HOUSTON — July 8, 2008 — Stephen Elop, president of the Microsoft Business Division, today announced new pricing, packaging and partner compensation details for Microsoft Online Services. Microsoft Corp. is introducing two new suites of subscription services as part of the Microsoft Online Services family. The new offerings are tailored to meet the needs of the entire work force — from employees who use a PC infrequently to information workers who require advanced capabilities.
“Today we are taking an important next step in delivering Microsoft Online Services, and we’re doing so with a broad set of Microsoft partners, that are crucial to bringing this solution to our customers,” Elop said at the annual Microsoft Worldwide Partner Conference in Houston. “Microsoft Online Services is a key component of the software plus services initiative, and we’re seeing customers, partners and even competitors embrace this flexible approach to the cloud.”
Microsoft Online Services delivers enterprise-class Microsoft software as subscription services to businesses of all sizes hosted by Microsoft and sold with partners, and include Microsoft Exchange Online, Microsoft Office SharePoint Online, Microsoft Office Communications Online, Microsoft Office Live Meeting, and Microsoft Dynamics CRM Online.
The Right Features at the Right Price
Microsoft Online Services is priced to meet the diverse needs of today’s workers and provide businesses with a cost-effective means to equip their work force with the tools they need.
Microsoft is introducing Exchange Online Deskless Worker and SharePoint Online Deskless Worker. These new offerings are designed to meet the needs of deskless workers, those people who typically spend a small portion of their workday using a computer but still need to communicate and collaborate with colleagues and partners.
A Deskless Worker Suite, including Exchange Online Deskless Worker and SharePoint Online Deskless Worker, will be available for $3 (U.S.) per user, per month. Customers can also subscribe to each service independently. Exchange Online Deskless Worker will provide e-mail, calendars, global address lists, anti-virus and anti-spam filters, as well as Outlook Web Access Light for access to company e-mail. SharePoint Online Deskless Worker will provide easy access to SharePoint portal and team sites and search functionality, giving employees read-only access to important information such as company policies, training and benefits.
For information workers, businesses can provide an online business productivity suite of Microsoft’s enterprise-class communication and collaboration software as a subscription service. The suite includes the following:
Exchange Online for desktop and mobile e-mail and calendars with Outlook Web Access and full Office Outlook integration
Office SharePoint Online for portals, collaboration, search and customized team sites
Office Communications Online for instant messaging and presence
Office Live Meeting for Web conferencing and videoconferencing
The suite will be available for $15 per user, per month (U.S.). Customers can also subscribe to each service independently.
“Microsoft Online Services is the right solution for our business, as the subscription model enables us to provide our employees with the right software on a variable-cost basis,” said Marv Toland, chief financial officer for Eddie Bauer. “This helps Eddie Bauer meet the needs of its employees by ensuring that we are continually upgraded to the most current releases. With Microsoft running these services, our IT department is able to focus on strategic, value-enhancing projects. We believe that this is the model for the future.”
Partner Compensation Model
Microsoft Online Services creates a new opportunity for Microsoft partners to win new customers, increase revenue and boost sales velocity. Partners are seeing new opportunity to migrate, combine and customize Microsoft Online Services. In addition, partners that sell Microsoft Online Services will receive a recurring revenue stream for as long as their customer subscribes to the services.
“Microsoft is committed to software plus services, and we are equally committed to embracing this opportunity together with the Microsoft partner community,” said Allison L. Watson, corporate vice president of the Worldwide Partner Group at Microsoft. “The success of Microsoft Online Services depends on the partners that sell, customize and provide consulting, migration and managed services for customers. The end result is an environment where both customers and partners win. Partners will have a tremendous opportunity in the midmarket, where customers can get enterprise-class software delivered on a predictable, pay-as-you-go basis.”
Partners that sell the Microsoft Business Productivity Online Suite, Deskless Worker Suite or any of their components receive 12 percent of the first-year contract price and 6 percent of the subscription fee ongoing. This can translate into 18 percent of the subscription value in the first year of the partner’s relationship with the customer.
