When Microsoft Office 365 debuts today, the event may mark a symbolic turning point for Microsoft’s cloud strategy. Assuming Microsoft manages to keep Office 365 up and running, The VAR Guy expects the SaaS platform to be a hit with thousands of corporate customers that want familiar applications, mobile access from multiple devices, and predictable monthly costs. But will VARs really, truly profit from Office 365? Hmmm…

Microsoft has “bet the company” on major product launches before – Windows 95, Office 95, Windows NT Server 4.0, etc. But those prominent launches were about accelerating Microsoft’s growth – with a major assist from the channel.

In stark contrast, the Office 365 launch is about rebooting Microsoft for the cloud age and competing against Google. For the first time in a long time, some pundits think Microsoft is an underdog in the software market.

Microsoft hopes Office 365 tips the balance of power back towards Redmond, Wash. For a deep dive, check out this Office 365 FAQ on TalkinCloud (The VAR Guy’s sister site). In short, Office 365 replaces Microsoft BPOS (Business Productivity Online Suite), which suffered multiple cloud outages over the past year. During the BPOS era, Microsoft couldn’t even figure out how to deliver Exchange 2010 as a reliable, broadly available service… forcing BPOS to mostly promote the older Exchange 2007.

Why Customers Will Embrace Office 365

Still, the Office 365 strategy sounds promising to The VAR Guy because:

  1. It’s the right brand: Tried and true Office, apparently reinvented and promoted for the cloud age.
  2. It’s the right time: Office 365 arrives shortly after Amazon, Sony and other cloud providers suffered outages – a lucky break (at least for Microsoft…) that could make customers a bit more patient as Microsoft works to strengthen the reliability of its own cloud services. Meanwhile, a lot of small business customers have grown up using SaaS applications and may never buy on-premise servers.
  3. It’s the right product mix: Exchange Online, SharePoint Online, Lync Online, Office… Corporations continue to consume those applications on premise, and now they’re looking for SaaS alternatives. Office 365 could fulfill that need.
  4. It’s the right price point: Small businesses will pay as little as $6 per user per month. In some situations, the cost starts at $2 per user per month. Corporations that consume every application will pay as much as $30 per user per month – a significant cost but still within the realm of well-known SaaS applications like Salesforce.com, NetSuite and others.

What About the Channel?

So where do channel partners fit into the conversation? It depends on whom you ask. The VAR Guy believes Microsoft’s channel partners have broken off into four different camps amid Office 365’s arrival.

Microsoft claims to be fully channel focused. But it’s clear the channel is no longer fully focused on Microsoft. Some partners are indifferent as Office 365 debuts. Others lament Microsoft’s failure to let partners control cloud billing to end customers. Other partners are signing up to partner with third-party service providers – companies like Apptix or Intermedia – for hosted Exchange services.

The bottom line: Assuming Office 365 runs without any major hiccups, The VAR Guy expects the cloud suite to enjoy widespread adoption. But our resident blogger is having a difficult time trying to predict how many channel partners will truly profit from Office 365.

Still, Office 365 will certainly cross paths with VARs and MSPs who support SMB customers. How much money will partners make supporting Office 365? That question remains unanswered.

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5 Comments on “With or Without Partners, Office 365 Will Be A Hit”

  1. Mitchell Cipriano Says:
    June 28th, 2011 at 1:09 pm

    I think Office 365 will find success in larger businesses and the enterprise. For the SMB, I believe Google Docs/Apps offers a better solution. It is less costly and seems more integrated. The real shocker is that Google seems to have a better defined role for the channel than Microsoft. It will be an interesting development to watch.

    Mitchell Cipriano
    http://www.demandbydesign.com

  2. The VAR Guy Says:
    June 28th, 2011 at 1:37 pm

    Mitchell: Generally speaking The VAR Guy agrees with your point about Google having a better-defined cloud partner program than Microsoft.

    Ironic, eh? Background for readers: Microsoft has done a lot of things right with Office 365. But The VAR Guy felt somewhat insulted when Microsoft told our resident blogger that end-customer cloud billing capabilities might be too complex to develop for partners. Google offers such capabilities. As do dozens of additional cloud service providers…

    For more on Office 365 and the potential channel implications, check out an Office 365 FAQ posted on TalkinCloud (The VAR Guy’s sister site).
    -TVG

  3. Anita M Says:
    June 28th, 2011 at 8:27 pm

    Assuming your able to receive email within a few hours of it being sent. Fine tuning that one little thing will make a big difference. I had to mention this because I wasn’t able to submit a service ticket today about problems with email receipt.

  4. Anita M Says:
    June 29th, 2011 at 8:46 pm

    Today I sent myself a test message from Gmail to Office365 Enterprise(Exchange Online) and it arrived with “Lightening Speed!” That’s a very good sign.

  5. The VAR Guy Says:
    June 29th, 2011 at 11:52 pm

    Anita M: The VAR Guy thanks you for the updates. Please keep our resident blogger posted as you test Office 365 services. -TVG

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