MSPs: Microsoft online services are no threat to partners

Managed service providers (MSPs) predict customers of the new Microsoft online services will prefer to do business with them instead of with Microsoft directly, because Microsoft can't offer the same level of service.

Some managed service providers (MSPs) have said they see more opportunities than challenges in the new line of Microsoft online services.

Both Microsoft and its partners can host and manage the online services, which include versions of Office, Exchange, BizTalk Server and other popular Microsoft products.

When he heard about plans for Microsoft online services, Bob Longo's first reaction was fear. "It was flat-out fear," said the managed services director for ClearPointe Technology, a Microsoft Gold Partner in Little Rock, Ark. "What does that mean to us, and what does that mean to the MSP industry?" he asked.

But after working with Microsoft for more than a year on a hosted Microsoft Operations Manager (MOM) project -- ClearPointe uses MOM to manage its network operations center (NOC) for partners and clients -- Longo said that fear has subsided, and he doubts Microsoft's services push will ignore partners.

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"They were very willing to adjust their product to make it very MSP-friendly," Longo said.

Most customers, in fact, will choose to work with partners, because Microsoft is too big and they may not trust the company to handle their sensitive data or manage their complex systems, according to Charles Weaver, co-founder and president of the International Association of Managed Service Providers (MSPAlliance).

"There's no way [Microsoft] would be able to replicate the intimate relationship that these consumers have with their existing service providers," Weaver said. Instead, he predicts that Microsoft's main role will be to host the services, while partners will have new opportunities to manage the services for clients.

The new Microsoft online services, announced Sept. 30, fall into two categories: Live and Online. Microsoft said it designed its Live services for "individuals, business end users and virtual workgroups," while the Online services are for more advanced business needs. Specific services include Office SharePoint Online, Office Communications Online, BizTalk Services and Dynamics Live CRM.

Microsoft will also offer Exchange Online, a hosted version of its Exchange email server. That's one example of a service where customer concerns about trust and Microsoft's size may pop up, Weaver said.

"My questions would be, what does Microsoft understand about sensitive data? What do they know about the Federal Rules of Civil Procedure?" he said.

The fact that customers can choose to subscribe to Microsoft online services directly or through partners has led some to ask whether Microsoft is committed to services or is just putting a proverbial toe in the water.

It's unlikely that services will ever become Microsoft's core business, according to Longo, who said he is optimistic that Microsoft will make a commitment to supporting its MSP partners.

"Microsoft makes money selling software," Longo said. "I'm not sure they'd be able to prove to their shareholders that they'd be successful selling services, except services that drive software sales."

A Microsoft spokesperson was not available to comment for this story, but the company provided a written statement that said, "Microsoft Online will rely on an extensive ecosystem of partners to provide resale, technology planning, licensing, customization, migration and maintenance services for customers who may opt for the hosted model."

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