Friday, July 11, 2008

Are you ready to sell online services from Microsoft?

Those people who haven’t had their heads buried in the sand recently will know that Microsoft is now offering hosted services. More information has recently been announced but here’s what I see as the salient points.

 

Microsoft is introducing Exchange Online Deskless Worker and SharePoint Online Deskless Worker. These new offerings are designed to meet the needs of deskless workers, those people who typically spend a small portion of their workday using a computer but still need to communicate and collaborate with colleagues and partners.

A Deskless Worker Suite, including Exchange Online Deskless Worker and SharePoint Online Deskless Worker, will be available for $3 (U.S.) per user, per month. Customers can also subscribe to each service independently. Exchange Online Deskless Worker will provide e-mail, calendars, global address lists, anti-virus and anti-spam filters, as well as Outlook Web Access Light for access to company e-mail. SharePoint Online Deskless Worker will provide easy access to SharePoint portal and team sites and search functionality, giving employees read-only access to important information such as company policies, training and benefits.

For information workers, businesses can provide an online business productivity suite of Microsoft’s enterprise-class communication and collaboration software as a subscription service.

The suite includes the following:

Exchange Online for desktop and mobile e-mail and calendars with Outlook Web Access and full Office Outlook integration

Office SharePoint Online for portals, collaboration, search and customized team sites

Office Communications Online for instant messaging and presence

Office Live Meeting for Web conferencing and videoconferencing

The suite will be available for $15 per user, per month (U.S.). Customers can also subscribe to each service independently.

 

…..

 

Partners that sell the Microsoft Business Productivity Online Suite, Deskless Worker Suite or any of their components receive 12 percent of the first-year contract price and 6 percent of the subscription fee ongoing. This can translate into 18 percent of the subscription value in the first year of the partner’s relationship with the customer.

 

Now is that easy money? If you already sell hardware and software to clients as a primary part of your business have a think about how much impact this may have. Firstly, there is no more back end hardware to sell (i.e. servers) and also since all a workstation has to do now is run a browser there won’t be the need for upgrades. So as I see it bye, bye hardware commissions. Ok, let’s say you have 20 users who go with the suite option for 12 months (=$3,600) of which a reseller gets 18% (= $648). To me that doesn’t look like much compared to what your are probably already getting now.

 

Now what about installation services? Well, these certainly appear to be reduced if not eliminated, so again little or no revenue there. What’s left? Just general consulting revenue on the applications but most resellers are not focused on this since their business is primarily selling and installing hardware and software.

 

Bottom line? The world is changing and the traditional reseller is being cut out of the game with every second that goes by. For better or worse that is just a fact of life these days. If you aren’t looking as a reseller to change your business model and focus on online services, then like your commissions, you are going bye, bye. If you are a customer and you are not considering online services as an option, then you are already paying too much for the IT services you have.

 

The cloud is coming and it will envelope us all, suppliers and customers alike.