Microsoft preps partners for a very different future

By Joel Shore, ITworld.com |  Business

Microsoft's Worldwide Partner Conference is running in Denver this week, and, not surprisingly, the software giant is singing its praises to the channel. The fact is, for much of what Microsoft sells, this is true. And it's equally true for hundreds of other technology vendors, alas, they just don't get the same amount of publicity.

The numbers game is reaching near-staggering proportions. According to Corporate Vice President, Worldwide Partner Group, Allison Watson, in the last year, Microsoft had a 17 percent increase in its Microsoft Partner Program, bringing the total to more than 400,000 partners worldwide. There was 90 percent growth worldwide in mobility solutions partners, an indication, Watson says, of just how crucial the mobility business has become. In its Small Business Specialist Community, partner headcount grew by 80 percent, bringing the total to 4,200 in the United States and 12,800 worldwide. And Microsoft has recruited more than 1,000 new partners in key new growth areas including Dynamics, Search, Collaboration and Web.

At this rate, everyone might soon be a partner, leaving no one to actually sell to.

Ok, that's a bit of an exaggeration, but the numbers indicate that things are not sitting still. We've known for years that small businesses were being underserved as systems integrators concentrated on large enterprise accounts. That meant a lot of money was being left on the table. And the explosion in mobile services -- not just Windows Mobile, but the Blackberry, Palm OS, and other platforms as well -- indicates that we've moved well beyond novelty to technology of a mission-critical nature.

With all these avenues for providing services and solution to customers, you might think that you're in a good position for the next few years. Alas, you'd probably be wrong.

At this year's conference, Microsoft is all about "software plus services," which allows customers to choose how software is delivered. Essentially, it's traditional on-premises installation of software versus hosted subscription services. And who is doing that hosting? Might be you. Might be Microsoft. Might be a company that does nothing but hosting. But fear not, according to Watson: " In the cases where Microsoft is hosting the software, we'll clearly outline areas in which partners can participate by providing value-added services on top of the hosted software." I suppose 50 percent of something is better than 100 percent of nothing.

At the conference, Microsoft is outlining a framework for how partners can participate and make money with this new opportunity, "framing the monetization approach for how partners participate financially within the new software plus services model." As more products become available in the software plus services area, Microsoft plans to continue defining the partner revenue possibilities for each.

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