Microsoft dishes out tough message for cloud sceptics

Microsoft has warned resellers continuing to rely on traditional software delivery methods that they risk becoming marginalised as customers begin transitioning to the cloud.

Microsoft has warned resellers continuing to rely on traditional software delivery methods that they risk becoming marginalised as customers begin transitioning to the cloud.

This scare tactic is designed to recruit partners for its Business Productivity Online Services (BPOS) and comes after the US giant ran its first workshop to help partners understand how to transition their business to an annuity-based model.

Clare Barclay, director of partner strategy and programmes at Microsoft, said the majority of its efforts were being targeted at developing cloud technologies with some 90% of its engineers building online services.

"If partners continue to offer only on-premise that is their choice but they have got to realise that customers will start to go to other partners in order to provide those [cloud] services," she told MicroScope.

"A lot of new business models are starting to emerge, our role as a vendor is to point out that the market is changing rapidly and that customers are looking for advice from IT suppliers as part of the cloud transformation," Barclay added.

There are around 30,000 Microsoft partners in the UK said Barclay and she reckoned "thousands" were already selling BPOS.

However, according to distribution sources, reseller sales have fallen short of expectations and Microsoft is running workshops to address the fear factor; some resellers appear concerned about the impact that online service delivery will have on business.

One said "it is early days to be honest, we are still recruiting but it is a change for resellers. Managed service providers moved earlier but the classic reseller is still considering if they want to sell pay-as-you-go software, boxed or perpetual licenses."

Redmond is also expected to massively ramp the margins partners can make from BPOS to 12% at the start of next month in an attempt to entice more on board.

Barclay refused to provide sales figures for BPOS but argued: "Demand has increased significantly over the past twelve is the number one issue that customers are coming to us about."

She added that most deployments are fairly small scale at present and very few customers have decided to move wholesale to the cloud as they test certain applications, "most customers still going with mixed environment."

Thirty resellers were invited to last month's BPOS workshop and several said privately that Microsoft has whetted their interest but attendees signed a non-disclosure agreement and were unable to discuss roadmap details.

An announcement that CRM and Office 2010 will be available under BPOS in fiscal 2011 is expected at next month's Worldwide Partner Conference.

Barclay expected that "over time" all on-premise software will be available in the cloud, something that IDC has previously claimed.

Gordon Davies, CEO at Microsoft Gold partner Adeptq, said it had seen a "flood of new opportunities" from the cloud but warned adoption or the post purchase experience could be dampened by UK broadband speeds.

"Some areas have got such poor, business quality broadband coverage and its relatively costly, it is not unknown for the UK to pay two to three times as much as parts of Europe and the US," he said.

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Old new is just that: Old. Why are you offering up an article from 3 years ago, pondering what the future will be, when it's already here?