Microsoft Partners Hungry For SaaS Details

As Microsoft prepares to hold its annual Worldwide Partner Conference in Houston next week, channel partners are hoping Microsoft will finally clarify how they'll fit into its software as a service strategy.

Microsoft's SaaS strategy, which it calls Software Plus Services, involves a melange of on-premise software and Web-hosted applications and gives customers the option of buying services hosted by partners or by Microsoft. At last year's WPC, Microsoft COO Kevin Turner said the transition to SaaS would be tough, but that Microsoft was commited to the services path, and partners should follow its lead.

This year, partners are hoping Microsoft will reveal nitty-gritty details on SaaS commission structures, how services will be sold in the cloud, and to what extent partner compensation will change in the Software Plus Services future. The fact that Microsoft hasn't yet offered this information has contributed to uneasiness in the channel, according to some solution providers.

"There's a general fear out there in the partner channel, and it stems from the fact that we really don't have a lot of good information," said Matt Makowicz, president of Endeavor Technologies, a Somerset, N.J.-based solution provider. "Microsoft knows they have to be very careful with their message, because like diplomacy, one wrong word at the wrong time can be taken the wrong way."

In March, Microsoft announced plans to sell hosted Exchange and SharePoint services to companies of all sizes, reversing an earlier policy of allowing channel partners to handle deals of 5,000 seats or less. Predictably, this news didn't go over well with channel partners already uncomfortable with the notion of Microsoft selling services directly to end users.

Ravi Agarwal, founder and Senior Executive Officer of groupSPARK, a Burlington, Mass.-based firm that offers private label hosted Exchange services, says the lack of information has been a legitimate source of concern for channel partners.

"Most partners are still in the dark because Microsoft hasn't done a good job of being proactive and sharing this information with partners. Even within Microsoft, this information hasn't been widely shared," he said.

But despite Microsoft's mixed signals on SaaS, Michael Sullivan, president of Quest Business Solutions, based in Dallas, is confident that Microsoft will clearly articulate the channel's role and come up with a SaaS model that's workable.

"You're always going to have some partners questioning what the next move is," Sullivan said. "But Microsoft is responding to what customers are demanding, and that's SaaS, and they're working hard to keep the channel in the game."

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