At the Microsoft Worldwide Partner Conference in Houston this month, attendees received new details about the software giant's push into the realm of SaaS (software as a service).
Tailored to meet the needs of an entire workforce, the Microsoft Online Services platform is designed to delivers enterprise-class software to businesses of all sizes -- from employees using a PC infrequently to information workers in need of more advanced capabilities, said Stephen Elop, president of the Microsoft Business Division.
"Microsoft Online Services is a key component of the software plus services initiative, and we're seeing customers, partners and even competitors embrace this flexible approach to the cloud," Elop explained. "Our vision is that everything you can do with our on-site servers, you will be able to do with our online services."
An Online Smorgasbord
The Microsoft Online Services lineup, which will be hosted by Microsoft and sold through partners, includes Microsoft Exchange, Microsoft Office SharePoint, Microsoft Office Communications, Microsoft Office Live Meeting, and Microsoft Dynamics CRM. The smorgasbord of enterprise-class applications is being made available under two separately priced software suites. Customers will also be able to subscribe to individual service components a la carte.
Microsoft's Business Productivity Suite for information workers will deliver enterprise-class communication and collaboration software as a subscription service. The suite integrates Dynamics CRM and Exchange e-mail and calendar capabilities with Office SharePoint and Live Meeting conferencing for $15 per user, per month.
The second suite, called Deskless Worker Online, incorporates online versions of Exchange and SharePoint and will be offered to businesses of all sizes for $3 per user, per month. The suite will include Outlook Web Access Light for corporate e-mail along with easy access to SharePoint portal and team sites and search functionality -- including read-only access to company information on policies, training and benefits.
Microsoft is clearly hoping its partners will see Microsoft Online Services as an opportunity for them to attract customers and boost sales. To sweeten the deal, partners that sell Microsoft Online Services will receive a recurring revenue stream for as long as their customer subscribes to the services, Elop said.
"For partners, it's about the differentiated value they can deliver on top of our services, as well as providing them with an ongoing revenue stream. There is incredible partner opportunity at every level -- integration, migration, customization, consulting services, and managed services," Elop said. "Microsoft Online Services provides stability and an opportunity to create long-term customer relationships."
Partners selling the suites will receive 12 percent of the first-year contract value, with recurring revenue of six percent of the subscription fee every year for the life of the customer contract. So partners could receive up to 18 percent of the subscription value in the first year.
"The success of Microsoft Online Services depends on the partners that sell, customize and provide consulting, migration and managed services for customers," said Allison Watson, corporate vice president of the Microsoft Worldwide Partner Group. "Partners will have a tremendous opportunity in the mid-market, where customers can get enterprise-class software delivered on a predictable, pay-as-you-go basis."