Microsoft to its hosting partners: Get ready. Here we come

From a recent Mary Jo Foley blog post:

At its Worldwide Partner Conference in Denver this week, Microsoft officials are trying to walk the tightrope when it comes to explaining Microsoft’s plan to get into the managed services business in a major way.

Microsoft officials have made no bones about the fact that Microsoft is planning to offer a Microsoft-hosted version of services around all of its major products. Already, it’s out there selling desktop-management, Exchange, SharePoint, CRM Live and other managed services.

At its gathering of 12,000 partners, company officials are attempting to assuage fears that Microsoft will simply steamroll partners who already are selling hosted Microsoft services.

Microsoft’s message: Partners need to change. (The unwritten part: Or get the heck out of the way.)

Some hosting partners are counting on Microsoft targeting only the largest customers and leaving them the mid- and smaller-sized businesses. If history is any indicator, however, Microsoft won’t limit itself.

Will hosting partners buy into Microsoft’s messaging? Or will Microsoft’s managed-services rollout be the straw that breaks the camel’s back?

This is interesting for a couple reasons. The first is that it should serve as a reminder that Microsoft has historically been a good partner only as long as the relationship is beneficial to them. Sure, when things are going well it seems like a fantastic setup. After all, you have an industry behemoth behind you. That’s the funny thing about being taken under the wing of a dragon: it’s warmer than you think. The problem is, when that dragon gets hungry, it’s often the cozy partners that end up burnt. I keep hoping the Microsoft will change. I want them to – I think we all do. I think they will, in fact… it will just take time. This should still serve as a warning to other partners and potential partners.

Now, while this move is not good for current hosting partners, who may join the crispy remains of some previous partners, I think this may be the beginning of a new push for Microsoft. One that potentially leads to Open Source. You see, once Microsoft groks that when you are continually providing value via services (as opposed to providing lock-in as they currently do) that customers actually want to pay you, it could lead to the fundamental paradigm shift that will be needed to change the company culture. I still maintain that can’t happen with the current leadership, but this move could be the real beginning of the shift. A stretch? possibly. A chance? Most definitely.

–jeremy

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