Microsoft copies Google, Salesforce, and Red Hat in new partner initiative

If you attended Microsoft's Worldwide Partner Conference 2008, you can be excused for thinking you showed up at the partner event for Red Hat, Google, or Salesforce.

After all, Microsoft's new partner initiatives rely heavily on concepts devised and delivered by these companies:

Tech watchers will see lots of familiar concepts in software behemoth Microsoft's revamped go-to-market strategy....[Microsoft] proclaimed its newfound focus on delivering software and services to customers via "the cloud," using a subscription-based model popularized by companies like Red Hat, Websense and Salesforce.com.

Microsoft is smart: Why reinvent the business model wheel when others have pioneered successful ways to deliver software value? Of course, Microsoft has never been the most innovative of companies - it has become the market behemoth that it is by out-executing its competitors, not by out-thinking them.

But this may be one area in which Microsoft needs to think a bit more. As The Motley Fool notes,

Although partners will get a 12% cut of the first year's subscription, and 6% thereafter, they will now be competing head-to-head against Microsoft for delivering value-added services. This marks a dramatic departure from the way Microsoft has worked with partners in the past. Mr. Softy formerly provided direct support and services only to the largest enterprise clients, while channel partners handled the rest.

By tangling with its partners in accounts of all sizes, Microsoft may have finally proved to be too big for its own good. Since it got into the applications business, it has had a competitive relationship with its software partners. But now it will also be competing with its channel delivery partners.

Microsoft is a smart company, and has obviously thought about these issues. I still wonder if the company will find that its partners don't like having to compete with their old friend.

[josmor]

I was in the WPC. All the event was designed to explain partners how Microsoft will help partners to increase their business. So I think MSFT will not really compete with partners, they will user their partner muscle to move them to create new business models using MSFT's services as platform.
The problem goes when partners will maintain their business models. If many important and influential partners from around the world get the message, they will save millions and generate a lot of revenue.
For example, for small business... why to keep expenses for hosting when Microsoft with Live Services can provide it for free? (www.smb-email.com) Specially if the partners can add value to the offer...
The business for Microsoft partners is basically in value added. Licensing margins are very low, but maintenance contracts or deployment can be very good paid.

[josmor]

I was in the WPC. All the event was designed to explain partners how Microsoft will help partners to increase their business. So I think MSFT will not really compete with partners, they will user their partner muscle to move them to create new business models using MSFT's services as platform.
The problem goes when partners will maintain their business models. If many important and influential partners from around the world get the message, they will save millions and generate a lot of revenue.
For example, for small business... why to keep expenses for hosting when Microsoft with Live Services can provide it for free? (www.smb-email.com) Specially if the partners can add value to the offer...
The business for Microsoft partners is basically in value added. Licensing margins are very low, but maintenance contracts or deployment can be very good paid.

[josmor]

Your system is not accepting my long answer... so I opted to publish it in http://wpc08.blogspot.com/

[igilyeat]

It is always fascinating to me to watch Microsoft efforts to build subscription based solutions. This is an effort that begain back in the 1993 time frame. At the time I was with a small magazine publishing company called WordPerfect Publishing Corporation (no this is not WordPerfect Corporation). As I recall, WordPerfect Corporation had about 15,000 subscribers to a software product at this time. WordPerfect Publishing Corporation, separate from WordPerfect Corporation also had several thousand subscribers to a monthly software solution. I became aware of Microsoft recruiting subscription talent during this time frame and found it highly noteworthy that they were trying to acquire this subscription marketing talent. Subscription based marketing is a bit different that marketing shrink wrapped software or enterprise software. No matter, it's been fun to see that even though they've been pursuing subscription talent for the better part of 15 years, that they are just now coming to market with a SaaS solution.
www.iangilyeat.com

[joshcawthorn1]

http://www.youtube.com/watch?v=s8tNI2QDBmA

[christopherafernandez]