Microsoft Woos Partners With Beefier Hosting Tools

Windows Server 2008 and its integrated component Internet Information Services 7.0, which are slated for launch next February, includes better security, scalability and reliability, all of which make life easier for hosting partners, according to van Dijken

Additional improvements come in the form of integrated health management for Web services, fast and scalable configuration, and delegated administration, van Dijken said.

Several hosting partners told CMP Channel that while they're excited about the new tools, Microsoft's entry to the software-as-service business -- the vendor already provides CRM, Microsoft Exchange Server and Windows SharePoint Services -- looms as a potential threat.

However, some partners believe they've found the right market niche to ensure that they're not going head-to-head with the world's biggest software vendor.

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For example, hosting partners can differentiate themselves from the competition -- and from Microsoft -- through solid back end data center infrastructure, customer service, and support, said Amir Hudda, CEO of Herndon, Va.-based Apptix, a hosting partner that provides Exchange, SharePoint, voice and collaboration services.

"We take it as a given that at some point in the future Microsoft will be offering all its core products in a service oriented model," Hudda said.

Dave Grantz, CTO of, an Albertson, N.Y.-based hosted mail provider, expects Microsoft to go after the higher end of the market, leaving the small and medium size portion of the market for partners. He thinks Microsoft's promotion of hosted Exchange could have a beneficial trickle down effect for partners.

"I think that Microsoft will target the largest of companies, and let us manage the small to medium businesses," said Grantz. "Small to medium sized businesses don't want to deal directly with Microsoft because they're not sure they can get the proper sales and support from such a giant entity."

Small and medium business want a specialist that can handle their business with a high level of effort and attention, which is another reason why partners are best suited to handle this end of the market, said Grant.

"We're not the giant [that Microsoft is], and we believe we can offer a level of customer service that they've never been able to offer," he said.

Rurik Bradbury, vice president at Intermedia.NET, a New York-based Exchange hosting partner, says despite partners' concerns over how software-as-a-service will be delivered, Microsoft has the right message and the right software to make it work.

"Microsoft has said their own hosting services are going to be fairly generic at first, and although they're going head-to-head with Salesforce on CRM, they're not going to get into lot of detailed customizations," said Bradbury.

As Microsoft pushes its channel partners to offer a mix of packaged applications and software-as-a-service, many are finding strong interest from their customers in having Exchange 2007 delivered in this way, said Bradbury.

"Exchange 2007 is difficult to deploy and is expensive, and companies are more willing to pay to not have to deal with the complexity," he said.