memory supports both system and video. Accessible system memory is up to 224MB less than the amount stated, depending on video mode. (4) Hard disk drive: GB=billion bytes. Accessible capacity is less; up to 5.2GB is service partition. Visual is representative. Products featured in this advertisement may offer only a part of the stated savings. Trademarks: The following are trademarks or registered trademarks of Lenovo: Lenovo, the Lenovo logo, Active Protection System and ThinkPad. Intel, the Intel logo, Intel Core, Core Inside, Celeron and Celeron Inside are trademarks of Intel Corporation in the U.S. and other countries. Microsoft, Windows and Life without Walls are registered trademarks of Microsoft Corporation. Other company, product and service names may be trademarks or service marks of others. ©2010 Lenovo. All rights reserved. MMG_US_Q4_10_14042_8"x10.75"
ThinkPad Edge 14" (P/N 05787ZU)Intel® Celeron® processor P45001
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MIDNIGHT BLACK HEATWAVE RED
THERE’S MORE THINKING IN A
Windows®. Life without Walls™. Lenovo® recommends Windows 7.
SYP Group’s low-cost, high-value philosophy is helping the young company build relationships, meet customer needs and grow quickly despite the downturn. By Jabulani Leff all
Picking the Right Partner Pays Off
t was January 2, 2009—the second day of the year and the fi rst day of business for SYP Group.
Like many other entrepreneurs, Mukesh Swaroop and Keyur Patel, co-founders of the IT services
company, had stepped out of corporate jobs into the sink-or-swim world of small-business management. In their cases, though, the decision to take that leap came during the toughest of economic times.
Previously, both had worked as IT managers for midsize construction companies. As both those businesses began slashing their IT budgets in response to the recession, the two
realized their jobs were likely to be cut as well. So they joined forces to launch their own IT services company targeting small and midsize businesses (SMBs).
“We hit the ground pretty fast,” Swaroop calls. A year-plus later, they’re still running hard, growing their own company by providing services to other SMBs. SYP serves small businesses in many vertical markets, with the common denominator being that most customers have fewer than 100 endpoint workstations. The company’s top priority is helping customers better manage their IT resources—which, in turn, allows them to focus on building and strengthening their businesses.
COMPANY
SYP Group❱ Neel Vaidya, Mukesh Swaroop and Keyur Patel, co-founders
SERVICES OFFERED
IT management, project management, help-desk support, training and education, Web site design and development, preventive maintenance.
www.sypgroup.com
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0510rcp_Zenith_SypGroup_final.indd 16 4/12/10 9:06 AM
From their past experience, the SYP Group’s co-founders “knew that small businesses often don’t have the in-house expertise that they need to make their critical IT decisions,” Swaroop says. He notes that those decisions can be critical fi nancially as well: “Making the right choices can help companies save literally thousands of dollars a month.”
Swaroop and Patel say that once customers fi nd someone they can trust in one area of IT services, they tend to return for advice on all their IT needs. For that reason, SYP group has focused on building strong, comprehensive customer relationships. “We can provide them with a full range of IT services, from overall IT management to project management to graphic design to Web site design and development—or all of these,” Swaroop says.
Another factor enhancing customer confi dence: SYP’s collaborations with technology partners whose products and services are sold through to clients. Among those partners is Rackspace Hosting, which provides an e-mail hosting service. SYP also off ers Web site hosting through GoDaddy.com’s reseller program. Complementing those off erings is SYP’s in Microsoft’s WebsiteSpark program, which off ers support and software to professional Web designers and developers.
But SYP’s biggest technology partner by far is Zenith Infotech Ltd., a provider of managed services, business-
continuity and help-desk solutions. Swaroop and Patel fi rst learned
about Zenith while attending an industry event sponsored by Kaseya, a Swiss-based provider of IT services and tools. At that session, they meet a peer who raved about Zenith, calling its services more cost-eff ective and easier to use than Kaseya’s. After doing more research, they concluded that Zenith, a global company with U.S. headquar-ters in Pittsburgh, looked like a good fi t for SYP.
”When we started SYP Group, our initial focus was getting our managed-services off ering started,” Swaroop explains. In their previous jobs, the co-founders had used tools for automating application deployment, patch management, antivirus updates, monitoring and other aspects of IT operations. Both realized that a similar emphasis on automation was a key to maximizing the number of clients and endpoints that SYP could eff ectively manage.
“As a new business operating in the greatest economic downturn since the Great Depression, cost was a huge factor and had to be balanced against product features,” Swaroop explains.
“After hearing about Zenith and exploring its off erings, we found that they were very reasonably priced. We also learned that that we didn’t have to sacrifi ce the features we wanted.”
Those critical factors included a powerful scripting engine, automated monitoring and remote access, among
others. Additionally, the SYP executives were impressed by Zenith’s Network Operations Center (NOC) and managed-service off erings. Having the ability to have the NOC monitor client desktops and servers and intervene to fi x server issues was particularly attractive, Swaroop says.
Using Zenith’s off erings has helped SYP build a low-cost, high-value philosophy into its marketing and customer-service eff orts. That approach dovetails nicely with the understanding that in today’s uncertain economic environment, most companies are seeking ways to cut their IT costs.
“At the same time, we understand that clients still need access to high-quality IT services and advice,” Swaroop says. “Providing managed services off ers a great way to fi ll that need.”
Swaroop also notes that off ering a managed-service platform requires that managed-service partners market themselves on what they off er, rather than selling themselves strictly on the bottom line.
“Anyone can compete based on costs or pricing,” Swaroop notes. The truly exceptional companies will distinguish themselves on their services and benefi ts.” For this young, fast-growing company, Zenith clearly excels on all those counts.
“Anyone can compete based on costs or pricing. The truly exceptional companies will distinguish themselves on their services and benefi ts.”
—Mukesh Swaroop, co-founder, SYP Group
Sponsored by
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0510rcp_Zenith_SypGroup_final.indd 17 4/12/10 9:06 AM
Redmond Channel Partner MAY 2010 RCPmag.com8
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A recent report by market researcher IDC found that the recession’s eff ect on SMBs was nastier than anticipated.
“Moving forward, small businesses will not follow the past pattern and return to pre-recession spending levels more quickly than midsize fi rms. Instead, SMBs of all sizes will remain cautious with their IT spending over the next several years,” warned Ray Boggs, IDC’s vice president for Small/Medium Business and Home Offi ce, in a statement accompanying the report.
IDC now predicts compound annual growth in worldwide SMB spending will be 5.5 percent during the 2010-2014 forecast period—considerably lower than previous forecasts. In a refrain that’s been common among many sectors, IDC noted that spending on SMB technology won’t reach 2008 levels until 2011. Worldwide SMB IT spending is expected to hit about $630 billion in 2014, according to the latest forecast.
I asked Boggs why SMBs aren’t leading us out of this recession the way they dragged us out of previous ones. His customer, channel and vendor surveys and interviews turned up a few sadly interesting factors.
One involves the lead-up to the recession. “A lot of thereserves that smaller fi rms draw on in hard times had already been depleted. In 2007 and 2006, costs for transportation and raw materials like metal and wood were growing. Customers said, ‘I’m getting murdered,’ and they drew down their reserves,” Boggs explained.
Another mitigating factor that leads to early SMB recovery under more normal circumstances is small business starts.
No Quick Bounceback in SMB Spending
Employees get laid off , turn around and try to launch their dream companies.
“That didn’t happen either,” Boggs said. “Typically you would mortgage your house, draw on home equity or turn to your rich Uncle Harry. Uncle Harry wasn’t feeling very rich.”
One other thing Boggs and the IDC team turned up in their surveys – the SMB customers they talked to aren’t very keen on cloud services. Boggs assumed SMBs would like the absence of up-front costs and the low monthly price of cloud off erings. He found that “they weren’t so excited about it.”
Still, some growth is called for, and IDC expects the strongest pickup to come from spending on PCs and peripherals, followed closely by packaged software outlays.
So the takeaway, if you’re a Microsoft Small Business Specialist, is that in the short run, it may be better to be conversant with the benefi ts of Windows 7 and Offi ce 2010 than the selling points of the Microsoft Business Productivity Online Suite.
Are you seeing signs of life in the SMB market? Send me an e-mail and let me know at [email protected]. •
f you’re fi nding that technology sales out there in small to midsize business (SMB) land are tough to come by, you’re not alone. It turns out that, once again, one of the rules we thought we knew about recessions is being rewritten in this loitering monster of a downturn.I
BY SCOTT BEKKER
ChannelWatch
RCPmag.com MAY 2010 Redmond Channel Partner 1
PARTNER’S GUIDE TO MICROSOFT SYSTEM CENTER
With two new releases for midmarket companies—System Center Essentials 2010 and Data Protection Manager 2010—Microsoft is making more of a channel push than in the past. By Scott Bekker
SPECIAL PULLOUT SECTION
Redmond Channel Partner MAY 2010 RCPmag.com2
R C P F E AT U R E | S Y S T E M C E N T E R
Essentials is a branding term Microsoft tends to use for midmarket-focused products. They are designed to meet the standard requirements of 50 to 500 PC shops with limited IT staff , and the products come with slightly less functionality than related enterprise products. The Essentials moniker is common to the System Center suite of management products and the security product line. It also made a brief appearance in the Windows Server family with the short-lived Windows Essential Business Server, which was a midmarket-focused bundle of serv-ers that Microsoft discontinued recently.
On the System Center side, the product family includes four main products for enterprise customers: System Center Operations Manager, System Center Configuration Manager, System Center Virtual Machine Manager and System Center Service Manager. System Center Essentials combines functionality from all those products and is designed for the midmarket (another SKU called System Center Essentials Plus reaches the low end of the enterprise space). System Center Data Protection Manager covers both enterprise and midmarket needs.
Both System Center Essentials 2010 and System Center Data Protection Manager 2010 went into beta in September 2009. They hit the release candidate stage in January 2010, and entered RTM in April. General availability should follow soon.
The customers Microsoft had in mind when designing System Center Essentials fit a general profi le. First, they don’t have a comprehensive and integrated IT management solution. The range of systems for the product set is generally between 25 and 400 PCs and between fi ve and 50 servers. The IT department consists of one to five employees, and these are generalists, as opposed to workload specialists. While there’s support in System Center Essentials for some other platforms, the product is designed primarily for Microsoft IT shops. Ideal customers for the suite also use the Active Directory service and Exchange for messaging. They may also use SharePoint for collaboration and SQL Server for line-of-business applications.
“For the most part, you get around 70 percent to 80 percent of the enterprise product, except for those features that really didn’t make sense for midsize IT,” said Jason Buffington, a Microsoft senior technical product manager, during a webcast with Redmond Channel Partner magazine in mid-April.
SYSTEM CENTER ESSENTIALS 2010The System Center Essentials (SCE) single-console design is meant to allow IT administrators to discover devices in their networks, manage virtualization, monitor their systems, manage updates and deploy software. To help with all those tasks, the product includes predefi ned reports, which cover standard-ized management information, and management packs, which are preloaded and help monitor and manage common operating system components, services and applications.
Discovery allows administrators to determine what computers and groups of computers are on the network, as well as view other devices. Once systems are discovered, administrators can run tasks on those computers, and also create inventories of the hardware and software on the network. An important 2010 improvement to the discovery process allows automated discovery to cover only specifi c and relevant parts of the network. Users had said they were unable to use the automated discovery feature in the past because
In late April Microsoft released to manufactur-ing two new products in its System Center suite, System Center Essentials 2010 and Data Protection Manager 2010. With the RTMs, Microsoft is making a major eff ort to reach
partners ahead of the products’ general availability. That’s a marketing move that has been missing from past releases of the products and from most products in the System Center family.
“There are still a lot of partners who are not aware that Essentials is out there,” says David Mills, senior product manager, Microsoft. “There’s a lot of noise in [the management] space.” Mills says that because of the number of Microsoft partners and the potential midmar-ket customers, the opportunity for partners to help those customers manage their networks is relatively huge.
RCPmag.com MAY 2010 Redmond Channel Partner 3
it created too much noisy alert activity, such as false reports that licensing limits were being exceeded. Aside from adding no value, the problem ran counter to the stated goals of SCE (pronounced “ski”), which was to make administrators’ lives easier.
A major investment in the 2010 version refl ects the industry movement toward virtu-alization. SCE 2010 allows administrators to designate virtual hosts from the consoles and create virtual machines and workloads on those hosts. Capabilities include confi guring virtual machines, migrating virtual machines to new host servers, deleting virtual machines and removing a host server.
In the webcast, Buffi ngton listed the virtu-alization enhancements as among the most hotly anticipated elements of the release, and a fl ash poll of partner participants in the webcast rated the virtualization features as the most interesting.
Buffington said choosing which third-party virtualization technologies to support in the Essentials 2010 release fit into the usual feature dance among Essentials and its enterprise-focused sibling products.
“On almost every part of Essentials, if you compare it with the big brother from our enterprise portfolio, there are a few features that we’ve chosen to withhold either to provide additional value to the enterprise product or places where it didn’t make sense for a midsize IT environment,” Buffington said. “We really focused this product squarely on midsize IT. When we looked at what IT was doing with virtualization, we were not seeing that legacy approach, [or a] broader penetration of virtualization.
“You see a few early adopters using something like VMware, so we’ve made sure there was a migration utility available for that [in Essentials], as opposed to the full-fledged Virtual Machine Manager product, which assumes that you might have a long-installed
base of the software, and which will help you manage the software. [In Essentials] we will just simply help you migrate off of [VMware],” he said.
“As far as the other platforms out there for virtual-ization, you saw even less of those in midsize IT than we did of VMware,” Buffi ngton said. For that reason, Microsoft chose not to support Citrix XenServer in SCE 2010, he said.PH
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“We can help them with the installation and the confi guration and get [customers] all ready because we have the experience of doing it in multiple environments, and we can tailor it to their environments.” Dave Sobel, CEO, Evolve Technologies
with the most recent updates from Microsoft and third-party application providers, plus hardware updates and security patches. Often, it can be difficult for them to tell whether all of their machines have the latest updates.
• Keeping Track of Assets. Another area where midsize customers have expressed frustration is in accurately tracking what IT assets they have. Often, customers are manually tracking hardware and software inventory in spreadsheets that may not be up-to-date. This is critical information for inventory reporting and planning purposes. With virtual servers becoming prevalent, it’s even more critical to have an automated and integrated way to track physical and virtual assets. You can help them find a more unified, proactive and efficient way of keeping track of hardware and software inventory.
Microsoft has specifically created a solution designed for midsize IT businesses to more proactively and efficiently manage their infrastructure in a unified way.
Q How do Microsoft management and virtualization solutions help your customers better manage their IT infrastructure?A With the introduction of Microsoft System Center Essentials 2010 and Microsoft System Center Data Protection Manager 2010, Microsoft can now deliver the integrated IT management solution our midsize business customers need to address their challenges.• Keep IT Infrastructure Up and Running.
