Microsoft Partners Hungry For SaaS Details

SaaS is a source of concern for some VARs who believe that centralized, standardized services will inevitably cut into their revenue streams. However, most VARs agree that with the appropriate model, there's a place for both partners and vendors to make money in SaaS.

For a company of Microsoft's size, though, coming up with a SaaS model that's acceptable to all partners is no easy task. "Pricing models are a really complex animal, which is why Microsoft has got so much work in front of them trying to figure out the price point for services," said Matt Scherocman, vice president of consulting services at PCMS IT Advisor Group, a Cincinnati-based solution provider.

Regardless of what Microsoft announces at WPC, some partners don't see a rosy future for the channel once Microsoft begins to flex its services muscle.

"Microsoft is replacing the thing that we are actually making money on. If you can't charge for pre-sales support, how do you make money when you're not going to be able to sell the product directly? I'm not going to promote services that help Microsoft take my clients away from me," said one solution provider and Microsoft Gold partner, who requested anonymity.

Another solution provider said the size and diversity of Microsoft's channel makes it virtually impossible for the vendor to come up with a one-size-fits-all SaaS strategy.

"I don't think it's possible for them to have concrete answers, because there are too many splits in terms of the interests of people involved. It's hard for them to say something that will please a lot of people, because they're being pulled in many different directions," said the source, who also asked not to be named.

Gavin Steiner, president of Interprom, a Microsoft Gold partner in Barrie, Ontario, says the only way for channel partners will have to generate a huge amount of SaaS volume to maintain a profitable business.

"Microsoft's pricing is going to be so dramatically low, and the attractiveness of services to customers will be so high, it's really going to be a battlefield out there," said Steiner.

Services has traditionally been an area in which partners have led, so for Microsoft to lead now will change the dynamics, which makes it all the more important for it to communicate details to partners at this year's WPC, Dave Sobel, CEO of Evolve Technologies, a Fairfax, Va.-based solution provider.

"Microsoft has been a good partner in the past, but with Google and other services on the horizon, I need to get better insight into their intentions, or else this goes from a partnership to something else," said Sobel.