Microsoft re-imagines the channel’s cloud investments

Washington – Microsoft got two things right yesterday during the opening of the Worldwide Partner Conference.

The first was that they acknowledged their cloud strategy will be dependent on the channel ecosystem. And, while this may look and sound like a motherhood statement from the software giant, you have to see what is going on in the market to realize it was something that needs to be said and heard.

The fact is there are plenty of solution providers who are not making money on cloud and are scared by the prospects of getting their lunch handed to them by swifter, smaller partners who don’t have to worry about legacy customers and staff.

Gavriella Schuster, Microsoft’s worldwide SMS&P vice president, told the audience of 16,000 plus partner executives that the cloud business transformation that is happening today is being driven by the solution providers and it’s time to make it easier for the channel to do business.

The other thing Microsoft got right was Schuster developing a plan of action that would fast track channel partners to profitability.

This is important is because currently the channel has no clue when this will happen. And, when you consider what happened to Nirvanix channel executives have every right to worry. Nirvanix was one of the first public, hybrid and private cloud services companies. It received plenty of accolades and got a tonne of investment only to run out of cash and close its doors for good late last year.

Schuster is at least trying to make things easier for the channel in this cloud transformation by waving the first year silver cloud competency fees. There is also a 10 per cent incentive discount for on-premise competency.

Microsoft will also provide channel companies with technology from Office 365, Azure and others for internal use by covering at minimum 25 per cent of those costs up to 200 per cent depending on a partner’s cloud competency levels and solution provider achievements.

Schuster added that the company will also offer unlimited cloud support for Azure and Office 365.

“We realize that the first step in developing a cloud and hybrid cloud practice needs a strong first year investment because it’s difficult skilling people up, rethinking your sales compensation plans and creating new service offerings. How can Microsoft help you make these investments? So we reimagined the cloud compensation to make it shorter,” Schuster said.

Make no mistake here. Microsoft’s generosity here is not from the goodness of their heart. The company wants something in return. Schuster said that Office 365 and Azure will be based on performance and the channel’s ability to drive that consumption and if a solution provider can do that consistently Microsoft will make more investments in your business helping you grow.

“Those who have taken the first step in the cloud and met the performance thresholds and have been granted access to silver will be grandfathered. We are not stopping there. We will have a performance path to the cloud for CRM Online. This will enable you to get to the trifecta of cloud and hybrid practices along with Office 365 and Azure; it’s the complete connected cloud for customers,” Schuster said.

With all this support Schuster anticipates that partners could see the break-even point within a year. That might be a bit ambitious but at least there is acknowledgement from a major cloud software player in Microsoft that getting to cloud profits is a lot harder than it looks.

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Jim Love, Chief Content Officer, IT World Canada

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Paolo Del Nibletto
Paolo Del Nibletto
Former editor of Computer Dealer News, covering Canada's IT channel community.

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