Microsoft solutions provide our customers with a unified view of physical and virtual servers, PCs, laptops, hardware, software and services running in their company’s IT environments. With built-in configuration intelligence, monitoring alerts, and expert knowledge to quickly troubleshoot and fix issues before they become big problems, System Center Essentials enables IT administrators to move from a reactive to a proactive mode when managing infrastructure.
• Lower Costs Through Virtualization. The Microsoft management solution for midsize businesses utilizes the Windows Server® Hyper-V™ virtualization platform to enable quick and easy consolidation of physical server workloads by making it easy to create and manage multiple
Q What does Microsoft consider to be a midsize business?A Microsoft defines a “midsize” business as one that typically has 50 to 500 PCs/laptops, and anywhere from 5 to 50 servers. The reason for this is that it’s where we find IT departments of 1 to 5 IT professionals who do a little bit of everything. These IT professionals have to effectively deal with the same challenges as larger IT departments, but they don’t have the luxury of specializing. They function more as “generalists” who have to be able to manage the entire IT infrastructure of the company.
Q What are some of the challenges midsize businesses face in IT management?A Each of our customers is different. However, based on Microsoft’s numerous customer engagements with midsize businesses, we have identified some of the most common issues that these customers struggle with to effectively manage their IT environments. Typically, these IT challenges fall into four main categories:• Keeping the IT Infrastructure Up and Running. Typically, IT
generalists rely on several different “point” solutions that perform tasks such as monitoring critical servers for up/down status, which often forces them into a reactive mode in dealing with server management. The time and cost required to provision a new physical server is typically weeks, making it difficult for customers to bring new servers online. They also need to ensure critical business data is highly protected and can be quickly restored when necessary.
• Improving End-User Productivity. Some IT generalists working in midsize businesses spend a great deal of their time and effort helping company employees to quickly either remotely or locally troubleshoot PC or laptop issues for employees working locally or in branch offices. They also are randomly called upon to deploy the latest business applications and updates, or investigate database issues with custom line-of-business applications. These issues can cause lost productivity for the company, especially when the employee is not local.
• Keeping up with Security Patches and Updates. A frequent chore for midsize customers is keeping servers, PCs and laptops up-to-date
Opportunity Knocks: Selling Management and Virtualization to Midsize BusinessesZane AdamGeneral Manager, Virtualization, Microsoft Corp.
Microsoft can now deliver the integrated IT management solution our midsize business customers need to address their challenges.
REDMOND CHANNEL PARTNER PROFILE
RCPP
0510rcp_Microsoft.RCPP.final.indd 2 4/12/10 11:46 AM
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virtual servers on a single physical machine. These customers can reduce costs by consolidating resources through virtualization and unified management, which means they only need a single set of tools to manage both physical and virtual resources.
• Consolidate Servers with Virtualization. Pointing our customers to server consolidation through virtualization is a great opportunity to help them cut costs. System Center not only provides our customers with the server consolidation tools they need, but also enables businesses to more dynamically manage their resources. For example, pooling applications and servers simplifies and speeds an organization’s ability to respond to new requirements and other important changes. Using Microsoft System Center Essentials 2010—which now includes Virtual Machine Manager 2008 R2 technology—and Windows Server Hyper-V, customers can quickly and easily provision new virtual servers and consolidate multiple server workloads onto a single physical machine. Also, customers can take advantage of live migration and backup and restore protection offered by Data Protection Manager 2010 to help improve performance and availability.
• Improve End-User Productivity. System Center Essentials enables customers to quickly troubleshoot PC and laptop issues. Alerts identify performance problems via e-mail, pager or SMS text messages, giving customers the ability and agility to quickly troubleshoot and fix PC and laptop issues before they become big problems. If someone needs an application installed on their PC or laptop, a simple wizard quickly walks them through the process of software deployment to PCs, laptops or servers in the user’s network. Even something like the Microsoft Office suite of products can be quickly deployed to an entire company. With System Center Essentials, customers can deploy Microsoft and non-Microsoft applications, drivers, and accurately target software installations.
• Keep Systems Up-to-Date. Using Essentials allows your customers to easily control download, configuration and deployment of Microsoft and third-party software and hardware updates from the unified management console. It’s also very easy to quickly check update status and know whether the entire IT department environment is up-to-date and highly secure. In addition, with integrated capabilities, customers can scale their automated deployment and patching across the entire IT
Help your customers better manage their physical and virtualized environments.
environment, using the same tools for both physical and virtual environments.
• Deliver IT Business Continuity. Our customers can help their customers deliver business continuity to their organizations by helping ensure that data and services remain highly protected and available. For example, Data Protection Manager enables rapid data and server/client recovery, as well as efficient and reliable failover capabilities. This solution can also extend backup and recovery beyond the customer’s local environment and into the cloud. And, through capabilities like live migration of hosts, this solution provides the ability to dynamically respond to change.
I encourage customers to review the following resources and discover how they can help their midsize and small business customers better manage their physical and virtual environments.
Resources• Microsoft System Center Essentials Web site:
microsoft.com/sce• Microsoft System Center Data Protection
Manager Web site: microsoft/dpm• Microsoft System Center Partner Web site:
https://partner.microsoft.com/global/products solutions/servers/systemcenter
• Microsoft Integrated Virtualization Web site:microsoft.com/virtualization
• Microsoft Midsize Business Portal:microsoft.com/midsizebusiness/products/microsoft-windows-server.aspx
• Microsoft Core Infrastructure Web site:microsoft.com/infrastructure/solutions/virtualization.mspx
• Microsoft Virtualization Partner Portal:https://partner.microsoft.com/US/products solutions/productsvirtualization
Current Pricing and Licensing:• Data Protection Manager 2010 microsoft.com/systemcenter/dataprotection
manager/en/us/pricing-licensing.aspx• System Center Essentials 2010 microsoft.com/Systemcenter/essentials/en/us/
pricing-licensing.aspx
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Once systems are discovered and virtualized, SCE provides numerous monitoring functions, which repre-sent the heart of the day-to-day value of the product. Administrators can view alerts, create state views, set up diagram views of the network, manage monitoring data, put systems into maintenance mode when necessary and change Group Policy settings.
Another core set of ongoing management functional-ity in SCE is the ability to deploy software packages and update software. The record Microsoft Patch Tuesday event in April, along with the out-of-band update in March, triggered IT fire drills all over the world as administrators rushed to protect systems against nearly three dozen newly fi xed vulnerabilities.
With SCE in place, administrators can confi gure the synchronization frequency with Microsoft Update or automatically select and apply updates. The combination also allows for manual synchronization—but through the single-console of SCE—and the ability to approve or decline updates. Should a patch cause a problem, admin-istrators can also uninstall them from the SCE console. Of no small value when the boss reads headlines about a Microsoft Patch Tuesday is the ability to present him or her with a SCE status report on the rollout of Microsoft Critical and Security Updates.
While upgrading System Center Essentials for the 2010 release, Microsoft also worked to give the UI a look-and-feel that is similar to the ubiquitous and familiar Microsoft Outlook.
“One of the big things that was important to Microsoft is, if we’re going to help IT admins do something better than what they’re doing today, let’s not force them to do a lot of new things,” Buffi ngton said.
SYSTEM CENTER DATA PROTECTION MANAGER 2010While System Center Data Protection Manager (DPM) 2010 includes the enterprise in its target market, the product’s tight focus on backup and recovery of Windows servers, clients and other Microsoft servers makes it a better fi t for the midmar-ket, where Microsoft IT shops are far more common.
That said, the product has evolved a much more robust feature set from its original 2006 release. That version included disk-based replication of files, end-user restore capabilities without requiring help desk assistance, and centralized backup of branch offices. Microsoft rapidly upgraded the product with another release in the 2007 wave of System Center products. The second version added tape protection to the disk-based capabilities from 2006. It also added support for Windows application servers and clusters, among other things. Microsoft continued its support for different backup media in the 2010 release, by adding cloud backup and disaster recovery options to the previous disk and tape support. Other new features include more advanced Microsoft workloads that are more consistent with enterprise requirements, Windows client protec-tion and better scalability
On the client side, DPM 2010 supports Windows XP, Windows Vista and Windows 7, and Microsoft supports the backup of up to 1,000 clients per DPM server. That scale is allowed by an approach that backs up user data only, rather than backing up the whole machine, such as OSes and common applications. The server also integrates with local shadow copies for Windows Vista and Windows 7. A selling point is that no end-user inter-vention is required by default—allowing administrators to be ready for the inevitable calls from users that they need that local data they never attempted to back up.
Microsoft servers and technologies that DPM can back up in intervals as short as every 15 minutes include Exchange Server, SQL Server, the SharePoint family, Active Directory system state, Dynamics, Virtual Server, Hyper-V Server, Windows Server Hyper-V and Windows Server fi le services. DPM is capable of maintaining up to 512 online snapshots for disk-based recovery and can back up to tape or the cloud. For disaster recovery, the system is designed for a direct one-click recovery from off -site and the servers can be chained for additional redundancy.
THE PARTNER OPPORTUNITYMicrosoft is making more of an eff ort than usual to encourage partners to take the new System Center products to the market. For example, the company held a Partner Readiness Week for System Center Essentials 2010 in late February. During that week,
“For the most part, you get around 70 percent to 80 percent of the enterprise product, except for those features that really didn’t make sense for midsize IT.” Jason Buffi ngton, Senior Technical Product Manager, Microsoft
RCPmag.com MAY 2010 Redmond Channel Partner 7
Microsoft off ered fi ve online training courses about SCE 2010 and DPM 2010.
Dave Sobel, CEO of Evolve Technologies, which is based in the Washington, D.C., area, is already talking to customers about the products and sees a lot of opportuni-ties for his Certifi ed Partner fi rm.
“We can help them with the installation and the confi guration and get [customers] all ready because we have the experience of doing it in multiple environ-ments, and we can tailor it to their environments,” Sobel said during the RCP webcast. “Then we leave them with the tools and help them when they need the partner for escalation on the parts they want assistance with or for the new project work as an add-on.”
So far, Sobel said customers have been interested in having the management pieces that SCE 2010 and DPM 2010 provide, particularly the simplifi ed management of the environment when they want to enable their people to do a little bit more.
“What you can do is you can give an organization that has those IT generalists on-site that are doing that work, you can give them the tools to effectively manage and maintain their own environment,” Sobel said. “They get that single dashboard, and they can really work with their environment. [They use] auto discover and really take control of their environment. With the 2010 release, you get both the physical and the virtual pieces.”
“As more and more midmarket organiza-tions are virtualizing, this is a great way for them to keep a handle on correct management of all of those moving parts. What we’ve been finding is that this is a great, simplifi ed platform to let our customers dig in deep and manage their environment,” Sobel said.
Customers are in two camps, Sobel said. Some already have management technology that SCE 2010—espe-cially—could replace or consolidate. Others know they have problems, but they’re not sure how to solve them.
“In general, most organizations have some kind of management technology. But often that can be a lot of management process where they run around and do inventory or they’ve got these four or fi ve little tools that aren’t really a unifi ed piece. Or they have some Tivoli and older management tools or they have some of the tools that come from the hardware vendors,” Sobel said.
“They’re really looking for one that’s more robust. I think it’s a little bit more greenfi eld than it is displacement. But you do fi nd that there are these homegrown mismatches of pieces that are doing the management already.”
When he engages with one of those greenfield customers, Sobel said, very few of them are happy with their situations and most are open to a new way of handling IT.
“I really never talk to a small IT shop where they tell me they have so much time and everything is work-ing great. Generally those kinds of departments are stressed. They’ve got a lot of demands put on them, they’re working with limited resources and they really are trying to do more with what they’ve got,” Sobel said. “When you can give them a tool that simplifi es the management, it becomes really easy for them to look and say, ‘Yeah, that’s a great investment for us.’
“I really don’t fi nd a lot of organizations out there that are saying, ‘It’s all just really easy and well put together. We have everything that we need to run this environ-ment.’ Often times they really are pushed a lot and they’re trying to do more.”
NOT FOR MANAGED SERVICES PROVIDERSThe most apparent partner opportunities involve pointing customers to SCE 2010 and DPM 2010, helping them configure and use the tools, and developing project work later. One area Microsoft
previously dabbled in with SCE was using the platform to run the technical side of a managed services provider (MSP) business. But Microsoft has backed off that emphasis with the 2010 release.
During the webcast, a partner asked Buffington if there was a consolidated console planned for SCE so that it could be used as an MSP solution.
“That is not currently in the plan,” Buffi ngton replied, although he added that Microsoft would consider it again if enough partners asked for the capability. “For channel partners that have been looking at Essentials for awhile, we did have technology that was similar to that for Essentials 2007, which we called Remote Operations Manager. That’s not currently in the [2010] plan. Again, IT is one of those things where you have to focus on what the customer segment needs right now. We’re just not seeing as much of that.”
Microsoft briefl y touted Remote Operations Manager 2007 as a platform for managing agents in client sites. The product supported up to 2,000 agents on a manage-ment server and up to 530 agents through a gateway server. The company made some presentations at the Microsoft Management Summit in 2008 and at Microsoft Tech·Ed 2008, and briefly had a homep-
The System Center Essentials single-console design is meant to allow IT administrators to discover devices in their networks, manage virtualization, monitor their systems,manage updates and deploy software.
Redmond Channel Partner MAY 2010 RCPmag.com8
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age for the product on the Microsoft Partner Portal. However, the offi cial Remote Operations Manager blog hasn’t been updated since May 2008, and the Partner Portal page is gone.
For his part, Sobel discouraged other partners on the webinar from approaching SCE 2010 as any type of MSP platform.
“The intention of System Center Essentials is to be an on-premises solution, managing the environment, and local to the environment itself. You’re selling it on-premises to the customer,” Sobel said. “If you’re an IT provider and you’re reaching into the environment, and logging in and using the product in that way, that certainly is one facet of it. But from a use standpoint, the product is intended to be used on-premises by the people on-site with the environment.”
A CUSTOMER’S VIEWWhile many opportunities are in the greenfield side, customers who already have System Center Essentials 2007 may be ripe for an upgrade, as well.
SCE has been a key part of the management infra-structure at Tulsa, Okla.-based Explorer Pipeline since before the 2007 version came out, and the company is looking forward to several features in the 2010 release, according to Tim Vander Kooi.
The systems administrator at the fuel transportation company is also a Microsoft Most Valuable Professional (MVP) on SCE 2007, and Vander Kooi said during the webcast that the centralization of SCE is key.
“The great thing is that it’s all those things all in one place. It just allows us to be so much more proac-tive. We used to know when somebody’s hard drive crashed because they called us and said ‘Our hard drive crashed.’ With SCE, now we’re able to see those things happen and be proactive before we have issues,” Vander Kooi said.
