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Microsoft unveils online services compensation deal for partners

Microsoft unveils online services compensation deal for partners

Microsoft has revealed pricing and a partner compensation model for some of its new online business productivity offerings.

At its Worldwide Partner Conference in Houston, Texas, this month, the software giant reiterated its commitment to move towards offering not only on-premise software, but also a combination of software and hosted services.

A key part of this strategy is a new hosted business productivity suite that includes Exchange Online, Office SharePoint Online, Office Communications Online and Office Live Meeting, which it aims to launch in the US early next year.

However, the suite is not expected to be available in New Zealand until the middle of next year.

In the US it will sell for US$15 a user a month, while each component will also be available individually.

Exchange Online will cost $10 a user, a month; SharePoint Online for $7.25 a user, a month; Office Communications Online for $2.50 a user, a month; and Office Live Meeting Online for $4.50 a user, a month.

Partners who offer the services will earn 12 percent of the value of the contract in the first year and a recurring revenue stream of six percent every year for the life of the contract.

Stephen Elop, president of the Microsoft business division, who made the announcements during the opening keynote address of the conference, says this compensation model makes it possible for partners to build an ongoing annuity stream from their customer base over time.

“The strength of this approach is that any partner can sign up and participate in the software-plus-services transformation. Our vision is that everything [partners] do today with our server products, [they] will ultimately be able to do in this software-plus-services world.”

However, Elop says the real opportunity for partners lie in the differentiated services they can provide on top of the online offerings.

He says software-plus-services offers a great business opportunity for Microsoft and its partners, citing figures from research IDC predicting the web-based application will grow 32 percent a year until to 2011, resulting in a US$21-billion market.

At the same time, he says Gartner is estimating that 25 percent of all new business application deployments in 2011 will be in a web-based environment.

“There is a business opportunity here and Microsoft will continue to make it real for ourselves, our partners and our customers.”

In addition, Microsoft will also introduce two offerings early next year that provide access to email and internal company websites, for employees who do not necessarily sit in front of PCs. Exchange Online Deskless Worker and SharePoint Online Deskless Worker will be available for $3 a user, a month.

Microsoft also announced a programme to help partners get started on the new offerings, called Quickstart for Microsoft Online Services.

Local resellers are able to register for the programme now, which will give them a head start when the online services are available here, says Microsoft New Zealand partner group manager Nick Fletcher. “A number of New Zealand partners have registered already.”


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