Microsoft Makes a Serious Cloud Play

A. DeCarlo
A. DeCarlo

Summary Bullets:       

  • Often criticized for failing to exploit partner relationships to expand its cloud position, Microsoft introduced new Office 365 programs that should stimulate sales through hosting partners.
  • At the same time, Microsoft previewed new technologies that provide key elements hosting partners will need to offer hybrid solutions.

Microsoft has long withered under accusations that it was failing to address threats through the cloud to its desktop dominance.  Criticized first for failing to move quickly enough into the cloud and then later for not capitalizing well enough on third-party partners to extend sales of its cloud-based Office 365 solution, Microsoft was often called out for clinging too long to conventional licensing models even as enterprise clients urged the company to embrace a subscription-based delivery model.  However, a series of new partner programs and some associated technology reveal a company that is more than ready to take on any rivals in the cloud.

Beyond offering better incentives to stimulate partner sales of Office 365, Microsoft is reversing its long-standing lock on the customer relationship.  Partners will now be able to white label the Office 365 cloud suite and bill clients directly, essentially putting the hosting provider in control of the client relationship.  This is likely not only to end grumbling by long-time partners about their limited client role, but also to put pressure on rivals such as Google to improve their own partner programs.

Microsoft is also stepping up its cloud game on the technology front, unveiling plans to add Azure cloud services to Windows Server 2012.  In its Community Technology Preview (CTP) at the 2012 Microsoft Worldwide Partner Conference earlier this month, Microsoft showed off capabilities that will allow hosting partners to build, provision, and manage Azure-compatible cloud services through the company’s Service Management Portal and application programming interface.  This should, at least in theory, make it easier for partners to launch hybrid cloud services that connect data in customer private clouds with external clouds. 

Conceptually, all this sounds like good news for Microsoft partners, and potentially for their customers, who should benefit from deeper support and faster access to new innovations.  However, until providers begin to roll out the white-labeled services, enterprise clients may wonder whether these moves may actually quash innovation and limit diversity of services, depending upon how restrictive Microsoft’s delivery requirements are for partners.

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