“When you have people’s hard drives about to be fi lled up, you see it in the SCE console. If a software update doesn’t get installed correctly, we can contact our end users and help them with the problem before they even know about it,” he said.
Return on investment might be a good selling point, too, judging by Vander Kooi’s experience. Explorer Pipeline is a distributed company with offi ces through-out the Midwest and Southwest. “We used to have to pay FedEx to ship [computers with problems]. The greatest part is that you can see all the things in one place and act on it very quickly.”
One little-heralded feature that Explorer Pipeline’s IT team fi nds extremely useful is SCE 2010’s built-in knowledge base, with its option for companies to add their own specialized notes. “Anytime an alert is fi red,
there are tabs on that alert that take you right to a help page. And it allows you to keep your own company knowledge base on these issues that are happening on your network. There are only three of us in the IT department. We can see what’s going on among ourselves without worrying about somebody being out sick or on vacation,” he said.
At 250 desktops, 40 servers and three IT professionals, Explorer Pipeline is near the upper end of Microsoft’s segmentation charts for customers.
From that perspective, one aspect of SCE 2010 that Vander Kooi appreciates is the improvements to automatic discovery. Now that he can set automated discovery to certain Organizational Units within the Active Directory, it’s allowed him to use the feature. Junk alerts made the feature more trouble than it was worth in the SCE 2007 release.
But he’s also comfortable with the upgrade path if his employer grows in employees, number of servers, complexity or all of the above.
“Before SCE came out, it was really kind of a no-man’s land,” Vander Kooi said of the situation of midmarket and smaller IT organizations. “With Essentials, it’s been a great product that’s really helped us tremen-dously. There’s a migration path in place to move into Operations Manager and Confi guration Manager and Virtual Machine Manager. You can move your business into the enterprise arena without disrupting your envi-ronment too much.” •
Scott Bekker ([email protected]) is editor in chief of Redmond Channel Partner magazine. Jeff rey Schwartz and Lee Pender contributed to this report.
GET MORE ONLINEVisit RCPmag.com to view the one-hour webinar referenced in this article, hosted by RCP Executive Editor Jeff rey Schwartz.
Of no small value when the boss reads headlines about a Microsoft Patch Tuesday is the ability to present him or her with a SCE status report on the rollout of Microsoft Critical and Security Updates.
RCPmag.com MAY 2010 Redmond Channel Partner 9
TRENDS ISSUES
ANALYSIS
Venture capital funding for tech companies is bounc-ing back modestly from what appears to have been a low point late last year.
While VCs are circling companies in such hot growth areas as mobile communications, Software as a Service (SaaS) and green technol-ogy, they’re also taking a more disciplined approach to investing than in years past.
VCs invested a paltry $17.7 billion last year, the lowest level since 1997, representing a sharp 37 percent decline from the $28 billion invested in 2008 and the $30 billion in 2007. The figures were released in March by PricewaterhouseCoopers LLP, which published its 15th annual MoneyTree Report.
The report, based on data compiled by Thomson Reuters, showed that funding started to plummet in the fourth quarter of 2008, when the overall economy went into a freefall on the heels of the collapse of Lehman Brothers Holdings Inc. and AIG Inc. In concert with last summer’s recovery, VC funding picked up incrementally in the third quarter, though it dropped nominally in the fourth quarter at $5.1 billion and $5 billion, respectively.
In a presentation of the report at a New York Technology Council meeting March 18, PricewaterhouseCoopers Partner David Silverman said the market for VC funding and successful exit strategies
remains depressed. “I wish I had better news,” Silverman said. “The venture capital industry followed the overall economy and declined fairly signifi cantly.”
“Things are a bit rough out there,” said Pimm Fox, anchor of Bloomberg Television’s “Taking Stock,” who
moderated a panel discussion of fi ve VCs and the CEO of a company that received funding from one of the fi rms.
VCs funded 2,795 rounds last year, compared with 3,985 in 2008. Median deal sizes were also down. The average round was $2.8 million last year, compared with $3.3 million in 2008 and $3.8 million in 2007.
Biotechnology fi rms got the most last year, $3.5 billion, down 19 percent. A total of 619 software companies received $3 billion in funding last year, down 40 percent. More than 200 IT services fi rms received a total of $1.1 billion, down 41 percent for the year.
Among other areas: 118 semiconductor fi rms received $772 million, down 53 percent, and 140 telecom companies received $559 million, down 67 percent. The one area that seemed to see the lowest decline included companies that off er networking gear, where $716 million in funding represented a mere 5 percent drop covering 93 deals.
The study also found over the last year a shift from later-stage companies to earlier-stage companies, Silverman said. Investments in later-stage compa-nies overall were nearly $6 billion with 799 deals, down 44 percent over the prior year. Companies receiving expansion
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VC Funding Remains TightThe market for venture money appears to have bottomed out, but VCs remain cautious. By Jeffrey Schwartz
{ Venture Capital }
REPORT
Venture-Backed M&A Activity Dove, but Average Deal Sizes Rose in 2009
Year No. of Average M&A M&A Deals Deal Size (in millions)
2005 350 $1062006 375 $1162007 378 $1762008 348 $1152009 262 $144SOURCE:
May 2010
SOURCE: PRICEWATERHOUSECOOPERS LLP/NATIONAL VENTURE CAPITAL ASSOCIATION MONEYTREE REPORT
Redmond Channel Partner MAY 2010 RCPmag.com10
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funding dropped 47 percent with $5.4 billion allocated to 801 businesses. Early stage funding dropped only 13 percent covering 883 companies for a total of $4.6 billion, though it jumped 32 percent in the fourth quarter compared to the prior year and up 51 percent from the prior quarter.
“After the tech bubble, we saw a shift going into later-stage companies by VCs away from the early stage, and only recently have we begun to see a reversal of that trend,” Silverman said. “That’s good news for companies that are forming young, early stage companies—VCs are beginning to look at them again. We see the same or similar trend for the full year.”
Yet perhaps the worst news from the PricewaterhouseCoopers report was the state of exits. Though IPOs doubled last year over 2008, “it’s still at a paltry 13 [percent],” Silverman said. “That’s not a number that’s going to be sustainable to bring us back to the levels of venture investment that we saw in prior years.”
Those seeking funds are seeing higher scrutiny of their business models.
“There’s less willingness to let it ride now than there used to be,” said Vytas Kisielius, CEO of Collections Marketing Center LLC. VCs are looking more closely at the customer sets of the companies they’re considering investing in, Kisielius added. “It takes so much more proof that there’s a real market and that there’s real customers.”
Kisielius, who described himself as a “serial entrepreneur,” said it’s important to be realistic when making your case to potential investors these days.
“I’ve never been one to believe that the investors are here for my benefi t, but for our benefi t. If I make it good for them they’ll make it good for me,” Kisielius said. “If I can’t make it good enough for both of us, I know who’s going to win: It’s not me. That’s the way the deal works.” •
Jeff rey Schwartz is executive editor of RCP. Reach him at [email protected].
Multi-Purpose DB Tool on TapMicrosoft: SQL Server 2008 R2 will be generally available this month.By Kurt Mackie/Special to RCP
CR
While the Microsoft Office 2010 and SharePoint 2010 launches on May 12 are garnering the most attention right now, Microsoft SQL Server 2008 R2 will also become generally available this month.
“As we announced in January 2010, SQL Server 2008 R2 is still on target for availability by May and will be on the May price list,” a Microsoft spokesperson said by e-mail.
The Microsoft SQL Server 2008 R2 CTP released around the beginning of the year was feature-complete, with subsequent testing designed to iron out bugs in the fi nal feature set.
R2 signals that Redmond considers this version of SQL Server to have incremental improvements. Highlighted features include a self-service BI capabil-ity using PowerPivot and complex event processing support using a feature called StreamInsight. Two new product off erings also will be rolled out: a Datacenter SKU and a Parallel Data Warehouse SKU.
“Business intelligence features are the most compelling thing about R2 and will probably drive most upgrades,” said Rob Helm, an analyst with Directions on
Microsoft, in an e-mail interview. “The business intelligence [BI] features address both ends of the spectrum. PowerPivot will enable departments to set up smaller-scale BI systems for expert Excel users, while Madison will enable SQL Server to tackle the highest-end data warehouses.”
Microsoft has also been putting out the word that SQL Server 2008 R2 will entail a price increase for customers who lack Software Assurance (SA). SA is a licensing option that lets users upgrade to the next product iteration at no extra cost over the SA contract’s time span—if a new product is released within that time span.
“The price per processor license for 2008 R2 Standard Edition will increase 25 percent,” said Lesley Rubin, a Microsoft partner marketing manager for the U.S. Central Region. “For the R2 Enterprise Edition, the price per processor will increase 15 percent. For both editions, server CAL licensing will remain fl at. This price increase will take eff ect upon General Availability of R2 this May.” •
Kurt Mackie is online news editor, 1105 ECG.
Visit RCP mag.com for daily news updates
Redmond Channel Partner is designed to help make Microsoft partners more successful. The Microsoft channel contends with a unique set of technical, business and even political issues. Redmond Channel Partner directly serves the channel and off ers advice on how to expand businesses, develop fruitful partnerships, build a services-oriented business, work more closely with Microsoft, develop and market unique areas of expertise and satisfy customers.
Become an Active Subscriber today!
Apply for your FREE magazine subscription by visiting: RCPmag.com/subscribe.
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Redmond Channel Partner MAY 2010 RCPmag.com12
Business ProblemDCS Netlink started in 1991 as PC to Go, a retailer of computer hardware and software, and a network solutions provider primarily for small companies. We’ve evolved into a technology solutions provider, specializing in networking, e-business, application services, wireless services, IT training and network support services.
For part of the recession, DCS Netlink was essentially insulated from much of the economic strife due in part to our strong community and customer relationships. It was only as customers themselves started to feel the economic strain that we began to feel the pain. Long-term projections made it apparent that for DCS to thrive, we needed to take some strategic actions in the short term.
Knowing we were in an economic crisis was one thing, but formulating a plan on how to extricate ourselves proved to be quite another. Because our staff is our greatest asset, it was of utmost impor-tance to us that every decision resulted in no undue harm to either our company or our community.
I had also decided to make a run for the Wisconsin State Senate, a time-consuming process that would require some changes in the day-to-day and week-to-week management of the business.
In early November 2009, I attended the Heartland Technology Group (HTG) conference in Orlando, Fla. Being well aware of the economic crisis both across the country and within our own community, I shared my concerns and observa-tions with HTG Founder Arlin Sorensen and other trusted HTG peers. Arlin suggested a strengths/weakness/opportunities and threats (SWOT) visit. He personally volunteered to the lead the SWOT.
Our three-member team of SWOT advisors was at our doorstep within two weeks. They clearly outlined their expectations and objectives in advance of their arrival. During their two days here, they directed all discussions. Time was scheduled for each person and level of manage-ment to accurately gather all pertinent data in an eff ort to give their best counsel. They left no stone unturned.
Our SWOT advisors left us with fi ve points of action. The fi rst, Stop the Financial Bleeding, came as no surprise. The team gave us an unbiased view of where we needed to make signifi cant cuts in expenses and staffi ng. This gave us the direction we needed to be able to make changes we were initially reluctant to make. In their second recommenda-tion, on Leadership, the SWOT team created an organizational chart that showed how we could use less staff and better align our people with their strengths.
Next, they recommended Building a Sales Force, something we’ve struggled with in the past. SWOT team members’ fi rst-hand experiences building and growing their own sales forces were invaluable to us. With the fourth point—Understanding Business Units—we determined which of our off erings have the most profi t potential so we could simplify, streamline and focus our business units and plans. Finally, Developing a Communication Strategy, took on added importance with the new organizational chart, new business focus and because of my run for political offi ce. It was imperative that I get only the information that gives me the pulse of the business. Additionally, as each team member took on new roles and responsibili-ties, keeping lines of communication open, but not overloaded, has been paramount.
The fi rst change we implemented was to our leadership structure. Change rippled outward from there. Our meeting structures improved. We became more focused in our business plan and in defi ning processes, systems and procedures. We made several diffi cult fi nancial decisions—most notably to lay off two team members—by keeping the health of the business at the forefront. We began building our sales team in earnest. Our bottom line improved dramatically.
As we continue to implement the suggestions of the SWOT team, we keep in mind the wise words of the farm boy from Iowa (Arlin): “Vision without execution is hallucination.” •
HTG’s Recommendation DCS NETLINKRice Lake, Wis.Specialty: Technology solutions provider
COMPANY VITALS:
15 employees
19 years in business
Annual revenues
$1.7 million
Stop the fi nancial bleeding, restructure the leadership, focus on the sales force, streamline communication.
DANE DEUTSCH, CEO
CR Watch for the RCP Salary Survey hitting your inboxes
{ Peer Review }
MSP Updatee-Newsletter
Subscribe Today. It’s Free!
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Redmond Channel Partner MAY 2010 RCPmag.com14
The Microsoft Worldwide Partner Conference (WPC) is coming up July 11-15 in Washington, D.C. We caught up with Pam Salzer, Microsoft senior director of Worldwide Partner Marketing, to nail down 11 things Microsoft partners need to know about WPC 2010.
1Cloud Computing. The message lately from Microsoft CEO Steve Ballmer and channel chief Allison Watson is that
Microsoft is “all in” when it comes to the cloud. Expect a lot more detail on what that means for partners this July.
2Awards. Categories, geographies and pageantry are all expanded this year when it comes to partner awards.
3Large Group Networking. New tools will give people a way to stay on top of big events during the week based on
professional and personal interests—say a SharePoint reception or a group run through the city for joggers.
4 Business Models. In the past, Microsoft Business Groups owned the fi rst few days of the conference,
while business models (think hosters, ISVs, SIs) got sessions late in the week. Partners told Microsoft to fl ip that around a bit.
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5MPN Content. The Microsoft Partner Network goes into full swing this year. A lot of sessions will help partners
navigate the changes.
6Product/Program Launches. Attendees will get the news fi rst and be able to corner their Microsoft
contacts for details.
7Interactive Sessions. Of some 400 sessions this year, around 100 will be
“300-level-style” discussions. Microsoft will put the experts up front, and partners will get to take the sessions wherever they need them to go.
8Embassies. Washington, D.C., has one of the highest concentrations of foreign embassies in the world. Microsoft is
working to combine D.C.’s international fl avor with WPC’s international audience.
9Sales from Marketing. The old track was Sales and Marketing. Partners asked for more distinctions, so they
got separate tracks for their separate professionals.
10Day Passes. With all the public sector partners in the area, and the proximity of East Coast partners,
Microsoft added several one-day options to the ticket mix this year.
11Touring. Arguably no city has as much to do for free as D.C. Microsoft will be organizing sight-seeing tours
for early arrivals and late stayers. And we didn’t even get to the parties. If you’re going, sign up quickly. Salzer says the conference looks like it could sell out this year by late this month or early June.
