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Windows 10 roadmap: Plotting a path to partner revenue

Channel partners seek to take advantage of Microsoft Windows 10 opportunities in upgrades, project services and managed services

In many ways, Windows 10 provides partners with a similar opportunity to that of previous Microsoft OS upgrades -- but it doesn't end there. The much-awaited OS is poised to open new doors to higher-value opportunities, according to industry participants. So, there's no time like the present for partners to think about a Windows 10 roadmap to leverage those opportunities for their business and their customers' business.

While partners don't expect a cavalry charge to the new OS this year, they do expect the uptake of Windows 10 to be broad and more evident in 2016 and beyond. Forward-looking partners see the writing on the wall and are devising a strategy to capitalize on Windows 10.

Softchoice, a North American IT solutions and managed service provider, is one of these partners. According to Chris Woodlin, director of Microsoft business development at Softchoice, Windows 10 means two things to the company's business: the first relates directly to opportunities connected to the desktop OS; the second relates to a broader overall cloud transformation the partner helps customers make and includes the utilization of Office 365 and Microsoft Azure as well as non-Microsoft cloud technologies.

"We do see Windows 10 as a key piece in a longer term migration to all things cloud as Windows 10 makes cloud computing more possible and expansive," he said. The partner, based in Toronto, was a multiple award winner at this year's Microsoft Worldwide Partner Conference (WPC).

Industry experts agree that the most basic Windows 10 opportunity for partners is helping customers with upgrades. Customer upgrades to Windows 10 reflect similar past OS upgrade opportunities -- i.e. XP, Vista, Windows 7 and Windows 8 -- although partners agree that the adoption of Vista and Windows 8 was low.

According to Woodlin, healthy customer demand for Windows 7 fueled his company's services pipeline for a couple of years. "That included preparing the customer's environment, including legacy applications, for the new desktop operating system," he said.

Anurag Agrawal, CEO and analyst at market research firm Techaisle LLC suggested the first step in a partner's Windows 10 roadmap is to understand and analyze its customer base to clarify what percentage of customers are running which OS.

"Identify the low hanging fruit and where they should address customers first," he said.

Expect to find two different types of customer needs: the first is identifying where there's a need for a PC refresh; the second is to utilize a volume license to do customer OS upgrades.

The latter Windows 10 upgrade opportunity opens up additional opportunities, such as application compatibility testing, that translate to billable consulting hours. "Application compatibility is one of the major pain points of a business," he said.

The first step in a partner's Windows 10 roadmap is to understand and analyze its customer base to clarify what percentage of customers are running which OS.
Anurag AgrawalCEO, Techaisle

While Microsoft has made an all-out effort to ensure application compatibility with Windows 10, it doesn't hurt for partners to make sure that all of a customer's applications run on Windows 10 by running validation checks and providing remediation where necessary.

"By going through an application inventory, compatibility check and remediation cycle, we're also helping customers identify a big chunk of applications running on the desktop today that probably don't need to be carried over to the new operating system because they're redundant or because there's a lot of junk there," Woodlin said. He also noted that many applications have been converted to software as a service or are delivered via a browser, which means fewer customer applications are glued to the desktop today.

Industry participants report a pent up demand for Windows 10 after the lackluster uptake of Windows 8. Many organizations have been on Windows 7 for half a dozen years or so and partners contend that the time has come to modernize the desktop.

"By itself, Windows 10 has a lot of appeal to the enterprise customers," said Woodlin.

Consumers and business users weren't thrilled with Windows 8, but Microsoft has made the OS cool again with Windows 10, he offered. "It's very intuitive, it includes a lot of services that consumers will immediately understand and start to benefit from and users will want their IT departments to upgrade to Windows 10," he said.

Industry participants agree that the consumerization of Windows 10 will drive adoption in the workplace -- perhaps faster than otherwise expected.

Adoption of Windows 10 goes hand in hand with selling devices and accessories, especially for partners who at their core are resellers. Microsoft projected that the average device and accessories revenue opportunity for partners is $5,000 to $25,000 per customer in a typical small business practice, or 5% margin.

