Microsoft Unfurls Its Multi-Faceted Cloud Message

At its Worldwide Partner Conference this year, Microsoft backed up its "all-in" cloud computing mantra with tools, training and incentives that channel partners of all types can use to start building businesses in this new land of technological opportunity.

As it has done in past WPCs, Microsoft played up the cloud momentum that already exists within its partner base. Early adopters of the Business Productivity Online Suite (BPOS) that have built thriving businesses in the cloud are logical case studies for other partners to follow. Microsoft's overarching message is that partners can transfer their on-premise skills into the cloud without missing a beat, and that services dollars will still be there for the taking.

"Partners are saying there's been some adjustment, but they're now up and running and they're making money," said Jon Roskill, Microsoft's newly anointed vice president of worldwide channels, in an interview at WPC. "The transformation is very clearly real."

To help partners get up to speed, Microsoft is adding new cloud incentives to the Microsoft Partner Network (MPN).

In late 2010, Microsoft will launch its Cloud Essentials Pack, a subscription offering that includes 250 seat licenses for BPOS and CRM Online. Microsoft plans to add its Windows Intune desktop management service later on, and it'll waive the $120 annual fee for partners that sign up during the promotional period, the length of which is unknown at this time.

Gretchen O'Hara, senior director of cloud strategy in Microsoft's Worldwide SMS&P division, says the goal is to help partners grasp the fundamentals of the cloud by using Microsoft's own services. The Cloud Essentials Pack also gives partners access to online pre-sales support, marketing, sales and technical training, she said.

"We're extending MPN to the cloud," O'Hara said in an interview at WPC.

Also new to MPN is Microsoft Cloud Accelerate, a badge for partners that show a high level of proficiency in selling cloud offerings. Partners get priority placement in the Pinpoint directory, local field engagement and unlimited pre-sales support, among other benefits.

To qualify, Microsoft solution providers must close three deals of at least 150 seats in a single month and get three customer references. Developer partners must have an application certified for the Azure platform to be eligible for the Cloud Accelerate badge.

These incentives are designed to get more partners on board with Microsoft's cloud vision and build on the momentum the channel has already generated behind BPOS.

"The cloud is really impacting all partner types across the board," said Jenni Flinders, vice president of the U.S. Partner Sales and Programs Group (US PS&P). "Every partner should get ready for the cloud, and if they're not yet ready, they need to assess their business models."

Next: Why The Windows Azure Appliance Is Important

In addition to channel incentives, Microsoft also showed a willingness of give up some control over its Windows Azure platform to help address companies' fears about putting sensitive data in the cloud. The Windows Azure appliance, slated to arrive later this year, lets companies run Azure from within their own data centers.

The Azure appliance is aimed at large enterprises, so it's not something VARs are going to be adding to their portfolios anytime soon. Still, the significance of Microsoft giving customers the freedom to run Azure any way they wish wasn't lost on solution providers. "I think Microsoft has actually figured out the cloud, and that wasn't really the case in the past few years," said Joseph Giegerich, managing partner with Gig Werks, a Yonkers, N.Y.-based solution provider. "Their message of choice is now clear with Azure on- and off-premise, and that's just as important as outlining the skills partners will need to make the transition."

But even as Microsoft goes all-in with cloud computing, there's a realization that not all partners are grasping the value proposition of the cloud, mainly because they're terrified of the changes it brings. As it has done at past WPCs, Microsoft offered gentle-yet-firm reminders that the cloud is an industry-wide shift, and not one that Microsoft is foisting upon partners of its own accord.

"The cloud does change and makes us reinvent our business models, yours and ours," Microsoft CEO Steve Ballmer said in his WPC keynote. "But it's a change that's inevitable. It's a change that allows us all to deliver new value."

Ric Opal, vice president of Peters & Associates, an Oakbrook Terrace, Ill.-based solution provider, says despite the trepidation some partners feel about moving to the cloud, most realize that the path to future revenue isn't going to the one they've traditionally followed. "As a partner, you shouldn't plan your business around the annuity model. You have to go get the services that are there," he said.

To assuage partners' fears, Microsoft is also helping them identify cloud opportunities. Microsoft's new Business Builder for Cloud Services helps partners find cloud deals in small and medium companies as well as in the public sector. The new Cloud Profitability Modeler business-planning tool helps solution providers develop a three-year forecast of revenue, profits and losses, and other metrics for building a cloud business.

Microsoft says these tools are helping demystify the cloud and defuse partners' fears. "Partners want to be all-in but need the road map," said Flinders. "Many partners are thinking about P&L as they figure out how to transition to the cloud. Our job is to support them, and help take some of the burden off them."

Cloud computing has been on the agenda at the past several Microsoft Worldwide Partner Conferences, but never has the message resonated so strongly with partners as it did at this year's event. The incentives, tools, and road maps are now in place for partners, and there's a definite sense that Microsoft's cloud vision is gaining momentum.

As this freight train chugs away from the station, it's getting close to now-or-never time for partners to jump on board. "Microsoft's cloud message is now as clear as it's going to get. Partners that retool themselves and can shift to the new model are going to have plenty of opportunities," said Giegerich.