On Ending Itanium Support Microsoft announced last month that support for Intel Itanium processors will be phased out for Windows Server, SQL Server
and Visual Studio—ending the Microsoft era of multi-architecture support in server processors. Martin Reynolds, vice president and research fellow at Gartner Inc., put the move in perspective:
“This isn’t the fi rst time Microsoft has threatened to stop putting Windows on Itanium, they originally started talking about this in 2003. You can have 64, 128
Itanium processors in a system. You can’t do that with x86. [Now, with] Windows, you really can’t do that. If you’ve got a lot of work to do on Windows, you have to use virtualization.”
11 Things to Know About … WPC 2010 By Scott Bekker/RCP Staff
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{ Quotable}
{ RCP on the MPN }
RCPmag.com MAY 2010 Redmond Channel Partner 15
{ Tablets }
While the newly released Apple iPad commanded the attention of the tech world, Hewlett-Packard Co. quietly promoted its forthcoming alternative—the Slate—expected to be the fi rst tablet-style device based on Windows 7.
Microsoft CEO Steve Ballmer fi rst previewed the HP Slate at the Consumer Electronics Show in January. In February, a week after Apple Inc. announced plans for the iPad, HP released a video previewing the Slate. Like the iPad, the HP Slate will have a similar form factor and a multi-touch interface.
The HP video off ers a closer view of the Slate, playing up some key features that are notably missing in the iPad. Chief among them is its support for Adobe Flash and the Adobe Integrated Runtime (AIR). Apple CEO Steve Jobs has denounced Flash and AIR as buggy, though Adobe says the technology is the basis of 75 percent of the Web’s video.
Also, unlike the iPad, the Slate will also support external storage via an SD card slot and a built-in USB interface (the iPad has a separate bridge that links to a USB connector).
Specifi cation SpeculationWhile HP is not commenting on specs not revealed, Engadget posted what appears to be a leaked internal document that compares the Slate to the iPad. The document states the fi rst Slate will have an Intel 1.6GHz Z530 Atom processor with a UMA graphics accelerator for 1080p high-defi nition video and fi xed 1GB of RAM.
HP will off er two levels of storage capacity—32GB and 64GB—with a starting price of $549. While the WiFi connectivity on the iPad will be a faster using the newest 802.11n standard, the
Slate will only support 802.11g. The Slate will have optional support for 3G cellular networks but it remains unclear which carriers it will work with. The Slate display is slightly smaller than the iPad screen. The HP Slate will off er fi ve hours of battery life to the iPad’s 10.
Apple reported more than 450,000 iPad sales in the fi rst week. One iPad buyer, Andrew Brust, director of new technology at Gold Certifi ed Partner twentysix New York, said the HP Slate would look more promising if it incor-porated the technology planned for the Microsoft Windows Phone 7 Series.
“It seems that HP has built their own UI on top of Windows to optimize fi nger-friendliness, which is a reasonable approach,” Brust explains. “What I hope Microsoft would do is take the Metro UI that they have for the phone and scale that up for the tablet and off er that to the broad array of OEMs.” •
CITRIX PORTS APPS TO APPLE IPADGoToMeeting and Receiver are the Florida company’s fi rsts forthe new device.By David Nagel/Special to RCP
Citrix Systems Inc. has released versions of its GoToMeeting and Receiver applications for iPad. Both are available now at no charge. Citrix Receiver is a tool that allows users to access their virtu-alized Windows applications (via XenApp or XenDesktop) through their Apple iPad or iPhone. It also lets users access and view Adobe Flash- and Microsoft Silverlight-based Web sites. The Citrix GoToMeeting app allows users to access GoToMeeting Web conferences. The features include:✱ Support for viewing a wide range of presentation materials, including slideshows and spreadsheets✱ The ability for users to join a meeting from an e-mail invitation✱ Support for zooming on materials using gestures✱ Support for audio participation via the iPad microphoneCitrix Receiver requires XenApp or XenDesktop. GoToMeeting for iPad requires the latest version of the GoToMeeting server. Citrix Receiver is also available for iPhone. GoToMeeting was not immediately available for iPhone. •
David Nagel is executive editor, Web, for the 1105 Education Technology Group.
HP Quietly Touts iPad RivalHP Slate expected to be the fi rst tablet-style device based on Windows 7.By Jeff rey Schwartz/RCP Staff
Coming soon: Partner’s Guide to SQL Server
{ Ecosystem }
Redmond Channel Partner MAY 2010 RCPmag.com16
{ Security }
{ Gold Club }
Even the Dali Lama isn’t safe from hacking, according to a new report.
The report, “Shadows in the Cloud,” documents Internet espionage opera-tions that targeted and compromised computer systems in India and the offi ces of the Dalai Lama, among other instances. Cyber threats are now the great equalizer around the world.
“Countries no longer have to spend billions of dollars to build globe-spanning satellites to pursue high-level intelligence gathering when they can do so via the Web,” the report’s authors write.
Most of this clandestine activity is aimed at the world’s two fastest growing economies in China and India, accord-ing to the report. In the case of the Dalai Lama, hackers extracted an entire year’s worth of e-mail messages to and from the spiritual leader.
The joint report by the Information Warfare Monitor and Shadowserver Foundation monitored attacks originating from the People’s Republic of China, particularly Chengdu, the capital of China’s Sichuan province. However, the report stops short of
saying that these attacks are government sanctioned or have the offi cial mandate of any government.
The report’s release comes at a pivotal time. Google Inc. recently stopped censor-ing its Google.cn portal for the Chinese government after human rights advocates’ e-mail accounts were tapped by hackers traced to China. Last week, Google turned its attention to Vietnam, where it says attackers have spread malware through Vietnamese language keyboard software, using that tactic to curtail political dissent.
Andrew Storms, director of security at security software fi rm nCircle, suggested that political spying over the Internet is now widespread.
“The only surprise [from the report] is the expectation that there’s any major world power that isn’t engaged in some form of cyber-monitoring of both friendly and adversarial relationships,” Storms said.
“The reality is that every country is vulner-able to cyber espionage and cyber attack.” •
Jabulani Leff all is a contributing editor to Redmond Channel Partner magazine.
Internet Espionage a Great EqualizerReport documents how cyber threats are becoming a low-cost tool for intelligence gathering. By Jabulani Leffall/Special to RCP
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As any company that has earned the distinction can tell you, achieving Microsoft Gold Certifi ed Partner status is no easy feat. Congratulations to the following organizations that have recently joined the top Microsoft partner group:
ASAP Automation Inc.Based: Louisville, Ky.Line of Business: Software and automation for supply-chain logisticsBecame Gold Certifi ed: March 2010Microsoft Competencies: Custom Development Solutions, Mobility Solutions, and SOA and Business Process www.asapauto.com
Cabinet NGBased: Madison, Ala.Line of Business: Document management and workfl ow softwareBecame Gold Certifi ed: April 2010Microsoft Competencies: ISV/Software Solutionswww.cabinetng.com
IntraLinks Inc.Based: New York, N.Y.Line of Business: On-demand solutions for secure collaboration, communication and the exchange of critical information inside and outside the enterpriseBecame Gold Certifi ed: March 2010Microsoft Competencies: ISV/Software Solutions and SOA and Business Processwww.intralinks.com
MLS Data Management SolutionsBased: Arlington, TexasLine of Business: Data-driven marketing and Business Intelligence solutionsBecame Gold Certifi ed: March 2010Microsoft Competencies: Business Intelligence and Custom Development Solutionswww.mlsc.com
SecQuorumBased: Ploermel, FranceLine of Business: Consulting and outsourcing services for System Center Operations Manager Became Gold Certifi ed: March 2010Microsoft Competencies: Network Infrastructure Solutions and Security Solutionswww.secquorum.com
If your company has recently become a Gold Certifi ed Partner for the fi rst time, share the news in RCP! E-mail announcements, containing all the information listed above, to Managing Editor Wendy Gonchar at [email protected].
FREE WEBCASTS! Visit RCPmag.com for live and on-demand webcasts. You’ll get tips and learn about technologies that can improve and grow your business. Watch these free webcasts without leaving your desk. This month’s featured events include:
Deduplication for Windows Servers Sponsored by Exar
How to Make Recurring Revenue Sales Easy! Sponsored by N-able Technologies Inc.
Redmond Channel Partner Presents: Staying Profi table Sponsored by Zenith Infotech
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Google.Will the Search Giant Disrupt the Microsoft Channel ?
BY SCOTT BEKKER AND JEFFREY SCHWARTZ ✱ PHOTO BY CHRISTOPHER HARTING
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oogle Inc. and Microsoft are engaged in an epic battle that is reaching the cloud.
The scope of the battle is not existential, like the Microsoft-Netscape Communications Corp. smackdown that doomed Netscape to stumble
until it fell, exhausted, into the arms of AOL Inc. Instead, it’s likely one of those
battles that ends with the loser highly successful by all measures, but less relevant. Think of the IBM versus Microsoft fi ght that played out over the battleground of Windows versus OS/2 in the early 1990s.
How Microsoft comes through this fi ght is not just relevant to the 88,214 people working in Microsoft offi ces worldwide. It also matters to the estimated 600,000 partner organizations engaged with Microsoft globally and their multiple millions of employees. Will that channel remain largely intact or be fundamentally disrupted as the two giants struggle to control the potentially lucrative productivity and collaboration applications market in the cloud?
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A BATTLE WITH MANY FRONTSWhile Google and Microsoft are competing in many areas, the main battle is clearly in search. The heat seems to have come down a bit since former Microsoft engineer Mark Lucovsky walked into Microsoft CEO Steve Ballmer’s offi ce in November 2004 to tell him he was leaving the company for Google. In a sworn state-ment, Lucovsky said Ballmer threw a chair across the room and launched into an expletive-laden rant against Google and its CEO Eric Schmidt. When Lucovsky’s account was made public about a year after the event, Ballmer described Lucovsky’s characteriza-tion of the meeting as a gross exaggeration of what took place.
While any screaming seems to have settled—and Lucovsky has since moved on to VMware Inc.—the two companies continue to make moves around search. Small wonder. With the search engine as the default homepage for much of the Web, companies that need to reap the kinds of outsized revenues that Microsoft and Google shareholders demand must control that high ground.
One of Ballmer’s biggest problems at the time was Google’s massive search share, and much of his focus in the interim has been on building up Microsoft’s piece of the market. One case in point: the lengthy on-again, off -again courtship of Yahoo! Inc. as Ballmer tried to combine the forces of the No. 2 and No. 3 search players to make a run at No. 1. Then, Ballmer and Microsoft invested big in rebranding and re-architecting the search engine with Bing. On a related track, Microsoft and Yahoo! reached a deal in July in which Yahoo! agreed to use the Bing search engine on its sites while handling sales worldwide for premium search advertising for both companies.
Those moves are having some eff ect, but the climb for Bing remains steep. Figures released in April by online tracking fi rm comScore showed Bing’s share of the U.S. search market had increased for the 10th straight month, but had still only reached a modest 11.7 percent. Yahoo! also increased share to 16.9 percent. Google declined slightly, but from a huge lead. Its new market share, according to comScore: 65.1 percent.
While doing enough to mostly stave off its two main search competitors, Google has been moving aggressively to attack from its search beachhead in every direction it can. Given Microsoft’s ubiquitous position in IT, that puts the companies in confl ict in dozens of technology markets.
Google’s foray into the channel commenced about five years ago when the company was looking to penetrate the enterprise market with the Google Search Appliance. Microsoft quickly countered with its own enterprise search
initiatives within the Microsoft Partner Network (then the Microsoft Partner Program).
Another area where Google is disrupting the channel is in the smartphone market with its Android platform. It would be inaccurate to say Google is trying to take anything away from Microsoft in the smartphone market. That would downplay Google’s ambitions, and overstate Microsoft’s position. Both companies are fi ghting each other and a slew of others such as BlackBerry-maker Research In Motion and Apple Inc., whose iPhone is disrupting the entire smartphone market.
In the emerging cloud, Google, Microsoft and others, such as IBM, Hewlett-Packard Co. and Amazon.com Inc., are racing forward by building out data centers and creating global networks of data centers that can be exploited by corporate developers, canny systems integrators and independent software vendors with global ambitions. Platforms like Windows Azure, Amazon Web Services and the Google App Engine dominate the discussion.
But it’s in the area of online offi ce productivity and communications stacks, where the battle changes from a spectator sport for Microsoft partners to a situation where the great powers of the world are digging trenches in diff erent parts of your neighborhood, and it’s time to pick which side is going to advance your own interests. Google’s challenge with Google Apps is unlikely to fi nally crack apart the lucrative chan-nel market in personal productivity and communications software deployments for the channel in the Offi ce 2010 release time frame (see
“Productivity Play” on p. 25 for more on Offi ce 2010). Nonetheless, it’s almost indisputable that Google is making more headway along an
“There’s still a core level of functionality and customizability that [Google Apps hasn’t] yet achieved.” Robert Leibholz, Vice President, Sales and Business Development, Intermedia
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avenue of attack that has already been paved by Sun Microsystems Inc. and its new parent Oracle Corp. and OpenOffi ce.org.
The Google Apps and Microsoft Business Productivity Online Suite (BPOS) rivalry has not yet come anywhere near the intensity of the main battle between Microsoft and Google in search. But channel partners can see the lights from that artillery duel as they take part in a side battle that is also strategic for both companies—the long-term strength and loyalty of channel partners.
Nonetheless, a lot is at stake: Microsoft has a franchise of 500 million Offi ce users. Offi ce is Microsoft’s cash cow. While the 40 million customers who pay for its Offi ce online services today represents a small but noteworthy percentage of that user base, Google says it has 25 million Google Apps customers, though a report by market researcher Gartner Inc. says only 1 million are paying customers. But that’s not to suggest that Google’s headway should be taken for granted. Nor should Microsoft presume Offi ce will remain its cash cow forever.
GOOGLE APPS AND BPOSGoogle formally launched the Google Apps Authorized Reseller Program more than a year ago, and announced in February that it had hit the 1,000-partner milestone worldwide. According to Google Apps Channel Program Manager Jeff Ragusa, most of that growth in channel partners is relatively organic and the company is only now getting started with heavy-duty marketing efforts to recruit and enable partners. In its broad strokes, the Google program is fairly similar to the Microsoft BPOS, which was widely viewed by Microsoft’s own partners as a reaction to Google’s off er-ings. Both programs off er online versions of e-mail, collaboration on documents and spreadsheets, as well as other components.
Despite momentum, both Google and Microsoft are both realizing how critical channel partners are in reaching the small to midsize business (SMB) customers that both companies hope will become a lucrative market for the services they can off er.
“Cloud computing and Google are not a threat to your business because our roles are diff erent,” Ragusa said in a recent webinar with RCP. “Google’s role is we leverage our vast data center resources and engineers to build products, great technology and innovate on that. The solution provider’s role—in our view—is you know the customers, you know their business and you know the technology side, and you use that and you use your knowledge of your clients’ business to apply technology from various vendors to solve business problems and achieve business goals.
