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Is Microsoft Missing the Point of the Channel?

It has been one launch after another as Microsoft hurls software-as-a-service missiles at companies such as Google and others. It started with expanded offerings under Office Live and now has culminated in the announcement that Sharepoint, Exchange and other products will be added to the barrage. While Microsoft must take on Google to ensure its […]

Written By: Frank Ohlhorst

Mar 3, 2008

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It has been one launch after another as Microsoft hurls software-as-a-service missiles at companies such as Google and others. It started with expanded offerings under Office Live and now has culminated in the announcement that Sharepoint, Exchange and other products will be added to the barrage.

While Microsoft must take on Google to ensure its long-term market dominance, the company is glossing over the fact that its new tactics will have a lot of collateral damage, or worse yet – Microsoft’s partners will be hit with friendly fire. The sad part here is that Microsoft doesn’t even realize that. Take a look at one of its latest press releases, “Partners Embrace Huge Opportunities in Software plus Services Era,” and it becomes clear that Microsoft thinks it is helping the channel by offering software direct to the business user!

The simple fact of the matter is that Microsoft is on the verge of offending its army of channel partners with the misconception that just because the company has SAAS offerings, the world will beat a path to its door. What Microsoft has missed here is that most solution providers are looking to increase their own revenue streams, build ongoing revenue and establish long-term customer relationships. Microsoft’s approach is to throw the meat on the customer’s table and let partners scrounge around on the floor for scraps.

If the company wants to truly trump Google, it is going to have to leverage its channel partners – instead of making the same mistakes that Google is by alienating the partner community. How can Microsoft build its success via the channel? Simply put, allow channel partners to sell those SAAS solutions, allow channel partners to handle any billing associated with those SAAS solutions and allow channel partners to co-brand those SAAS solutions. The co-branding element should be a no-brainer; instead of offering Microsoft SharePoint Online, a partner could offer “PartnerNameHere’s SharePoint Online powered by Microsoft.” That will keep the partner’s name in the mix, establish who owns the client and build that long-term relationship that solution providers need to survive today.

As for the billing, support and other elements, I’m sure a company such as Microsoft could whip up something real quick and work with its current stable of distributors to make that happen. Microsoft may be launching missiles at the competition, but figuring out how to work with the channel doesn’t take rocket science.

Is Microsoft Missing the Point of the Channel?

Frank Ohlhorst

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