Project services, managed services on Windows 10 roadmap

Despite the fact that Microsoft has reportedly made Windows 10 deployments easier, will offer as a service upgrades, and is testing many applications for compatibility, enterprise deployments still need to be configured to a company's unique requirements and there are still many applications that need to be tested.

That's why project services and managed services are two additional practice areas where partners can go deeper with their customers following a Windows 10 deployment to generate revenue.

Project services, which Microsoft estimated to be a $2,500 to $15,000 revenue opportunity per small business customer with margins at 35%, may include deployment; identity, access and information protection; desktop virtualization; and cloud readiness.

There's also a long list of managed services that MSPs can offer customers: cloud services, critical response support, device monitoring, antivirus and hack checks, data breach monitoring, proactive backups and monitoring, performance and app monitoring, security management and identity protection, mobile device management and network monitoring, for example. Microsoft estimated the average managed services revenue at $2,500 to $7,500 per customer with margins at about 45%.

Vitalyst LLC is an IT services company that specializes in software coaching for Microsoft OS and Office applications as well as more than 120 other core office applications. The partner, which also offers managed help desk services, has been through many iterations of Microsoft's OS and Office applications upgrades.

Nick Wilkinson, CEO at Vitalyst, said the company is ready for Windows 10 coaching with training, classes and webinars. While the new OS presents users with a moderate amount of change, it's not drastic for users. What will have an impact on his business is the as a service, or continuous, upgrades for Windows.

"With that trigger [new version upgrades] going away, the technology is not going to sell itself anymore. We're all going to have to be very focused on the business goals and the value of what we're bringing forward," he said.

In the case of Vitalyst, when the big version upgrades go away and the fork lifting of moving from one application to another goes away, end users could become masters of the software they use. That's not the case today, according to Wilkinson. "According to our research, one in 10 users grade themselves as masters of the software they have to use," he said.

The continuous coaching model used at Vitalyst becomes more relevant in this new climate, the CEO contends. "We see the benefits across the board: Individuals benefit by knowing the software and are more likely to use it; being more proficient means greater job satisfaction," he said. Taking that a few steps further, better-trained individuals mean more productive, motivated and innovative groups that ultimately benefit the company.

Woodlin sees Windows 10 opportunity in the line of business, i.e. sales reps armed with Windows 10 on Surface devices. "I expect we'll see a lot more of that in retail and other consumer services," he said.

The opportunity for systems integrators then is to map a business process against a customer interfacing solution that sits on Windows 10. "That's the direction we're going -- more business consulting," he said.

To date, Softchoice's pedigree has been in designing customer infrastructure around Microsoft products such as Exchange, Active Directory and System Center. "But we're discussing how the evolution of our Microsoft practice will include more consulting with the business and not just IT," he said.

Finally, for independent software vendors (ISVs), packaged intellectual property for Windows 10 is potentially the highest revenue generator. Opportunities here include automated monitoring, preconfigured dashboards, and turnkey business intelligence portals, to name a few, noted Gavriella Schuster, general manager for Worldwide Partner Group at Microsoft. According to Microsoft, the average revenue opportunity for packaged IP is between $2,500 and $7,500 per user, or margins of 65%.

Windows 10: Roadmap includes IoT

Multiple sessions at WPC 2015 addressed Windows 10 and partner opportunities, whether the partner is an ISV, reseller, systems integrator or OEM. Microsoft has also made available a Windows 10 learning series, or Learning Paths, that maps out opportunities for partners. Some examples of the content: Windows 10 for Internet of Things (IoT), Windows 10 for your applications, and Windows 10 for your services practice, to name a few.

Training resources are also designed to help partners have the Windows 10 conversation with their customers, according to Schuster. Partner content is housed in the Microsoft Partner Network portal.

"We also gave partners internal use rights for the Windows 10 Enterprise Edition. This lets partners get much deeper on the things they can do for their commercial customers to help them really exploit all of the capability of Windows 10," she said.

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