“We realize you have built a customer relationship where they trust you for technology advice and support, we don’t want to get in the middle of that and the cloud and Software as a Service doesn’t change the relationships,” Ragusa said.
Meanwhile, even as Google takes its off erings to the channel, the company continues to plug gaps in its capabilities—both to catch up with Microsoft’s lengthy feature list lead and to help address new realities of online/offl ine synchronization that are arising as cloud-based models take hold.
For example, Google recently acquired DocVerse, a company started by former Microsoft employees from the Offi ce Business Group that originally had board members from both Microsoft and Google. The product brings Google-style collaboration to the Microsoft Offi ce suite.
For all the movement, however, Giovanni Mezgec, general manager of the Microsoft Offi ce and Productivity Group, isn’t really engaging in corporate spin when he says, “There’s a lot of noise about [Google Apps]. I don’t know if the usage is high yet.”
Meanwhile, Microsoft has been tweaking the BPOS off ering since its 2007 launch to bring more partners onboard. Yet Microsoft has been loath to share information about the number of seats that have been sold, and especially to separate those seats out from the related but broader category of Hosted Exchange Online and Hosted SharePoint Online seats. That reticence, along with a recent round of price cuts, fuels rumors that overall adoption remains quite low on the Microsoft side as well.
Many partners say that no matter how low adoption is now, they know they’ve got to adjust their business models to accommodate expected customer demand for the online productivity suites. How they decide which technology to go with is varied.
GOOGLE INSPIRES A START-UPOne of Google’s authorized resellers is Cloud Sherpas, a 2-year-old, Atlanta-based company that calls itself a cloud computing
“The smaller and more horizontal applications a VAR serves, the faster
they will disappear.” Jack Zubarev, President, Cloud Services Division, Parallels
RCPmag.com MAY 2010 Redmond Channel Partner 23
specialist and application developer. The company special-izes in migration services for enterprises moving from Microsoft Exchange, Lotus Notes and Novell GroupWise, among other systems, to Google Apps.
“We took a bet that Google was really going to devote resources to the enterprise organization and they have,” says founder and CEO Michael Cohn. “The partnership program is just in its infancy. One of the things we love about being a Google channel partner is they are very responsive to feedback, not to say others aren’t. But we’ve developed strong ties with their support, engineering and marketing teams.”
Cohn adds that he’s been able to off er services with reasonable margins via the Google Apps platform. “There are a couple of diff erent upsell opportunities when we start talking about adding additional products,” he says. “Right now everyone is talking about messaging and collaboration and that’s certainly what gets a lot of ink, but we see the Google off ering as being a whole lot bigger than that. There’s an opportunity to build custom applications on Google and have them hosted on Google App Engine that, over time, I expect to see additional off erings coming to the table and additional opportunities for us as channel partners to deliver value and a better margin.”
TESTING THE WATERSFor Clearway Technology Partners, a professional services and software company with a deep Microsoft history, the inclination was to stick with what it knew. Gene Rodgers, president and CEO of the Boston-based Gold Certified Partner company, says he never looked at the Google off ering as anything but competition.
“We’ve been a dedicated Microsoft partner for going on 13 years now. We’ve been working on SharePoint and Exchange for most of that time. We’ve just found that the Microsoft-hosted off erings are logical extensions of the Microsoft product suite,” Rodgers explains.
“We’re absolutely thrilled that Microsoft has moved into this space, and we see the potential for a huge market shift in the next three to fi ve years in this direction. It’s not just the future, it’s the present. We discuss BPOS with every customer,” says Rodgers, who adds that he’s not particularly worried about cannibalization despite his existing business of installing e-mail and collaboration solutions.
“We’re seeing more market opportunities with clients that wouldn’t have considered an Exchange installation, that’s typical of small clients,” Rodgers says. “But we’re also seeing interest with large multinationals, especially when they have small offi ces in diff erent countries, where they used to put servers.” He says Clearway runs into competition with Google in about 10 percent to 15 percent of their accounts.
Rodgers says hosted Microsoft offerings currently account for about a fifth of Clearway’s business. “It’s gone from nothing to a fairly substantial amount, and I’d say about half of that is incremental revenue. We think it will be from 25 percent to 35 percent this next year.”
PLAYING BOTH SIDESA Gold Certifi ed Partner executive who’s embracing the cloud but taking a diff erent approach is Tony Safoian, president and CEO of SADA Systems, based in North Hollywood, Calif.
SADA Systems is an early and enthusiastic participant in the Google Apps Authorized Reseller Program and also off ers Microsoft BPOS.
Safoian says bringing out both off erings reinforces his fi rm’s standing as a trusted advisor.
“We feel like there are customers that are a great fi t for Google and culturally they may be a little diff erent,” Safoian said during the recent RCP webinar. “And there are customers who will never get away from a desktop-oriented experience or they just love the Outlook interface and they’ve invested a lot in that technology. We’re just being honest and faithful to the market in being able to speak intelligently about both solutions and being able to off er whichever one makes the most sense.”
Other Microsoft partners say they aren’t yet certain they want to go down the path of also partnering with Google, but their patience with Microsoft isn’t endless. Erik Thorsell, president of Minneapolis-based Success Computer Consulting is among the early beta testers of the forthcoming Microsoft Offi ce 2010. He isn’t ruling out investigating Google’s program but it’s not in the immediate game plan.
“So far, we’ve made the decision to stay loyal to Microsoft,” Thorsell says. “Having said that, with everything that’s happening with Microsoft going ‘all in’ on the cloud, we need to understand what that means for us as partners. So we have a team of people who are spending this quarter doing some learning and research about the competitive off erings and Microsoft off erings, to decide where we want to end in the near term and long term. Nothing is off the table but in the near term we are still Microsoft loyal partners.”
PARTNERS WITH LAYERSThe Microsoft channel is multi-layered, of course, and some partners have partners of their own, amplifying the signifi cance of their decisions when betting on diff erent platforms. One of those partners is New York-based hoster Intermedia, which markets itself as the largest provider of Microsoft Exchange Server 2010 services and has a network of nearly 5,000 partners helping to resell them.
Robert Leibholz, senior vice president of sales and business development at Intermedia, has been an outspoken critic of several of Microsoft’s moves around BPOS. But when it comes to the Microsoft-Google face-off , Leibholz is entirely in Microsoft’s corner for now.
“I think Google Apps is an interesting product. We don’t sell Google. There’s still a core level of functionality and customizability that [Google Apps hasn’t] yet achieved. At the same time, it’s Google; they know what they’re doing,” Leibholz says.
Intermedia and its partners rarely come up against Google in deals, Leibholz says. “When we do see it in the Exchange marketplace, it’s typically for the much smaller deals or occasionally for some really large deals that we would never touch anyway, like a municipality with 30,000 mailboxes or a university.”
In those cases where Intermedia partners take on Google resellers in deals, Leibholz has a detailed battle card ready for them to highlight differences in service-level agreements, security, administrative control, support and backup.
A LONGER-TERM OUTLOOKIndustry observers view Google as big trouble for Microsoft long-term, although they have a mixed prognosis for Microsof channel partners.
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Silicon Alley Insider Editor Henry Blodget thinks Microsoft appears to be shrugging off Google Apps as a threat to its $10 billion-plus-per-year Offi ce franchise, but he says it should be taking Google more seriously there.
“ ... Microsoft Should Be in Major Panic Mode,” Blodget writes. Why? He argues that Google has improved the capability of its offering and that many Office users will migrate. Microsoft can add more features, he argues, but those will appeal to a small subset of overall users.
“So don’t take the puny size of Google’s apps business and the fact that big companies aren’t seriously considering Apps as an alternative as a sign that Microsoft is safe,” he writes. ”Microsoft isn’t safe. Microsoft is very exposed.”
Directions on Microsoft analyst and RCP columnist Paul DeGroot describes Google’s channel eff ort as nascent but doesn’t discount the threat the company could pose down the road.
“It’s probably more important as a symbol of what Google is willing to do,” DeGroot says. “Google is getting some channel experience and exposure, something it hasn’t had much of in the past. While I don’t see it as an immediate threat, it is something to watch out for. Google has the ability to surprise, which makes Microsoft nervous.” (For more of DeGroot’s views on Google and Microsoft, see p. 40.)
To Darren Bibby, a channel analyst with research fi rm IDC, the fact that Google is still learning about channels— while Microsoft is approaching channels from decades of experi-ence—is probably a good reason for solutions providers to include Microsoft-hosted offerings in their mix. Even Google’s previous channel experience with the enterprise search appliances was mostly outsourced to distribution to handle, Bibby notes.
“The technical comparisons you can make are Microsoft BPOS against Google Apps—that’s a pretty fair comparison. But Microsoft is a partnering company, with something like 95 percent of their revenues coming through partners. They have partnering in their DNA. Partnering is not in Google’s DNA. [Google is] trying some things,” Bibby says.
Much as Cloud Sherpas, SADA, Clearway, Success Computer and Intermedia are choosing diff erent routes, Bibby says every partner company will have to pick its own slightly diff erent course.
“The partners from Microsoft who might be thinking about BPOS—and I think a lot are thinking about it—those partners may also be thinking about Google Apps. They’re not interchangeable,” Bibby says.
“I think it’s a really tough question. It’s like asking what’s a healthy stance on e-mail altogether. Everyone’s going to do something that’s a little diff erent depending on their business. For someone who is totally invested in the Microsoft stack, BPOS is a great addition.”
At the same time, no matter which vendor a solutions provider sides with, any shift toward cloud computing will reshape the channel fairly radically over time, and partners must also focus beyond their relationships with specifi c vendors.
“I think that the market is going to be demanding [off erings like BPOS and Google Apps], and it’s good for customers. I think the jury’s still out on whether these are good models for partners to be in. These are really low margins,” Bibby says.
Jack Zubarev, president of the cloud services division of Parallels, which provides virtualization, automation and provisioning solutions to hosting providers—many of whom then sell cloud-based services to small businesses—provides a cautionary tale for partners who don’t fi nd a way to add value to their resales.
“In the traditional hosting industry, historically the channel was very, very important. Five years ago, the majority of small businesses did not really buy services of a company like GoDaddy directly. They would go to a Web designer, and the Web designer would put Web applications together,” Zubarev says. “What’s happening today is we’re seeing more and more small businesses go directly to those big hosters. The whole population is becoming more technology savvy, and the industry evolved to more easy-to-use tools. Those who were bottom-feeders creating very, very simple Web sites for very, very small companies disappeared.”
The same will be true in IT, Zubarev predicts: “The smaller and more horizontal applications a VAR serves, the faster they will disappear.” •
Scott Bekker ([email protected]) is editor in chief and Jeff rey Schwartz ([email protected]) is executive editor of Redmond Channel Partner magazine.
GOOGLE APPS: PUTTING MICROSOFT OFFICE BETWEEN SCYLLA AND CHARYBDISWe asked Directions on Microsoft analyst and RCP back-page columnist Paul DeGroot for his take on the product threat to the Microsoft product stack from Google Apps. Here’s what he said:
“I think Google Apps is a threat to Microsoft, but not in the form of a frontal assault.
“Offi ce is clearly a more capable product, and (for now) Google doesn’t have an answer for that. However, Google is a real option for users whose document-creation requirements are minimal. If you have a lot of employees who fall into that category, then Google is a threat: even if you buy Offi ce, you may only do it for a subset of your employees, and you won’t be signing something like an Enterprise Agreement that’s a companywide, long-term commitment.
“The trick for Microsoft will be to tell the Offi ce Web Apps story without falling over the edge into Google’s lap. How much can Microsoft sell the virtues of Offi ce Web Apps (lightweight, accessible anywhere), without validating the very similar Google Apps?
“On the other hand, if they minimize the value of Web Apps compared with Offi ce, customers who are interested in simple and inexpensive document collaboration may conclude that the choice is really between Google and the much more expensive Offi ce/SharePoint, because you need SharePoint to get Google-like collaboration and full Offi ce Web Apps functionality.
“I think the Google threat to SharePoint threat is also underplayed quite a bit. SharePoint is not as important to Microsoft as Offi ce, but it does provide most of the collaborative functionality for Offi ce. Google Apps is not as strong overall as SharePoint, but as a collaboration tool it may be good enough for many customers, and far less expensive.”
R C P F E AT U R E | O F F I C E 2 0 1 0
Productivity PlayWhen Microsoft Offi ce 2010 ships this month, the suite faces its most serious challenge yet from lower-cost alternatives. Here are nine reasons why Redmond’s newest version still promises to be a boon to partners. By Jeff rey Schwartz
Two of the most important releases of the 2010 product wave from Redmond are coming this month: Microsoft Offi ce 2010 and SharePoint 2010. They promise to deliver a one-two punch in allowing partners to sell customers on the promise that their enterprises can become more productive and effi cient.
Microsoft says 5 million testers have downloaded the beta of Offi ce 2010. Moreover, Microsoft has recently trained 35,000 solutions providers and VARs on the new features in Offi ce 2010 and has begun rolling out sales readiness programs.
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Partners that have drilled into the Offi ce 2010 beta say they can make the case that customers would benefi t from upgrading to the new release, especially those still running the older Offi ce 2003. But even those with Offi ce 2007 will welcome the unifi ed implementa-tion of the Ribbon, the improved Outlook client and the document collaboration and Web interface the new package off ers.
Since its release six months ago, Windows 7 sales have been impressively strong—already accounting for 10 percent of all OS sales. Hence, the opportunity is ripe to bundle Offi ce 2010 with those new PCs. And as we reported last issue, there’s already pent-up demand for SharePoint 2010 (see “Chomping at the SharePoint Bit,” April 2010). Offi ce 2010 is pivotal in allowing organizations to exploit all the features in SharePoint 2010.
“Now everybody can open up a fi le that’s on a SharePoint server, and coauthor it together,” says Giovanni Mezgec, general manager of the Microsoft Office and Productivity Group. “That means multiple people can work on a document together.”
Omar del Rio, a vice president at Los Angeles-based Gold Certifi ed Partner Sieena, says a number of customers looking to
upgrade to SharePoint Server 2010 are fi nding the new Offi ce release will be necessary to exploit the new collaboration platform’s full capabili-ties. “I think SharePoint 2010 is going to be the enabler of Offi ce 2010 upgrades, because there are many features in SharePoint 2010 that are actually going to work better with Offi ce 2010,” del Rio says.
Microsoft says more than 500 million users have some form of the Offi ce suite. But as the broader economy improves and IT spending picks up, as is expected, the question remains how quickly users will upgrade to Offi ce 2010. Microsoft touts the promise of improved productivity every time it releases an Office upgrade—will users bite this time?
The driver for upgrades is less likely to be productivity enhancements, and more likely to be the fact that the more widely deployed Offi ce 2003 needs better compatibility with the Offi ce 2007 formats, says Directions on Microsoft analyst and RCP columnist Paul DeGroot.