Today, leading Microsoft partners such as Accenture, Ascentium Corp., Atos Origin SA, BT Group plc, CDW Corp., Evolve Partners, Inc., Getronics NV, HCL Technologies Ltd., K2, M3 Technology Group, Mamut Software Ltd., Neudesic LLC, PointBridge, Susquehanna Technologies, ThoughtBridge and Unisys Corp. have become authorized resellers of Microsoft Online Services. To help partners start to take advantage of this new opportunity, Microsoft today launched Quickstart for Microsoft Online Services, which provides partners with the guidance they need to discover, enroll in and activate the services. Partners wanting more information or to join the Quickstart program can visit http://www.quickstartonlineservices.com.
Microsoft Online Services Momentum
Customer and partner interest in Microsoft Online Services remains high. Customers including Belay Development, Clean Power Research LLC, Cowan, Gunteski & Co., P.A., Eddie Bauer, Gunteski & Co. P.A., PFT-Medway and Transpara Corp have begun using the new services as part of a beta trial. In addition, a growing number of large enterprises have chosen Microsoft Online Services for their messaging and collaboration needs, including A.P. Moeller-Maersk Group, Aviva plc, Doosan Infracore Co. Ltd. and Nokia.
U.S.-based companies can sign up for the beta at http://www.mosbeta.com. More information on Microsoft Online Services is available at http://www.microsoft.com/online and the Worldwide Partner Conference Virtual Press Room at http://www.microsoft.com/presspass/events/wwpc/events.mspx.
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.
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Microsoft Online Services Opens the Door to Partner Opportunity and New Business Models
“The introduction of online services by an established software company like Microsoft that understands the complex enterprise needs of large companies will be a catalyst for the adoption of the cloud computing model. Many of our clients are attracted to the flexibility and lower costs promised by cloud computing and online enterprise solutions, and Accenture looks forward to working with Microsoft to bring the benefits of this new approach to our clients.”
Global Managing Director for Workplace Technology & Collaboration
“Microsoft Online Services will allow us to have a predictable infrastructure to work off of. Customers have all different environments, and you can walk into many unknowns to deploy solutions on these different environments. This adds project risks that can derail even a well-planned and well-executed implementation. There are now ‘givens’ with the Online Services platform, which brings standardization and predictability to the deployment of our solutions. We can now give more accurate estimates, hit the estimate with confidence, and do more with less for our customers. In our eyes, it’s about taking risks off the table.”
Executive Vice President
“The Microsoft Online Services offering helps customers to reduce their operational cost through streamlined software and services delivery, making it a welcome addition to the Atos™ Workplace Solutions family. By working with Microsoft, we feel confident that we can turn the software-plus-services strategy into tangible customer benefits, while continually growing our bottom line.”
Senior Vice President of Global Alliances
Atos Origin S.A.
BT Global Services
“BT is delivering on the promise of unified communications today. Our professional services capability takes a partnership approach with Microsoft to our mutual customers. We continue to integrate Microsoft Online Services into BT’s own voice and Web services for a more complete communications solution. These initiatives are important to understanding and managing unified communications while we continue to bring new value to our customers and our alliance with Microsoft.”
President of Strategy, Marketing and Propositions
BT Global Services
“Microsoft Online Services enables CDW to provide our customers with a blend of online and on-premise solutions that best meet their requirements. Online services are a great entry into new small and midmarket customers. As a total solutions provider, CDW can provide these customers with hardware, software, licensing and services for both their online and on-premise solutions, enabling CDW to differentiate ourselves in the marketplace.”
Director of Microsoft Alliance
“Microsoft Online Services replaces the traditional low-level hardware deployment pieces of the project with higher-margin migration and integration services, which allows us to expand our business application design practice. Moreover, it provides our clients with more immediate value in the use of their business applications.”
Executive Vice President and Chief Operating Officer
Evolve Partners Inc.
