COMMENT | It is no secret that Microsoft has been throwing its weight behind an overwhelming marketing push towards its suite of cloud products. How will this impact the IT professional of today, who has spent the past decade specialising in the Microsoft enterprise product suite?
If we, as IT professionals, do not adapt, many of us will become redundant. These roles include system administrators, system engineers, database administrators, messaging administrators, directory services professionals – the list goes on.
Additional skillets such as enterprise voice will also be impacted as Microsoft expands its cloud platform and signs new contracts in Australia with PSTN carriers such as Telstra. Specialised engineers, such as voice and collaboration specialists, will begin to feel the pinch with fewer opportunities in the marketplace as companies begin to adopt voice services in the cloud.
How do Microsoft partners make money from the vendor's cloud solutions? There are four channels for Microsoft partners to generate revenue from the cloud platform:
- Reselling
- Project services
- Managed services
- Packaged IP
Reselling is a cut-throat game and customers can always find a partner that will on-sell Microsoft’s cloud products at a cheaper rate, shredding any hope of profitability. If this is your game, you will not survive in Microsoft’s cloud future.
Project services create new opportunities for partners to migrate customers to Microsoft’s cloud platform. This will generate one-off projects that will keep many of us IT professionals busy in the short term, but upon completion, will result in lack of ongoing work such as future infrastructure upgrades.
Then there are managed services. While this area has been promoted to Microsoft partners as a new opportunity, providing IT support to our customer’s user base is already a core revenue stream for most partners. This will continue in Microsoft’s cloud future, however, we will lose out on the server work.
Packaged intellectual property (IP) provides the best method for being profitable from Microsoft’s cloud platform. Here, partners create software that addresses an industry requirement to meet a specific business purpose and deploy it to customers on Microsoft’s cloud platform. This allows companies involved in software development to go to market faster and reduces costs associated with deploying their solution to potential customers.
While the cloud creates lucrative opportunities for Microsoft partners in the field of software development and innovation, it removes the requirement for IT professionals resulting in Microsoft partners filling the role as “the giant service desk for the cloud”.
Partner clouds
Many partners have built their own multi-tenant platforms utilising Microsoft’s current product offering, including Skype for Business, Exchange and SharePoint and are moving their current customer base into their own “private cloud”. The problem with this model is low profitability due to expensive programs such as Microsoft Services Provider License Agreement (SPLA) and partners competing with services that Microsoft can provide at a fraction at the price.
The only thing partners have going for them by building a private cloud is stickiness with customers. Once a customer’s data is moved to a provider’s private cloud, it is very difficult for customer to move.
To negate the effects of the private cloud models, Microsoft employees announced during the 2016 Microsoft Australian Partner Conference that the 2016 release of products including Microsoft Exchange, System Centre product suite, Skype for Business, SharePoint, SQL Server and Windows Server will be the last official release.
Sufficient support maintenance services will be provided to businesses, allowing adequate time to migrate remaining servers onto Microsoft’s cloud platform before the support plug is pulled and customers are forced to move. Despite Microsoft’s plan, I wager that demand for on-premises deployments will not go away, and that the software conglomerate will still be required to provide commercially available, on-premises versions of its software moving forward due to sheer demand.
As a Microsoft partner, what can you do to ensure you are not out of work with the adoption of the Microsoft cloud? The most important thing is to diversify your skillset into areas that will not be impacted. Two areas I believe to be are safe investments are:
- Routing and switching: all businesses will need network connectivity to cloud infrastructure.
- Software development: developers will always be required to design and create innovative solutions for businesses in the future.
Unfortunately, this will mean that as people go through the process of reskilling, the areas of expertise not impacted by cloud will become saturated. This will lead to strong competition – so make sure you or your company specialises and stands out from the crowd.
Like Judgement Day in the Terminator series, the cloud is inevitable. It can't be avoided. However, I believe it will take another five to seven years before we see the full effects of cloud in the industry and the impact it will have on people working in the field of information technology.
It will also take time before the Australian government and organisations in both private businesses and the public sector build confidence in moving sensitive information to a public cloud due to privacy concerns. In a situation breeding uncertainty, only one thing’s for sure – there are interesting times ahead for IT professionals who specialise in Microsoft’s suite of server products.
Clint Boessen has been consulting in the field of enterprise messaging and directory services for over 10 years. He is recognised as a Microsoft MVP and works for a consulting firm called Avantgarde Technologies that provides IT services and IT support to organisations based in Perth, Western Australia. Visit Avantgarde Technologies.
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