“The Office converters don’t give you full fi delity,” DeGroot says. “The Ribbon may also continue to be a barrier. The productivity hit as people adjust to the new UI stopped some compa-nies from upgrading to Offi ce 2007.”
In addition, DeGroot isn’t convinced the new features in Offi ce 2010 will have enough appeal in their own right to justify costly upgrades right away.
Under the backdrop of that skepticism, partners that have spent the past six months testing the beta of Offi ce 2010 believe customers looking to become more productive will benefit from features such as document sharing and the improved Outlook client.
“Windows 7 has had a massive uptick, unlike anything I’ve seen since Windows 95. But when I talk to customers about Windows 7, they’re even more interested in talking about Offi ce than they were about Windows,” says Carl Mazzanti, a vice president at eMazzanti Technologies, a Gold Certifi ed Partner based in Hoboken, N.J.
Productivity, he says, is the key driver. “If you look at Offi ce as the mainline application that everyone spends the majority of their day in every day, and you can get 5 percent or 10 percent or 20 percent more productivity out of the people you already have, it pays for itself,” Mazzanti explains.
Based on feedback from partners and Microsoft, and on our own observations of Offi ce 2010, here are nine improvements in Offi ce that partners should be discussing with their customers.
“When I show coauthoring to clients, they’re able to discover how it actually will have [return on investment] for them. It will really save time; it will really make customers work better, faster, cheaper.” Erik Thorsell, President, Success Computer Consulting
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IMPROVED OUTLOOK MEANS BETTER MESSAGE MANAGEMENTThe release of Outlook 2010 will pair well with Exchange Server 2010 and Microsoft Office Communications Server (see “Offi ce Calling,” p. 30). Those buried in large volumes of e-mail should appreciate that Outlook 2010 lets users customize their conversations. For example, if a user clicks on a message, all messages related to that thread come into view, even if they’re in diff erent folders. Or a user can limit views of a threat with numerous replies to just one message, which can be expanded if the user chooses.
“I don’t have to read each individual message—they’re all in the last reply anyway,” Mazzanti says. “It will combine anything that’s been sent, anything that’s been received, all into one conversation. It’s a huge time saver.” Use of a feature called Ignore will automati-cally delete all incoming messages tied to that thread.
Outlook 2010 also connects to multiple e-mail accounts and has a wizard feature called Quick Steps that allows individuals to create one-click actions that combine multiple tasks in Outlook. For example, according to Microsoft, a user can create a Quick Step that would automatically delete a message after replying to it.
“Offi ce 2010 provides a new way to categorize e-mail, search e-mail, clean up inboxes … really make life a lot easier for somebody that needs to manage information with e-mail and calendars,” says Microsoft’s Mezgec.
SOCIAL NETWORKING FOR BUSINESS USERS As last month’s SharePoint report revealed, many partners say customers are interested in the upgraded collaboration plat-form for its support for enterprise social networking. Those features will be accessible in Outlook 2010. Outlook users can view messages as well as status updates.
Outlook 2010 has a People Pane that tracks an activity stream of those in their address books, as well as through SharePoint.
But users will also be able to connect to external social networks such as Facebook, LinkedIn, MySpace and Windows Live. The Outlook Social Connector will propagate any update to a contact’s status, employment or other common information to both the social network and Outlook.
COAUTHORING AND DOCUMENT SHARING The ability to share and coauthor documents is enabled in two key ways. One is through support for SharePoint WorkSpace 2010, which is based on the technology previously known as Groove. Microsoft acquired Ray Ozzie’s Groove Networks in 2005. The Groove capability was only off ered in the Enterprise and Ultimate SKUs of Office, but is now available in the Professional Edition, which Microsoft says will be easier to deploy and administer.
Users can download any or all fi les from SharePoint Server and work with them offl ine, and then resynchronize with the server. Likewise, when connected to the server, they can check in and check out documents or fi les.
Users can also share documents via the Web client and through Microsoft Offi ce Live Services.
“When I show coauthoring to clients, they’re able to discover how it actually will have [return on investment] for them,” says Erik Thorsell, president of Success Computer Consulting, a Gold Certifi ed Partner based in Minneapolis. “It will really save time; it will really make customers work better, faster, cheaper.”
RIBBON REVAMPED AND EXTENDEDWhen Microsoft introduced the Ribbon interface in Office 2007, the company only offered it in Word, PowerPoint and Excel. It was not well-received, perhaps because of the half-baked nature in which it was offered throughout the suite. Now it’s nearly ubiquitous throughout Offi ce 2010 and SharePoint, as well as licensed to third-party ISVs.
“I think we got as much pushback from the change in the user interface as we did positive message, initially,” Thorsell says. “Now that we’re done with the change, we can focus on the real features that bring business value to people.”
Microsoft’s Mezgec believes Offi ce 2003 users jumping to the new release will fi nd a much more graceful transition to the Ribbon UI this time around. For one, Microsoft made it easier for users to fi nd commands in the Ribbon through the new Backstage view. Individuals can also customize the way they use the Ribbon by prioritizing the commands they use. Customization can be performed without coding by using the options menu.
“I think SharePoint 2010 is going to be the enabler of Offi ce 2010 upgrades, because there are many features in SharePoint 2010 that are actually going to work better with Offi ce 2010.” Omar del Rio, Vice President, Sieena
Don’t Let the Clouds Pass You By…Channel Strategies for Making the Move
to Cloud Services
IT spending for both SMBs and
enterprises is moving more and more
into the cloud because of the ease of
setup, reduced financial risk and man-
agement costs.
This represents both a challenge and
an opportunity to VARs and Distribu-
tors which are used to providing on-
premise solutions. The challenge will be
adapting to this brave new world.
The opportunity is that unlike the
one-time payments that typically ac-
company on-premise projects such as
hardware deployments, software sales,
network upgrades, and “break-fix” proj-
ects, cloud services can help providers
generate a steady, recurring income
stream, enabling VARs and Distributors
to supplement existing profit sources.
Conversely, VARs and Distributors that
don’t have a cloud strategy are at risk
of losing customers.
The case for developing a practice
focused on delivering cloud services
is compelling, but how should chan-
nel partners go about adding cloud
services to their current offerings?
The first and foremost decision VARs
and Distributors will have to make is
what services to offer, and the most
natural extension will be to offer the
same cloud services that have been
traditionally delivered and managed
on-premise.
The next critical decision to make is
whether to become a reseller for an
existing service provider or to develop
and manage their own cloud offering.
A variety of white label or co-branded
reseller solutions are available, and the
core benefit to this approach is that
there are virtually no capex, opex or
start-up costs because you are lever-
aging another company’s systems and
platforms.
This is an attractive value proposition
for companies that are unsure about
the importance of cloud services to
their business but still want to have an
offering available.
A great example of a white label reseller
would be Apptix (www.apptix.com).
Benefits of buying
your own cloud
delivery platform
If you believe offering cloud servic-
es is important - if not critical - to
the future success of your busi-
ness, a more strategic approach
to getting to market is creating and
supporting your own offering.
While this approach requires a
larger upfront investment than
simply becoming a reseller, it offers
a couple key advantages:
Higher margins and profit: Companies that manage their own
solution, routinely earn operating
margins as high as 50-70 percent,
depending on the services being
offered.
Greater control: IT companies
that sell their own cloud services
are free to determine their own
policies, choose their own product
configurations, add new services
as the market evolves, and set
their own pricing structure.
This also translates into enhanced
branding and control over the
billing relationship.
How to Get Started
Offering Your Own
Cloud Computing
Services
To get started offering your own cloud
computing services like Software-as-a-
Service (SaaS), there are two inter-
twined elements that you need to put
into place. The first is implementing a
service delivery automation solution so
your business can handle key opera-
tional processes such as defining and
managing service or product offerings,
provisioning new customers, and man-
aging your infrastructure. A good auto-
mation solution also supports ordering,
billing, customer relationship manage-
ment, customer self-service, integration
with other systems, and other essential
business functions for service delivery.
Telcos and other service providers have
used service delivery automation solu-
tions for decades – it is the foundation
of any services practice.
The second fundamental element you
will need to put into place to manage
your own cloud services offering is
the actual data center infrastructure.
Namely: servers, storage, routers/
switches, and the IP network. There
are two options to make this happen:
build your own hosting infrastructure or
lease server resources from an infra-
structure provider. While both choices
are viable, they offer different pros and
cons. Self-hosting requires larger initial
capital investments, but offers lower
operating outlays over time leading to
higher long-term profitability.
The reverse is true with using an
infrastructure provider: entry costs are
lower, but long-term operating expens-
es are greater. Which option is right for
your business will vary depending on
your current financial status and your
strategic goals.
Lifecycle functionality: Through a
combination of operations and billing
automation (POA and PBA), Parallels
Automation streamlines every portion
of the cloud services lifecycle, from
provisioning and customer service
to server monitoring and service
management as illustrated.
Implementation services: Parallels
professional services offers consulta-
tive advice on which cloud services
to offer for a particular company and
support the deployment of serv-
ers and the operating environment
plus system configuration, including
customizing a branded control panel,
customer storefront and service
plans.
Parallels
Automation
in Action
We are very happy that
Thynx can provide the ser-
vices we need to offer our
value-added partners access
to the SaaS market. This is a
strategic decision to be part
of this growing market and to
enable our channel to com-
plete their product portfolio
while ensuring Tech Data re-
mains as their preferred sup-
plier. Our new brand “Fusyx”
offers Software as a Service
to our partners.
– Pieter van Hertbruggen,
Division Manager Azlan at Tech Data
We are pleased to be able to
offer our on-demand applica-
tions utilizing Parallels tech-
nology. Over time, we feel
that the flexibility offered will
allow us to scale our busi-
ness and add new services
efficiently creating value for
our customers and partners.
– Kent Erickson,
President and CEO of Pointivity
About Parallels
Parallels has been providing service
delivery automation solutions for over
a decade. The company currently has:
• 5,000 service provider customers
• 700 certified partners
including Tech Data Belgium,
Apptix, Pointivity, Go Daddy,
Rackspace, and ThePlanet
• 300,000 servers and 2M desktops
using its software
• Over 10 million end customers
in 125 countries
To learn more about Parallels
Automation, contact us at:
425-282-1788 or
To download a complimentary
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www.parallels.com/rcp.
Introduction to
Parallels Automation
Parallels Automation is a powerful
service delivery automation solution so-
lution for companies looking to launch
or expand cloud services. By deploy-
ing Parallels Automation, VARs and
Distributors can enter the cloud space
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ferentiating their service offerings and
attracting customers while positioning
themselves for maximum profitability.
Services
offered: Parallels Automation offers
a comprehensive suite of
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• Shared and dedicated
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aged and unmanaged)
• Microsoft Exchange
• Microsoft OCS
• Microsoft Sharepoint
• Microsoft Dynamics
• OpenXChange
• Other hosted SaaS
including web conferenc-
ing, customer relationship
management, content
management, market-
ing, project management,
hosted security, virtual
desktops and cloud
compute
• Virtually any third party
application or service
through an extensible
architecture
Redmond Channel Partner MAY 2010 RCPmag.com30
R C P F E AT U R E | O F F I C E 2 0 1 0
New Offi ce Communications Server (OCS) planned for year-end release promises to address defi ciencies in existing OCS off erings.
The 2010 version of Microsoft Office, due out this month, will make it easier for individuals to collaborate and communicate. But Redmond is also hoping the new Outlook and Communicator clients will help replace the telephone—or at least tie more closely to it. Microsoft hopes to achieve this goal with a new release of its Offi ce Communications Server (OCS) code-named “Communications Server 14,” which is slated to ship later this year.
Microsoft has long evangelized its goal of creating unifi ed communications (UC) with Offi ce powered by Outlook at the core. It has released several versions of OCS, designed to let Offi ce interface with business telephone systems including private branch exchanges (PBXes) and Voice over Internet Protocol (VoIP) services.
More than 100 million Offi ce users are connected to OCS, said Gurdeep Singh Pall, corporate VP of the Microsoft Offi ce Communications Group, speaking in a keynote address at the recent VoiceCon show in Orlando.
Still, usage has been scattered and very few users have replaced their existing PBXes with OCS, says IDC analyst Jonathan Edwards. “OCS hasn’t been enterprise-ready for the majority of organizations,” Edwards explains. He adds that it lacks key features such as E911 support, caller admission control and branch-offi ce resiliency, all showstoppers for OCS as an enterprise communications platform.
Communications Server 14 promises to address those defi ciencies. Pall took the wraps off Communications Server 14 during his VoiceCon keynote. Though Microsoft hasn’t offi cially said what it will be called, it’s widely expected to be called Offi ce Communications Server 2010, in keeping with the naming of the rest of the products released in the current wave.
Communications Server 14 will off er location-based presence support, meaning the interface will allow others to know if someone is in their offi ce, mobile or in some other setting.
A user’s location can be detected based on the network’s subnet—or wireless access point, if mobile—and published, based on policies selected. “This system is designed to work from anywhere. It’s designed to be simple both from an end-user perspective and from an IT-management perspective, and the system is designed to be cost-eff ective,” Pall said.
In the demo, Pall showcased a feature that will allow individuals to use Communicator to utilize new SharePoint 2010 search capabilities to fi nd users with specifi c knowledge or skills. Communications Server 14 will also support 911 capabilities, which will detect a caller’s location, thereby directing a caller to the proper dispatch site. The new Offi ce Communicator client will also support social networking and activity streams that are being added to the forthcoming Offi ce and SharePoint 2010 releases.
Pall also said the new release will be more extensible and interoperable than prior releases, though company offi cials declined to elaborate. The company made available the Communications Server 14 APIs at the Professional Developers Conference in November. Pall predicted that within three years, 75 percent of applications would be enabled to have UC capabilities embedded in them.
Offi ce Communicator will also be better suited for branch offi ces, Pall said. By “branch offi ce survivability,” Microsoft means that if
a connection between a remote location and headquarters is severed, the branch will still have communications capability.
Several partners also say they’re developing products that will support Communications Server 14’s “branch survivability” capability, including Audio Codecs, Ferrari Electronics AG, Dialogic Corp. and Hewlett-Packard Co.
HP and Microsoft agreed last year to work together to tie together the HP ProCurve networking switches with Offi ce Communications Server. At VoiceCon, HP said its Survivable Branch Communication zl Module will work to enable the Microsoft Communications Server 14 to work with HP’s ProCurve 8200zl and 5400zl switches.
Also, Polycom Inc., a leading supplier of videoconferencing systems and phone systems, said it plans to off er a number of new audio and video phones that work with Communications Server 14 when it ships.
Still, Microsoft may have a tough time convincing customers to swap out their tried-and-true PBXes, no matter how much it argues that the systems are proprietary and costly.