“The Microsoft Online Services offering is a clear extension of Getronics’ focus on delivering people-centric information and communication technology (ICT) workspace services based on our Future-Ready Workspace. We’re proud to work with Microsoft to deploy these Microsoft Online Services and bring our joint customers end-to-end managed services that really support their employees and add value. This combination helps us accelerate our response to client requirements for managed services as well as streamline our solution deployments.”
—Coen Olde Olthof
Vice President of Marketing, Portfolio and Alliances
“HCL is committed to Microsoft’s software-plus-services strategy and believes in offering customers the choice and flexibility in how they access and manage technology. This flexibility allows businesses to convert variable or unknown cost models into predictable cost models, while meeting security, compliance and scalability demands. Collaborating with Microsoft to offer software-plus-services strategies is part of our core Value Centricity message to our customers and complements HCL’s Business Ready Infrastructure end-to-end solution landscape.”
“We are excited at the opportunity to be closely affiliated with the Microsoft Online Services initiative. Our mutual customers are looking to get value out of their investment in both K2 and the Microsoft Business Productivity infrastructure, whether on-premise, in the cloud, or in a hybrid offering. We also see value in this offering for new customers who are looking to lower the costs of their infrastructure investments and accelerate their adoption of K2-based business process applications on the Microsoft platform.”
Vice President of Global Alliances
M3 Technology Group
“Recurring revenue is the Holy Grail for partners. Much of our revenue comes from one-time professional services engagements, so this is a great chance for us to extend our model and grow even faster. We look at the one-time 12 percent and recurring 6 percent Microsoft Online Services revenues as all upside.”
M3 Technology Group
“Partners that can offer on-premise, hosted and now online services hosted by Microsoft can offer the whole spectrum of services, reaching new customers and increasing their differentiation in the market. Microsoft Online Services will open up opportunities for partners to spend less time on traditional deployment activities and more time on their premium offerings. Partners will be able to refine their IP and make sure they’re spending all their time and money on their uniqueness.”
Chief Executive Officer
Mamut Software Ltd.
“The potential customer savings associated with the move to Microsoft Online Services provide for additional funds being made available to do more complete and more powerful solutions. Customers typically have a set IT budget, and the efficiencies associated with online services enable the customer to invest in creating more sophisticated and capable solutions. We will benefit from that investment, and the customer will greatly benefit from the improved scale and functionality. It’s a win-win.”
“PointBridge has historically been a project-based consultancy in the enterprise space, and as such our profitability has been driven by non-annuity-based business. Microsoft Online Services allows us to give high-value services to a broader range of customers, and the annuity revenue from Microsoft will be a great stabilizing force in our business.”
Director of Alliances
Susquehanna Technologies (SusQtech)
“Microsoft Online Services will dramatically shorten SusQtech’s sales cycle by taking the hardware, networking and licensing questions off the table, and allowing us to focus on our revenue-generating services such as training, customization and ongoing support. With Microsoft Online Services, SusQtech can now offer compelling business solutions to clients who either couldn’t afford the solution or whose project was ‘too small’ to warrant the sales effort on our part. Now we can drive the customer straight into a sale by offering smaller, proof-of-concept solutions that don’t require an upfront investment. Then the challenge is ours to convert these solutions into full engagements that require our expertise and services.”
“I can think of several occasions where we did not win a project because of slow deployment times. Microsoft Online Services mitigates that. This will accelerate the approval of and implementation of SharePoint Server. We believe there’s a great opportunity to cut sales cycles by 20 percent or more. The software-plus-services recurrent fees allow the partner to get compensated for influencing software-plus-services sale. This is a brand-new revenue stream for us and can become quite substantial.”
“Unisys sees a significant growth opportunity in the Microsoft Online Services partner program and the software-plus-services model. By adding Microsoft Online Services offerings to its extensive services portfolio, Unisys helps users remain current with the latest Exchange Server versions and updates, while effectively and efficiently monitoring and managing their IT budget.”
—Bart De Maertelaere
Vice President and Partner for Unisys Global IT Outsourcing Service Strategy and Portfolio Management