Microsoft Exec Says Cloud Revolution Will Include SMBs

A big part of Microsoft's "all-in" battle cry in cloud computing is the implication that partners of all sizes are going to be impacted, even those in the farthest-flung echelons of the SMB market.

In a Tuesday address to attendees of Ingram Micro's North American VentureTech Network (VTN) Fall 2010 Invitational in San Francisco, Cindy Bates, Microsoft's vice president of U.S. Small, Medium Business and Distribution, underscored the importance of SMB customers and the channel partners that serve them.

Microsoft now has 1,000 partners actively selling the company's Business Productivity Online Suite of cloud-based apps, and thousands more partners have signed up to learn more about its potential, according to Bates. Over the past eight months, Microsoft has seen a tripling in the number of SMB partners embracing BPOS, she added.

"We believe we're in the midst of a tech revolution in the SMB," said Bates. "Technology that was once available only to the largest companies is now available to the smallest ones. This is about enterprise-level expertise coming down to the SMB space."

Contrary to what some VARs may think, the SMB migration to the cloud will bring with it plenty of services business. "SMB customers are going to have on-premise and they're going to have cloud, and they're going to look to [partners] to be that translator," said Bates.

Next: What Does 'The Cloud' Mean To Microsoft?

Microsoft envisions a "huge opportunity" for all its partners in cloud computing, but Bates took a page from the Larry Ellison playbook by acknowledging the hackneyed nature of the term. "What is the cloud? It's such a buzzword," she said. "We see cloud as an entire new computing model that's about Internet scale and connecting to a variety of devices and endpoints."

Bates also touted Microsoft's Cloud Champions Club, a three-tiered offshoot of the existing VAR Champions Club that gives partners increasing levels of marketing and sales support resources as they expand the scope of their cloud business. On Oct. 11, Microsoft will launch a set of training offerings to assist businesses in making the transformation to the cloud, Bates said.

Microsoft's goal with the Cloud Champions Club is to make it easier for VARs to handle the up-front costs associated with moving to the cloud, Eric Martorano, Microsoft's head of U.S. SMB Channel and Online Services, told CRN in August.

"We're trying to give partners that have really made a commitment to cloud with resources, funding and training to make them successful," Martorano told CRN at the time.

There's no arguing that Microsoft arrived late to the cloud computing party, but the software giant has been playing up the cloud-related expertise it has built up over the past 15 years of running large-scale services like Windows Update, Hotmail, and more recently, Bing.

Next: The Windows Azure Sweet Spot

Windows Server and SQL Server have also moved to the cloud under the Windows Azure product banner, and while Azure isn't much of a channel play at the moment, Bates said it's catching on with certain types of partners.

"The sweet spot right now with Azure is with ISVs, who right now are able to focus on the business logic in their products without dealing with the operational headaches," Bates said.

Bates noted that 70 percent of Microsoft's R&D investment for 2011 focused on cloud computing, adding that this number will eventually move to 90 percent. Microsoft has been reciting this figure with mantra-like frequency to underscore its resolve to become a major cloud player -- one whose offerings stand out from the increasingly crowded pack.

"We believe you will see a fairly significant difference between what we offer and other companies in the cloud," Bates said.