No conversation about the rise of SaaS is complete without referencing the battle between Microsoft and Google for the productivity space. Microsoft has had worthy contenders to its crown as productivity software king in the past, notably Novell, Corel and Word Perfect, but it sent them packing. Google’s SaaS model for the cash cows of email, word processing and spreadsheets is the first to change the fundamentals of software delivery in a meaningful way.
After the initial hubris of ignoring an indirect channel, Google has sought to enable partners, many of which record the fastest-growing revenues in CRN’s annual Fast50 list.
“For businesses, moving to the cloud means a more simple, secure and affordable IT experience,” a Google spokesman says.
“It can also mean an increase in demand for services from the channel as people look for experts to help provide hands-on deployment or technical support.”
Google and partners such as Cloud Sherpas booked impressive wins last year including Woolworths, which shifted its 26,000 employees on to the SaaS platform to use Gmail, Google Calendar and Google Talk.
Microsoft, which ends its Telstra exclusivity for Office 365 in a few months, claims the cloud suite is the fastest growing commercial product in its history – worth in excess of US$1.5 billion a year.
Microsoft Australia channel director Dean Swan says Office 365 is just the most obvious wisp of the vendor’s cloud strategy that also includes Azure, Windows InTune and customer relationship management platform Dynamics.
“Locally, we’ve seen over the past 12-18 months a very sharp hockey stick in terms of adoption of Office 365 across the board from SMB to enterprise,” Swan says.
“Mobility is big – organisations, irrespective of their size, are trying to cater to a highly mobile workforce. People are able to work from home, their customers’ premises and whatnot and a big enabler of that are technologies in the cloud and unified communications. Office 365 offers all that.”
Microsoft research found its resellers that adopted cloud had profit margins and revenue growth 1.6-times and 2.4-times higher than traditional partners, respectively (some of that could be explained by the likelihood that many of those partners were start-ups).
For Microsoft partners looking to take on new business, Dynamics is the black horse in a race with cloud-based CRM industry leader, Salesforce, Swan says.
Another area where partners should focus their energy is on creating their own intellectual property (IP) or business processes as a service, such as insurance claims processing.
“The highest point of the evolution is IP services – value-based, unique IP that you build on a platform like Office 365 and you drive that out,” Swan says.
An IP strategy helped Paradyne, which was eighth on the 2013 CRN Fast50, carve a defensible niche for itself, says managing director Loryan Strant.
“It’s based around Office 365 deployment scenarios that allows us to work on more deployments simultaneously,” Strant says.
Sticking to Microsoft also works for Ensyst general manager, Nick Sone. “Our business strategy has been to align ourselves tightly with Microsoft,” he says. “We don’t have competitive offerings so we stay close to the incubation team and roadmap.”
Office 365 and hosted Exchange resonate with customers because they are a “commodity solutions” Sone says. “Azure resonates very well with customers for the same reasons. Storage is now seen as a commodity so it’s price per value.”
And even though the price per mailbox has tumbled to between $1-$2, Sone says the revenue is comparable to on-premise once other services are factored in: “It’s certainly not loss-leading.”
“Then we say to our customers, ‘If you believe we can add value once you’re in the cloud, we have our offerings of managed services around that’, which is charged on a per-environment basis.
“We understand the customer’s environment and charge a fixed-price managed service. So we can generate a very good value.
“And having the infrastructure in the cloud with a high service-level agreement gives us the confidence to know we won’t get too many support calls.”
Next: Reseller programs
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