Partners Embrace Huge Opportunities in Software plus Services Era

Redmond, Wash. – March 2, 2008 – With Microsoft services like Exchange Online, SharePoint Online, and CRM 4.0, organizations big and small now have more choices in how they access and manage enterprise-class software – from entirely Web-based, to entirely on premise solutions, and anywhere in between. Having a variety of solutions to choose from gives customers the mobility and flexibility they need to meet constantly evolving business needs. To meet this demand, Microsoft is moving towards a hybrid strategy of Software plus Services, the goal of which is to empower customers and partners with richer applications, more choices, and greater opportunity through a combination of on-premise software, partner-hosted software, and Microsoft-hosted software. As part of this strategy, Microsoft today announced that it is expanding Microsoft Online Services – which includes Exchange Online and SharePoint Online – to organizations of all sizes through a limited beta test in the U.S. With services like Microsoft Online Services and Microsoft Dynamics CRM 4.0, organizations will have the flexibility required to address their business needs.

Hybrid Delivery Models Deliver Partner Opportunity

The shift toward delivery models that combine on-premise software with hosted services is part of a continuum that will grow over time, with a focus on how hybrid solutions can empower customers with richer applications and more choices, and provide partners of all sizes with greater business opportunities. To help partners understand how they can benefit from Microsoft’s Software plus Services strategy, Microsoft has created a partner opportunity framework that maps the three main delivery models—on-premise, partner-hosted, and Microsoft-hosted. This framework helps partners to define, understand, and capitalize on the full range of business opportunities that are enabled by a Software plus Services strategy.

“In contrast to an online-only services approach, Microsoft supports the entire spectrum of software delivery. This is a unique competitive advantage that allows us to create new customer opportunities for a broad range of partners,” said Allison L. Watson, corporate vice president, Microsoft Worldwide Partner Group. “We are working closely with partners of all types –whether it’ systems integrators, hosters, web designers, advertisers and publishers, system builders, retailers, independent software vendors and finally value-added resellers and distributors – to drive clear guidelines for engagement, ranging from service delivery and monetization to the partner’s business model and marketplace velocity.”

Making the Opportunities Real: Exchange Online and SharePoint Online

Exchange Online and SharePoint Online are two examples of how partners can extend their reach, grow their revenues, and increase speed to sales in a Microsoft-hosted scenario. In September 2007, Microsoft initially announced the worldwide availability of Microsoft Online Services – which includes Exchange Online, SharePoint Online, Office Communications Online, and Office Live Meeting – to organizations with more than 5,000 users.

The extension of these services to small and mid-sized businesses excites partners in the managed services space because they see it as an opportunity to deliver additional services and customer value on top of Microsoft-hosted Exchange Online or SharePoint Online. Microsoft Online Services opens the door for partners to deliver reliable business services such as desktop and mobile e-mail, calendaring and contacts, instant-messaging, audio and video conferencing and shared workspaces – all of which will help increase their revenue stream and grow their businesses.

Ceryx Inc., a messaging solution and Hosted Exchange provider with locations in Toronto, Canada and New York, sees this announcement as another example of how Microsoft is collaborating with partners to create more business opportunities. “Our experience working with Microsoft has demonstrated that the partner channel is very important to them,” says Gus Harsfai, CEO and president of Ceryx Inc. An eighteen-year veteran of the hosted services space, Ceryx is excited to leverage Microsoft’s innovation and brand to reach new customers and deliver greater value.

Microsoft partners can leverage Microsoft-hosted solutions to speed the deployment of Exchange and Office SharePoint in customer organizations, freeing them to focus on migration, customization, integration, and other services. For Evolve Partners Inc., a leading provider of information technology solutions and services based in Anaheim, Calif., the focus of their business is delivering managed services to customers, so the announcement of Microsoft Online Services ties closely to their own services strategy. Supporting both on-premise and hosted solutions, Evolve Partners understands the efficiencies and added value that hosted solutions can provide. “Nine out of ten times we spend one to two weeks just prepping a customer’s existing software to support a traditional on-premise solution,” said Tim Acker, Evolve Partners president and chief operating officer. “With hosted services, we’re able to get up and running immediately, and that shows value to the customer.”

Evolve Partners also sees the flexibility that Microsoft Online Services provides as having helped them generate add-on revenue by reaching new customers or expand their existing customer base. “We’ve seen customers want an offsite, rent-as-you-go type option,” shared Acker. “So we see this actually accelerating a number of opportunities in our pipeline.”

Because Microsoft manages the deployment and maintenance of Exchange Online and SharePoint Online, partners can leverage that time and cost savings to have deeper conversations with customers about their business needs and fill the role of trusted advisor. For this very reason, Courtesy Computers, a managed network services provider in Fort Lauderdale, Florida, outsources its hosting business so it can focus on the various needs of its customers, and leverage these conversations with customers as an opportunity to deliver greater value and generate more revenue. “Hosted solutions provide an affordable way for small businesses to get up and running and is a great foot in the door for partners to support them,” said Tim Woodcock, president and CEO of Courtesy Computers. “The potential for add-on services, additional training, and a high level of support provides us with great business opportunities whether it is right now or down the road.”

Building on the strength of the Microsoft brand, Microsoft Online Services helps partners to deliver greater value to customers and grow their own businesses profitably. “With the release of Exchange Online and SharePoint Online, Microsoft will be closer to the hosting community than it’s ever been,” says Ceryx’s Harsfai. “We see this as an opportunity to continue delivering tailored solutions, but to a broader market segment, faster and at a lower cost.”

Opportunities Abound: Partner-Hosted Solutions Using Microsoft Dynamics CRM 4.0

Microsoft Online Services isn’t the only recently announced opportunity for partners in the Software plus Services space. Microsoft Dynamics CRM 4.0, released in December of 2007, also provides a key aspect of Microsoft’s Software plus Services strategy. The unique advantages of the new Microsoft Dynamics CRM 4.0, which can be delivered on-premise or on-demand as a hosted solution, make Microsoft Dynamics CRM a compelling option for solution providers who want to rapidly offer a solution that meets customer needs and maximizes their potential to grow their own business through additional services.

Partners such as Axonom, a provider of vertical modules for high-tech, multi-channel manufacturers and distributors for Microsoft CRM based in Minneapolis, Minnesota, clearly see business opportunities through a software plus services model. “Customers are looking for choice,” said Mike Belongie, vice president of sales for Axonom. “They want flexibility in how their software is delivered. Being able to provide our CRM solutions on-premise or through a hosted model helps us to deliver greater value to customers, and that’s ultimately helping us to grow our business.”

The value created by software plus services was so great that it compelled one IT services company to make the switch from to Microsoft Dynamics CRM. “Mondo fully embraces Microsoft’s vision of Software plus Services,” said Lars Munch Johansen, vice president of sales and marketing at Mondo. “There is no doubt that our customers will have a huge benefit from the power of choice in the Software plus Services approach, both in terms of investments and the ability to drive a more successful and profitable business.”

Flexibility and Choice Deliver Customer Value

Microsoft’s Software plus Services strategy includes the best of on-premise software combined with the best of hosted services, bridging this continuum to allow for a range of superior options in customer choice and business opportunities for partners. This blended approach is designed to deliver the best of both worlds, with the goal of empowering customers and partners with richer applications, more choices, and greater opportunity. Microsoft partners play a critical role in delivering that value to customers.

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