Microsoft To Pay Partners For Office Live Referrals

Some 12,000 partners are in Denver to hear what's new from Microsoft, and so are ChannelWeb reporters. Our ace software team of Stacy Cowley, Rick Whiting and Kevin McLaughlin are all in Denver tuning in to the keynotes and walking the floors. Look for posts from all three of them right here in TalkTalk.

From Stacy Cowley:

Partners that build atop Microsoft's Office Live bundles of small-business-focused services will soon start receiving margins for their efforts, according to Marja Koopmans, Office Live's channel director.

In the first quarter of next year, Microsoft will begin paying an "affiliate fee" to partners that send business to Office Live by bundling Office Live into their own solutions, as several ISVs have done. For example, legal software developer Justia uses Office Live as the foundation of a practice management solution it sells through monthly subscriptions. Such partners will soon be rewarded through recurring referral fees, akin to the 10 percent fee Microsoft plans to pay out annually to partners who bring in CRM Live customers.

"Office Live is really a partner platform," said Koopmans, repeating a mantra Microsoft uses religiously when discussing its accelerating moves into directly serving customers through hosted, on-demand software services. "Partners will be able to monetize this through licensing fees, transaction fees, and subscription-based revenue models."

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Microsoft likes to throw around big numbers, and Koopmans came to WPC equipped. Officially launched in November, Office Live already has a base of 400,000 customers, representing a market opportunity Microsoft estimates at $150 million over the next 12 months. Half of the small businesses (10 or fewer employees) in major worldwide markets don't have a Web presence, according to Microsoft's research, and it's eager to sell all of them on the value of using Office Live as a jump-start.

Top executives at Microsoft are bullish about Office Live. In his opening keynote, Microsoft COO Kevin Turner predicted that within three years Office Live will be one of the most visible products in Microsoft's portfolio.

"It won't be Windows, but we believe it will reach our top three or four most-deployed applications around the world," Turner said.

Koopmans sees big upside for partners in providing verticalization and add-on services for Office Live customers. Where are the biggest opportunities? So far, the industries in which Microsoft is seeing the strongest Office Live traction are professional services, construction and real estate, Koopmans said.