Microsoft’s ‘New’ Competition – Microsoft Partners?

July 21, 2008

As Onsite Computer modifies our marketing materials to include Microsoft’s Online Business Productivity Suite, we are discovering a plethora of Microsoft Partners who also offer online Exchange hosting services. At this juncture, the BIG differences between Microsoft’s offering and the partners’ offerings appears to be both price and product.  Some partners are offering Exchange Hosting only for ~$15/month while Microsoft is offering the entire Online Business Productivity Suite (i.e. Exchange Online, SharePoint Online, Communications Online, Office Live Meeting Online, and Exchange Hosted Filtering) for $15/month. Much to the chagrin of hosting partners, Microsoft is combining its Exchange and SharePoint Hosting for $3/month.

As Microsoft’s hosted app model takes shape and prepares for competition with Google’s hosted app model, some partners find themselves in a business strategy quandary. Microsoft’s hosted offerings are a much cheaper alternative to partner offerings. Some partners contend Microsoft’s entrance into the hosted app market is the beginning of the end for many partners. Google’s hosted app model does not have a middle-man. For Microsoft to compete with Google in the hosted app model, some suggest Microsoft will eventually eliminate its middle-man – the Microsoft Partner.

The cloud and hosted app industry is in its infancy.  As the competition increases, it will be interesting to note how the Microsoft / Microsoft Partner relationship changes.  In competition with Google’s model, without the middle-man, some contend Microsoft will eventually eliminate the partner’s role in hosting.  Last winter Microsoft changed its target market for hosted apps from businesses with > 5,000 seats to include all businesses.  Small businesses with less than 100 employees are the target market for most Microsoft partners offering hosted Exchange services.  If these changes are an indication of a trend, the partner’s share of the overall profit will continue to fall. 

As the software industry continues to mature, it is simply following the traditional business life cycle.  In the traditional business cycle, profit margins shrink as a business enters the mature stage.  The mature stage in any industry is characterized with the end of many of the small players.  Some contend most of the small players in the software industry are Microsoft Partners.  What do you think?

Change is inevitable.  According to Peter Drucker, we must embrace change or die.  In any competition, there are winners and losers.  At this point in the hosted apps competition the winners will be consumers.  The losers… What do you think?

If you’re searching for New Orleans computer service or repair of your Microsoft based system or network, then call the Microsoft specialists at 504-469-6991. Onsite Computer Services, Inc. in New Orleans

You may also be interested in Onsite Computer’s Blog.

This New Orleans On-Site Computer Service post was provided by Eli Lucas. Eli can be reached at eli@onsitenola.com. Onsite Computer serves the Microsoft computing needs of small businesses throughout the Greater New Orleans area including Uptown, Lakeview, Broadmoor, Mid-City, Metairie, Jefferson, Kenner, Westbank, French Quarter, and the Warehouse District. Please visit our website for New Orleans Computer Service.

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