After years of threatening to become a computing anachronism, Microsoft is transmogrifying into a cloud services provider with a strong focus on mobile marketing.
Earlier this year, the tech giant put the finishing touches to its Windows Phone 8.1 OS, and promised delivery to consumers by ‘Summer 2014’. They’ve already begun integrating Nokia’s smartphone business, and shares have gone up by 25% since the appointment of new CEO Satya Nadella five months ago.
On the face of it, Microsoft is finally joining the cloud/mobile party that’s been in full swing since the turn of the decade. It’s been a long time coming, and competing with the likes of Google and Apple will be a tough road aho.
Critics have lambasted Microsoft for its reticence regarding the obvious consumer appeal of cloud computing, but their strategy has become more focused on Nadella’s watch, with the professed ‘cloud first, mobile first’ philosophy at last gaining credibility.
In particular, the firm has begun to recognize the need to give partners more control over the cloud services they resell. They recently announced the implementation of the Microsoft Cloud Solutions Provider program, which grants affiliates who resell products like Office 365 and Windows Intune greater control of billing and customer service tools. Says Phil Sorgen, Executive Vice President of Worldwide Partnerships:
“It fundamentally enables our partners to own the customer relationship.”
The program will expand gradually until it covers all MS cloud services. It certainly appears that Microsoft is offering the right incentives to partners. They are waiving the first year fee for new registrants wanting to sell Azure and Office 365, and increasing the number of internal use rights licenses by anything from 25 to 200 percent. Even their traditional on-premise software products are getting a 10 percent price slash for partner programs.
The jury is still out on whether this cloud and mobile marketing strategy will pay off for Microsoft. With hundreds of thousands of partners out their, the challenge is to meet the needs of a vast, heterogeneous group with extremely diverse priorities. Not all of them are thrilled at the way the wind is blowing.
Many long-time resellers and integrators will find themselves struggling to adjust their models to cloud-based services after years spent building business around on-premises Microsoft software. For one thing, on-premises deals are usually made with a one-time payment, whilst cloud services are sold by subscription. The latter generates recurring revenue streams – but the size of the deal tends to be smaller.
But Microsoft have realized that focusing on the future is the only way to ensure long term prosperity. Their attentions are pointed at the ‘born in the cloud’ generation of entrepreneurs who have never used on-premises software. For them, Microsoft’s evolution can’t happen quickly enough.