Into the cloud…

Into the cloud…

It is always impressive to see the show Microsoft puts on for its partners at its annual Worldwide Partner Conference, which Reseller News attended for the third year in a row this month.

With more than 8000 partners from 130 countries present, this year’s event in Denver was sure to be a spectacle. And it was – banks of bright lights, flashy visuals and live music kicked off activities at 8.30am each day. It felt like a breakfast-time rock show.

For all the show business flash – such as worldwide partner group VP Allison Watson’s over-the-top entrances and exits or CEO Steve Balmer’s excitable appearance – what made the most impression on me was one very important message.

Amongst the rah-rah about being “tough-minded” about competing and “monetising” the “waves of innovation” it has already delivered and still has to come, and talking up its software-plus-services play; the clear message is that Microsoft values its partners.

Executives such as Ballmer, Watson and COO Kevin Turner repeatedly stated that its partners are one of Microsoft’s top five competitive advantages.

They also reiterated they want to take partners along as the company responds to the software-as-a-service trend.

Microsoft needs its partners to compete against more nimble rivals, such as and Google.

These companies may have been faster on their feet making inroads with web-based services, Microsoft though is confident it will triumph in the long run. It already has a partner ecosystem in place, made up of ISVs, VARs, system integrators and distributors, through which it can reach a greater number of customers with its software-plus-services offerings.

To hear Microsoft top-brass clearly say the company will include partners as it moves to a software-plus-services model is encouraging.

The role of partners in this model is clear – not only can they host or customise Microsoft applications that move to a hosted format – they can also develop their own hosted services around these offerings.

This will work in much the same way as partners have always built solutions on top of existing Microsoft applications.

However, Microsoft executives also stressed the move to software-plus-services will be a long-term transformation.

It is happening, but there are still plenty of opportunities right now for partners with Microsoft’s traditional products.

The company is in the midst of its biggest-ever roll-out of new products with significant launches such as Windows Vista, Office 2007 and Exchange Server 2007, representing an unprecedented $20 billion worth of R&D.

In the past year it also spent more than $7 billion on R&D and this figure will increase in the coming year, with Turner’s “big dog” releases such as Windows Server 2008, SQL Server 2008 and Visual Studio 2008.

According to Turner, these new products represent a “feeding frenzy” of opportunities for partners, adding Vista alone is worth US$300 billion in opportunities over the next year. He encouraged partners to “monetise” these opportunities and to “sell, sell, sell”.

This shows Microsoft is not moving away from its traditional business model just yet, which should be comforting to its partners everywhere, including New Zealand.

However, this doesn’t mean you shouldn’t begin to transform the way you do business.

For as much as Microsoft spoke about opportunities with its traditional software, it also devoted a fair bit of talk to its hosted services like Office Live and Dynamics CRM Live, which it launched at the conference along with an early adopter programme.

Microsoft is certainly starting to move its products “into the cloud” and this could affect the company’s traditional partners in a myriad of ways – perhaps not today, but definitely in the not-too-distant future.

Start preparing for that move now. Think about how your business will change if even half of all Microsoft products are no longer delivered to your customers on a disc.

Will your customers access Live versions of Office, Exchange or CRM from you, giving you an opportunity to customise their experience, or directly from Microsoft, or from one of your more agile rivals?

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