Microsoft Partner Initiatives, Pricing Take Shape

HOUSTON – Microsoft started its Microsoft Worldwide Partner
Conference 2008 with a series of announcements including a new pricing
and partner model for Microsoft Online Services, as well as other
announcements around the company’s effort to focus on a
software-plus-services strategy.

Indeed, during the opening keynote address, Stephen Elop, president
of the Microsoft Business Division, announced the pricing and partner
model for two new suites of subscription services as part of the
Microsoft Online Services family, which delivers software as a
subscription service managed from a Microsoft data center and sold by
partners. With Microsoft Online Services, customers have the option to
access messaging, collaboration and communications software over the
Internet. These services will be sold as a suite or as stand-alone
products with prices starting as low as $3 per month, the company said.

“Our vision is that everything you can do with our onsite servers,
you will be able to do with our online services,” Elop said. “For
partners, it’s about the differentiated value they can deliver on top
of our services, as well as providing them with an ongoing revenue
stream. There is incredible partner opportunity at every
level–integration, migration, customization, consulting services and
managed services."

Under the new business model, partners selling the two suites will
receive 12 percent of the first-year contract value with a recurring
revenue stream of 6 percent of the subscription fee every year for the
life of the customer contract, Elop said. Moreover, to help partners
get the guidance for discovery, enrollment and activation of the two
suites, a new program was announced called Quickstart for Microsoft Online Services.

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