“It’s not going to take over the market overnight,” IDC’s Edwards says, adding that many organizations will want to continue to leverage their infrastructure. A lot of organizations already are closely tied with incumbent telephony providers such as Cisco Systems Inc., Avaya Inc., Nortel Networks and NEC Corp., among others.
“It’s going to take some time for OCS to really be taken seriously as a replacement for those trusted providers,” Edwards says.
“With this new iteration, Microsoft has made that statement to the market, and there are signifi cant advantages of going that route [OCS as a complete PBX replacement]. If you’re a pure Microsoft shop, for sure—but we don’t expect it to start competing at a request-for-proposal level with the big three that have been there. It’s going to be targeted at a specifi c customer base of theirs and be part of a UC and collaboration type of environment.” —J.S.
Gurdeep Singh Pall, corporate VP of the Microsoft Offi ce Communications Group, said the new Offi ce Communications Server
“is designed to work from anywhere.”
OFFICE CALLING
RCPmag.com MAY 2010 Redmond Channel Partner 31
BUILT-IN VIDEO SUPPORTEmbedding videos into Word and PowerPoint presentations has always required the use of third-party tools and resulted in extremely large fi les. Offi ce 2010 users will welcome the ability to edit and embed videos natively within the fi le.
“When I talk to clients about that, their eyes light up—they say problem solved,” Thorsell says.
“As multimedia has taken a foothold in the business market, Offi ce 2010 treats video and high-quality multimedia as a fi rst-class citizen,” Mazzanti says. “It realizes the importance of audio, video and the like and treats it very well.” In addition to making it easier to edit and embed video within Offi ce, the content tends to fl ow more seamlessly and uses compression to make the fi le sizes more reasonable, Microsoft says.
SELF-SERVICE BI IN EXCEL While Office is clearly emerging as the rich-client front-end component of SharePoint Server, the new release of Excel promises to step up to enable those who deploy SQL Server.
“You can open huge data sets in Excel 2010,” says del Rio. “When you’re working with hundreds of thousands of records, that really helps.”
A new feature called Sparklines provides concise visualization of these massive data sets in small charts within worksheets.
“Sparklines help bring meaning and context to numbers being reported and, unlike a chart, are meant to be embedded into what they’re describing,” writes Sam Radakovitz, a program manager on the Microsoft Excel team, in a blog posting.
Excel 2010 also introduces Slicers, which Microsoft describes as visual controls that let users fi lter these large data sets. Another much-awaited feature coming to Excel is PowerPivot, formerly known as “Project Gemini.” Excel 2010 can connect to multiple data sources and use the PowerPivot compression and data-caching engine to rapidly create dashboards.
OFFICE WEB APPS With the release of Offi ce 2010, Microsoft is letting users create and edit Word, Excel, PowerPoint and OneNote documents anywhere from a Web browser. Offi ce Web Apps will be avail-able in two forms. For consumers and small business customers, Microsoft is offering Office Web Apps as a free service under Windows Live, where fi les can be saved to its SkyDrive service.
For enterprise customers, Microsoft is making Offi ce Web Apps available through SharePoint Foundation 2010 or SharePoint 2010. When installing Offi ce Web Apps, Microsoft says users should select Offi ce Web Apps Services from the listing of SharePoint Services and the Offi ce Web. Word Viewing Service, PowerPoint Service and Excel Calculation Services run in conjunction with SharePoint Services and integrate with the SharePoint enterprise content management library, allowing access to any enterprise documents from a browser. Documents are rendered in HTML and JavaScript from the browser; if it has Microsoft Silverlight runtime, certain images might also be rendered in XAML.
MOBILE CLIENTPerhaps the least-clear benefi t to partners in the near term is the capabilities in the new Mobile Office Client. It provides richer ability to read and edit documents in Word, Excel and PowerPoint with an Outlook client that brings many key features from the PC version to the phone, such as the Conversations View. In addition to integrating with Exchange Server, the new client will support versions of Word, Excel, PowerPoint and OneNote.
Included is SharePoint Workspace Mobile 2010, which lets users browse document libraries and edit documents using Microsoft Word, Excel or PowerPoint Mobile 2010. Initially, Mobile Office Client will be supported on the forthcoming Windows Phone 7 Series, due out later this year, and Nokia phones.
EASIER TO BUYMicrosoft has dropped the number of SKUs for business customers from four to two, while maintaining three versions for consumers. Perhaps more notably, many customers may already be paying for their Offi ce 2010 license through vari-ous programs such as Microsoft Software Assurance or the Microsoft Open Value Subscription program for small and midsize enterprises with up to 750 PCs.
Some 80 percent of Thorsell’s customers now subscribe to that option, up from 0 percent two years ago. “Instead of having to come up with all of the cash up front, it makes the decision easier to make,” he says. •
Jeff rey Schwartz ([email protected]) is executive editor of Redmond Channel Partner magazine.
“Offi ce 2010 provides a new way to categorize e-mail, search e-mail, clean up inboxes … really make life a lot easier for somebody that needs to manage information with e-mail and calendars.” Giovanni Mezgec, General Manager, Offi ce and Productivity Group, Microsoft
Redmond Channel Partner MAY 2010 RCPmag.com32
R C P F E AT U R E | M P N S U B S C R I P T I O N S
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ShakingSub
As part of the Microsoft Partner Network
overhaul, Microsoft is revamping the
popular Action Pack program this month.
By Scott Bekker
RCPmag.com MAY 2010 Redmond Channel Partner 33
gg The rollout of the Microsoft Partner Network (MPN) has been a long process. This month, Microsoft will formally launch most of the new partner Competencies that partner executives have been talking about for more than a year. In October, many of the Advanced Competencies will go into eff ect. One area that’s been a question mark—despite all the talk about social networking, partnering goals, program levels and landing places—is the subscription tier of the MPN.
Subscriptions are a question no longer. Microsoft at last clarifi ed its intentions in late March, with changes going into eff ect at the end of this month. At a high level, Microsoft will retire the current Microsoft Action Pack Subscription (MAPS), a massive program with a huge and mostly adoring fan base, and retire the much smaller but also highly regarded Empower for ISV programs. Launching in their places on May 24 will be two new versions of the Action Pack, the Action Pack Solution Provider subscription and the Action Pack Development and Design subscription. Two existing programs for startup companies—BizSpark and WebsiteSpark—will also continue under the subscriptions umbrella of the MPN.
g upbscriptions
Redmond Channel Partner MAY 2010 RCPmag.com34
R C P F E AT U R E | M P N S U B S C R I P T I O N S
Julie Bennani, general manager of the MPN, unveiled the changes in a series of short webcasts on the Microsoft Partner Portal.
“We want to make sure that we’re very crisp and clear on what part-ners need to do next, and that’s the biggest focus right now,” Bennani said in an interview. “We’re revamping our subscription space, which is a very large community of partners.”
The size of that community would make any transition tricky. According to Microsoft, there are about 150,000 partner subscrib-ers worldwide. That accounts for between more than a third and just under half of all partners enrolled in the MPN, based upon the program’s range of 300,000-400,000 partners over the last few years.
MAPS is a quarterly bundle of trial software for internal use by Registered Members of the Microsoft Partner Program. Since November 2007, partners have also had to pass an exam to receive the Action Pack, a move instituted to reduce abuse of the deal. For example, in November 2005, Microsoft fi led seven lawsuits against members of its partner community, accusing them of improperly reselling MAPS software. Last June, the company further evolved MAPS by making distribution digital by default, although partners could pay extra to receive physical media.
Despite the risk of illegal software distribution and the potential loss of software license revenues from some 150,000 prospective partners and customers, Microsoft obviously continues to see benefi ts to keeping partners close in a competitive world through all of the subscription programs.
“The intent of the subscription space in MPN is about retention of partners that are working with us and helping them develop their businesses. They’re not quite ready to market themselves,” Bennani said. “Maybe they don’t have enough customer experience, depth of technical expertise, etc., to be in the competencies, but we want them with us. So it’s a very big and important space for us—and a good investment. They’re very important to us. They do a lot of great work locally with customers, particularly in the SMB space.”
ACTION PACK SOLUTION PROVIDERIt’s likely that the bulk of Action Pack subscribers will end up in the new Action Pack Solution Provider subscription, which begins May 24.
Action Pack Solution Provider is built on Microsoft’s existing TechNet subscription program for IT professionals. The core of the program, which corresponds most directly to the digital software distribution under the old MAPS program, will be a special TechNet for Microsoft Action Pack Solution Providers Subscription or TechNet for Action Pack. (That was the name at press time, although precise naming of the TechNet subscription seemed to be in fl ux as of early April.) Elsewhere on Microsoft’s site, it was listed as TechNet Professional (online Partner Edition). The TechNet subscription is also supposed to include access to the Microsoft TechNet Library and the TechNet community Managed Forums.
Action Pack Solution Provider will also include visibility in Microsoft’s two main partner directories for customers, PinPoint and Solution Finder; opportunities to recruit students; online sales skills training; and access to quarterly support webinars.
ACTION PACK DEVELOPMENT AND DESIGNJust as Action Pack Solution Provider is based on a TechNet subscription, Action Pack Development and Design will be founded on a Microsoft Developer Network (MSDN) subscription.
Benefi ts under that program consist of:✱ Three MSDN for Microsoft Action Pack Development and
Design subscriptions✱ 10 hours of phone-based technical design and development
support✱ Access to quarterly recorded technical support webinars ✱ Technical and sales training focused on development
and design✱ Access to community peer groups✱ Visibility in Microsoft partner directories for customersTo qualify for the Action Pack Development and Design subscrip-
tion, partners will have to enroll in the MPN, have fewer than 100 employees and pass an online assessment every two years.
“This announcement should be especially exciting for partners who’ve reached their two-year limit in the Empower for ISVs program, which we’re retiring,” Bennani said in her March webcast.
“We want to make sure that we’re very crisp and clear on what partners need to do next, and that’s the biggest focus right now.”Julie Bennani, General Manager, Microsoft Partner Network
RCPmag.com MAY 2010 Redmond Channel Partner 35
EMPOWER FOR ISVS RETIREDUnlike the retiring MAPS, which is splitting into two very similar programs, Empower for ISVs is not being directly replaced by anything.
Empower for ISVs was a $375 (U.S. price) per-year, two-year program for micro, small or midsize ISVs that Microsoft described as being in the “intensive growth phase.” Microsoft’s main requirement was that Empower participants commit to developing one packaged software solution for sale that would support a major Microsoft software product, such as Windows 7 or SQL Server 2008. Only Registered Members were eligible—no Certifi ed Partners or Gold Certifi ed Partners could get in on the low-cost arrangement.
Benefi ts included one license of Microsoft Visual Studio 2008 Professional Edition with an MSDN Premium subscription, fi ve licenses for Microsoft Visual Studio 2008 Professional Edition, fi ve internal-use licenses for Windows 7 Professional and Microsoft Offi ce 2007 Professional, and a server license and fi ve CALs for Windows Server 2008 R2, Exchange Server 2010, SQL Server 2008 and Offi ce SharePoint Server 2007. The program also came with 10 hours of telephone-based professional consulting on software development advice, best-practices recommendations,
code samples and limited reviews of technology, architecture or application design.
ISVs interested in the old Empower program will still be able to sign up until May 21. After that date, ISVs will need to transition to one of the other Microsoft subscription programs or prepare to make the jump up to the ISV/Software Solutions Competency if they choose to remain in the MPN and need development software. Companies that signed up for Empower last year can renew for their second year, but only if they’re within 90 days of their fi rst-year expiration date, according to information on the Microsoft Partner Portal.
Development and startup companies have a few other options than the developer and design-focused Action Pack for now, even with Empower for ISVs going away.
BIZSPARKAnother major component of the MPN subscription program is BizSpark, which launched in November 2008. The startup-focused program requires that participants be privately held, in business for less than three years at the time of enrollment and have less than $1 million in annual revenue. The main require-ment is that a BizSpark candidate company be developing a
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R C P F E AT U R E | M P N S U B S C R I P T I O N S
Software plus Services solution on any platform. To enter the program, companies must be nominated by one of the govern-ment agencies, venture capital firms or other pre-qualified companies within the Microsoft BizSpark network.
Like the other subscriptions in the MPN, BizSpark comes with a lot of access to software during the three years that companies are eligible to participate. The program brings rights for the entire team, starting at up to 25 employees, to all the software included in the Visual Studio Team System (VSTS) Team Suite with an MSDN Premium subscrip-tion, Expression Studio and VSTS Team Foundation Server Standard Edition. There are some internal-use rights and support incidents that are normally included in MSDN Premium subscriptions that aren’t off ered to BizSpark participants.
WEBSITESPARKA newer Microsoft program, related to BizSpark and now an element of the MPN subscription program, is WebsiteSpark, which formally launched in September 2009. While BizSpark is aimed at startups, WebsiteSpark is for professional services fi rms that off er Web design and development services. Details on this market are hard to come by, but a few years ago, Microsoft was talking about potentially adding tens of thousands of so-called Digital Agencies to the Microsoft channel, and WebsiteSpark would be a logical landing zone for that community. Eventually, those partners could graduate into the new Digital Agency Competency that Microsoft recently created within the MPN.
Eligibility requirements for WebsiteSpark participation are that the agency have no more than 10 employees, and the program is open to sole proprietors. Requirements are simply to join the MPN and develop and deploy at least one new Web site on Windows Server within six months.
PRICING REMAINS IN A TIGHT RANGEThe pricing on both the BizSpark and WebsiteSpark remains free up front with a fee of $100 upon leaving the program, making the three-year programs extremely cheap. Companies that leave the WebsiteSpark program in the first six months— in other words, prior to the requirement of getting a Web site up on Windows Server—pay no fee if they notify Microsoft that they’re withdrawing.
Where the MPN subscription shakeup begins to aff ect pricing is in the Action Pack Solution Provider, but again, the changes are relatively slight and something of a mixed bag. Microsoft currently charges $299 for MAPS in the United States, and charges $498 total for those partners who still want the software shipped on physical media rather than have it delivered digi-tally. The price for the Action Pack Solution Provider subscription will jump about 10 percent for digital subscribers to about $329 in the United States. Prices vary internationally. Those looking for physical media will see some savings, with the total price dropping to $429 in the United States.
Prices jump for those looking at the Action Pack on the developer side. The Action Pack Development and Design subscription will cost $429 per year for digital delivery and $529 with physical media shipments. To ease the transition, the Microsoft Worldwide Partner Group launched a discount promo-tion for the Action Pack Development and Design subscription in late March on Global Partner Experience Lead Eric Ligman’s blog. The offering amounts to a 15 percent discount on the subscription price, which would bring the U.S. pre-tax price down to about $365 for the digital-only version. Microsoft will accept requests for the off er until May 23, then deliver a single-use promotion code to qualifi ed applicants the week of May 24.
