Microsoft Exec: No Plans For SMB Direct Sales SAAS Offensive


"We are absolutely committed to delivering software plus service through channel at all levels and we will be working with channel," said Deshaies in an interview at the XChange conference. "We will have a model that partners will be able to sell software plus services through the VL (Volume Licensing) model that exists today. And the details around how will be laid out at a future date. But we will absolutely go into this with a partner centricity to it."

Deshaies' pro-partner SAAS comments come with fears on the rise that the software giant had changed its sales strategy bringing it into conflict with channel partners who resell Microsoft's web hosted applications to SMB customers.

The channel conflict fears arose after Microsoft Chairman Bill Gates last week told technical conference attendees at the annual SharePoint conference that the company would make its Microsoft Online Services available to businesses of all sizes. This after Microsoft said last year it would offer the Microsoft Online Services portfolio to customers with 5,000 or more seats and let its channel partners sell hosted applications to smaller businesses. The online services include the Web hosted versions of Exchange, SharePoint, Office Communications and Office Live Meeting.

"There has been no official change in sales policy," said Deshaies. He said Microsoft will allow solution providers to resell Exchange, SharePoint, and Office Communications online services "as part of their offerings to customers. I don't care if it is 100 seats or 500 seats. Partners will play in this game."

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Deshaies said the Gates' comments around Microsoft's online services sales engagement were "taken out of context."

"This is basically talking about us being able to bring software plus services down to the broader stream of customers," he said. "It is not just relegated to the enterprise 5,000 seats and above and details around how we are going to do that with channel to customer will be forthcoming."

"We will sell to customers under the 5,000 seat space with partners," said Deshaies, noting that Microsoft plans to give specific details on its software plus services initiative at its worldwide partner conference in Houston on July 7-10.

Deshaies said he did a roundtable at the Xchange conference and partners are not worried about the software giant going direct with software plus services. He said partners are anxious to hear about the economics of software plus services and how "they are going to play within their business. But they didn't express any anxiety that we were not doing this with a partner centric model."

Deshaies said Microsoft has already been working with more than 700 partners as it builds the sales model around its online services to assure a "good economic framework and proposition for partners to sell to customers with Microsoft."

Deshaies said Microsoft has repeatedly reassured partners that they will be able to resell the online services through the volume licensing sales model. "The whole interpretation should be: Microsoft still partner centric, still going to market to customers with partners," he said.

Keith Nelson, vice president of technology for Vistem Solutions, an Irvine, Calif. solution provider, said he was not concerned about Microsoft making a direct sales push with its online services offerings into the SMB. "I don't think Microsoft can get into that market on its own," he said. "If it was major enterprises I'd be concerned. The small business doesn't want Microsoft running their IT (information technology)."

Nelson said small business customers are not likely going to trust Microsoft with their Exchange email and SharePoint data. "You can make a case as a customer do you want your email, which is your customer list, possibly mixed in with your competitor's data," he said. "For most companies their email is their customer list. They are not going to give that up to Microsoft."

What's more, he said there are security concerns which Microsoft is going to have an obstacle overcoming if they try to take that small business online services business direct.