“Microsoft appears to be adding some benefi ts to the standard Action Pack, like TechNet subscriptions and directory listings, and doing some kind of MSDN-lite thing for small developers,” says Paul DeGroot, an analyst at Directions on Microsoft. “I’d say these are good moves—a lot of development is done by small shops, and this could be a lower-cost option than MSDN.”
However, DeGroot says, it could potentially cannibalize MSDN. “Even then, that’s not necessarily a bad thing,” he explains. “Microsoft has always been quite generous with partners and developers and it appears to be doubling down on that bet.”
In all, Microsoft seems to be trying to make the transition from MAPS to Action Pack Solution Provider relatively smooth and straightforward for the traditional solution provider partners who rely on the package to power their Microsoft-based businesses. At the same time, the majority of the programs and the eff orts seem to be on the development and new business model side. That leaves the subscription area of the MPN focused on a new generation of Microsoft partners—those trying to build solutions that leave the infrastructure in the cloud.
Indeed, Bennani indicated more programs may be coming, and she identified marketing agencies as likely recipients. “In the future, we may see a need to do an additional subscription or two to help activate those new communities with other business models,” she said. •
Scott Bekker ([email protected]) is editor in chief of Redmond Channel Partner magazine.
“Microsoft has always been quite generous with partners and developers and it appears to be doubling down on that bet.” Paul DeGroot, Analyst, Directions on Microsoft
RCPmag.com MAY 2010 Redmond Channel Partner 37
Applications managed services (AMS) has been gaining a lot of traction lately. If it isn’t top-of-mind for you, it should be,
because it could well be the next profitable frontier for IT services firms targeting the small- and mid-market space.
What I’m talking about is applications managed services and not infrastructure managed services. The distinction between the two is akin to the distinction between the skeleton (infrastructure) and the circulatory, nervous or respira-tory organ systems (applications) that make up human anatomy.
Much as organ systems keep a body functioning, applications keep a corpora-tion going. Keeping those applications nourished, protected and maintained is where corporate America is throwing buckets of money.
Customers’ main pain points now are shrinking IT budgets and the growing complexity of IT infrastructures. The preferred solutions to these conundrums are outsourcing and managed services.
AMS is the magical elixir that IT services executives have to embrace to benefi t from this trend. Being the best at AMS is a surefi re path to growth and profi tability. Winning the trust and confi -dence of companies looking to outsource requires specialization. [For more on specialization, see Harvath’s March 2010 column, “A Year for Leadership.”—Ed.]
Doing this right is a boon for you and your clients. For you, it’s the prospect of
higher earnings through new revenue derived by having the specialized expertise that allows you to attract those companies whose benefi t is higher earnings derived by reducing costs associated with practices not in their core competency.
When evaluating companies’ readiness to take advantage of the trend in AMS, we stack IT services fi rms into three broad classifi cations according to a specifi c set of metrics: market leader, follower or laggard.
In our view, market leaders are focused both on a market and its associated technol-ogy, are ranked fi rst or second in that market, and have a revenue breakdown of 20 percent advisory services, 50 percent technical services and 30 percent AMS. A good goal for a market leader is to increase its AMS revenue allocation to 40 percent.
A laggard, on the other hand, would have a 100 percent technical focus, be a generalist and have an “anything for a buck” attitude toward revenue allocation. [Go to RCPmag.com/Harvath0510 for a chart that will help you determine where your fi rm stands according to several straightforward metrics.—Ed.]
Building an AMS PracticeSo, what will it take to build your AMS business? Right off the bat, you’ll have to know that it’s not an insignifi cant investment getting an AMS operation up and running.
Unlike the traditional route to profes-sional services, in which you can sell ahead and then hire to the opportunities, in AMS you’ll have to start with a much higher fi xed cost. The service has to be in place at the point-of-sale, because once you sell it, it’ll be too late to build the infrastructure.
In our experience, the cost of this invest-ment is in the neighborhood of 2.5 percent of your revenue to model this program over a six-month period. It’s another 5 percent of revenue to staff the program and roll it out the fi rst year. It’ll take six months of planning and one year of implementation to get the business unit rolling and profi table. That’s the hard news.
The easier news is that once you get this up and running, you can reasonably expect a one-year return on investment once the unit is profi table, after which you can realize gross margin contributions for your AMS off erings to be about 15 percent higher than your core off erings, which is why the attraction is there.
We have a pretty good handle on the mechanics of building an AMS off ering, and a thorough grasp of the issues with which you’ll have to contend. Oddly, for us, that’s the easy part. Where we fi nd ourselves working the hardest is acting as an AMS lightning rod, getting executives to get on this bandwagon. We see too many executives seduced by the short-term appeal of low-hanging fruit who have not yet committed themselves to giving AMS the priority it deserves.
That’s too bad. •
Mike Harvath is CEO of Revenue Rocket Consulting Group, an IT services growth consultancy. Contact him at [email protected].
ON GROW TH B Y M I K E H A R V A T H
Get on the AMS Bandwagon
VIEW THIS COLUMN ONLINE AT RCPMAG.COM FOR A CHART SHOWING WHERE YOUR FIRM RANKS ON AMS
RCPMAG.COM
Customers’ main pain points now are shrinking IT budgets and the growing complexity of IT infrastructures. The preferred solutions to these conundrums are outsourcing and managed services.
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Next Time: How big of a company can I aff ord to buy?
Redmond Channel Partner MAY 2010 RCPmag.com38
My theme for the last several months was how you can differentiate your firm from the masses of other
resellers in the world. Hopefully you’ve been able to implement some of the strategies. As we head into the middle of the year, I’ll be shifting gears to discuss strategies for accelerating growth in your vendor relationships. This month, I’ll talk about marketing strategies, followed next month by sales strategies. Then I’ll wrap up this mini-series with measurement and management strate-gies you can employ with your vendors.
Spring has fi nally come to the United States, and after one of the worst winters in recent memory, it’s a welcome relief. Many families do what mine does during this time of year—spring cleaning. We dust off some things and spruce up others. One of the tasks my children particularly enjoy is planting fl owers in the garden.
Resellers can also do some planting with their vendors during this time of year. A few well-executed, joint-marketing tactics in the second quarter will result in a bountiful harvest later in the year.
Know the FertilizerBefore you can market eff ectively with a vendor, you need to understand your own strengths. In earlier columns, I talked about ways to diff erentiate yourself
through marketing. By this time of year, you should have a good feel for what unique marketing tactics are working which ones aren’t. Pick the tactics that are getting traction and do more of them.
If you have a garden and a certain fertilizer seems to really help the plants, keep using it. A great example of this is a reseller who recently started writing articles around a certain technology. It had never done this before but had been increasingly frustrated with the low-quality leads it was getting from webinars. In a very short time, user groups and bloggers started to identify this reseller as the expert on the technol-ogy. Having marketing techniques that are already working for you will help you bring something tangible to the table in discussions with your vendors.
Water the GardenHave you signed up with a new vendor but not yet seen much traction with the relationship? Don’t dust off and resend the original press release announcing the partnership. It’s time to get tactical with the relationship. In order to make things really work, both parties must roll up their sleeves. Recently, a relation-ship a client has with a vendor wasn’t going in the direction that either party wanted. What I suggested was to have a meeting so that both parties could get
extremely tactical. We shifted from the “honeymoon” period into what I call the “watering the garden” period.
Activities became incredibly focused. The companies shared target customer lists and put together a defi nitive action plan for calling the names on the lists. Both parties were thrilled that the relationship was fi nally moving in the right direction. The tactic here was quite simple, and often this is what needs to be done to get things back on the right track. No fancy chemical fertilizers or organic methods were needed here, just plain water.
Weed out Old WaysAs you examine the older vendor relationships in your portfolio, it may be time to weed out the old way of doing things. Take initiative and visit the vendor yourself, instead of waiting for him to visit you. Do a lunch and learn with the vendor’s sales people, instead of waiting for them to do a lunch and learn with you.
Even consider doing a press release highlighting a current piece of good news on the vendor. For example, a client of mine recently had some major news hit the wires. An article appeared in USA Today, referencing this client. Some progressive resellers within the client’s network put together press releases around this news, even though they weren’t mentioned themselves. The “old way” would have been to wait for the vendor to do a press release about both companies.
Weed out the old ways of doing things, and make room for something new to blossom. •
Keith Lubner is managing partner of Channel Consulting Corp., a global consultingorganization focused on channel strategy, design, enablement, outsourcing and training for growing companies. Reach him at klubnerchannelconsultingcorp.com.
CHANNEL CALL B Y K E I T H L U B N E R
With Vendors, Fertilize, Water and Weed
VISIT RCPMAG.COM FOR LUBNER’S ADVICE ON DIFFERENTIATING YOUR FIRM
RCPMAG.COM
Take initiative and visit the vendor yourself, instead of waiting for him to visit you.
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Next Time: Selling Strategies
Dan LaBiancaAssociate Publisher818-674-3416 ph509-267-8965 [email protected]
Advertising Sales
RCPmag.com MAY 2010 Redmond Channel Partner 39
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Microsoft
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Redmond Channel Partner ✱ May 2010
AD INDEX
Advertiser Page URLCablesys 35 www.cablesys.com
Citrix Systems C3 www.citrix.com
Dell C2, 1, C4 www.dell.com
Eaton Corporation 2 www.eaton.com
Lenovo USA 5 www.lenovo.com
Parallels 28, 29 www.parallels.com
Redmond Channel Partner 11, 13, 17 RCPmag.com
Zenith Infotech 6, 7 www.zenithinfotech.com
EDITORIAL INDEXAdobe Systems Inc. 15 www.adobe.com
Apple Inc. 15 www.apple.com
ASAP Automation Inc. 16 www.asapauto.com
Cabinet NG 16 www.cabinetng.com
Citrix Systems Inc. 15 www.citrix.com
Clearway Technology Partners 23, 24 www.clearwaypartners.com
Cloud Sherpas 22-24 www.cloudsherpas.com
DCS NetLink 12 www.dcsnetlink.com
eMazzanti Technologies 26, 27, 31 www.emazzanti.net
Google Inc. 16, 18-24, 40 www.google.com
groupSpark 40 www.groupspark.com
Heartland Technology Group 12 www.htgmembers.com
Hewlett-Packard Co. 15 www.hp.com
Intel Corp. 14 www.intel.com
Intermedia 23, 40 www.intermedia.net
IntraLinks Inc. 16 www.intralinks.com
MLS Data Management Solutions 16 www.mlsc.com
OpenOffi ce.org 22 www.openoffi ce.org
Oracle Corp. 22 www.oracle.com
Parallels 22, 24 www.parallels.com
Rackspace 40 www.rackspace.com
SADA Systems Inc. 23, 24 www.sadasystems.com
SecQuorum 16 www.secquorum.com
Sieena 26, 31 www.sieena.com
Success Computer Consulting 23, 24, 26, 27 www.sccnet.com
Sun Microsystems Inc. 22 www.sun.com
twentysix New York 15 www.26ny.com
Media Kits:Direct your Media Kit requests toMatt Morollo, VP Publishing:Phone: 508-532-1418Fax: 508-875-6622E-mail: [email protected]
Redmond Channel Partner MAY 2010 RCPmag.com40
When Microsoft wades into a market with an inex-pensive, global solution with the weight of its vast
partner community behind it, everyone else often heads for cover.
There’s a problem when you’re Microsoft, however. Some of those
“everyone elses” are Microsoft partners, and kicking them out of the market could reduce the market share gains from getting into the market directly.
I’m referring specifi cally to hosted servers, like Exchange and SharePoint Online, where Microsoft wants to meet the threat from competitors like Google. Why is Microsoft competing with its partners? Partners do have a role in hosted servers, but prices are low, partner commissions are consequently sparse, and Microsoft owns the customer relationship.
There are good reasons for Microsoft to get involved directly. First, large companies want to work with a large hoster, someone with deep pockets who can aff ord to provide the continuity they require. Now, this may be an illusion—the Microsoft service uptime may be no better than that of many smaller hosters—but it’s an illusion that large organizations like to have, about both themselves and their business partners.
Second, redundancy is important, and with more than a dozen huge data centers
around the world, Microsoft off ers that. It’s still not enough in some cases—nota-bly, many government agencies and some public corporations will not permit their data to be hosted outside national boundaries, which dictates that a hoster needs at least two data centers in a country to off er both redundancy and location. But smaller players who are big fi sh in their local ponds may be in a better position to do that than a company like Microsoft—they may own most of the rare data center operations talent in a small country.
Third, having a software vendor back the hosted service puts responsibility clearly on the shoulders of one party. If Microsoft-hosted products fail to perform in a Microsoft-hosted data center, we know who owns the problem. However, that doesn’t guarantee that there won’t be problems, or that they’ll be quickly resolved. Just ask one of the partners who banged futilely on the Microsoft-built and Microsoft-hosted Volume Licensing Service Center for several months last winter.
Who is most likely to be aff ected by Microsoft’s eff orts to gain market share for hosted services? I’d argue that the company may gain more market share at the expense of its partners than at the expense of a competitor like Google.
Take a company like Intermedia, which says it has 375,000 hosted Exchange seats and 5,000 partners. Microsoft claims
1 million hosted Exchange seats and 7,000 partners, but a lot of those seats are for the Dedicated service, which isn’t sold through broad partner channels and requires a minimum of 5,000 seats. It’s quite possible that in the small to midsize business (SMB) market, Intermedia and other large hosters (groupSpark and Rackspace, for example) host more Exchange seats than Microsoft does. They also off er more generous partner margins (as much as 40 percent, compared to 6 percent to 18 percent from Microsoft) and preserve the partner-customer relation-ship with partner-branding opportunities.
One of Intermedia’s responses to compe-tition from Microsoft has been to expand, with off erings like Unison, which includes the services that Microsoft hosts—e-mail (including mobile synchronization), chat, presence, contacts and calendars—but also telephony, via a soft PBX on the customer’s premises, and an Outlook-like client on each desktop. It costs more than Microsoft online services, but it also provides more. Microsoft has yet to venture into telephony, an area where small businesses pay some of their largest bills.
The catch: Unison runs on Linux.That may be part of the survival story
for Microsoft hosting partners: a lower cost but higher value solution that doesn’t involve monthly fees to Microsoft. But it provides no net benefi t for Microsoft. The risk Microsoft is taking by competing aggressively in hosted services is that its own partner channel may be collateral damage, costing the company one or two seats for every one or two that it gains. •
Paul DeGroot is a senior analyst with Directions on Microsoft, a Kirkland, Wash.-based independent research fi rm focused exclusively on Microsoft strategies and technology. Reach him at [email protected].
DIRECTIONS B Y P A U L D E G R O O T
Competing and Cannibalizing
VISIT RCPMAG.COM FOR MORE OF DEGROOT’S THOUGHTS ON MICROSOFT PARTNERS AND THE CLOUD
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Partners do have a role in hosted servers, but prices are low, partner commissions are consequently sparse, and Microsoft owns the customer relationship.
For more on cloud competition, see p. 18
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