Wednesday 14 August 2013

Microsoft Slaughtering It’s Own Cash Cow?

We in SMB IT have been hearing the Microsoft Cloud Drums for quite a few years now.

In the first year or two the call was along the lines of how great Microsoft’s new Cloud was to be and how we were all going to do well selling it.

Well, in SMB IT that pretty much fell flat on its face once it became apparent the SMB IT Provider was not be be billing the customer Microsoft was.

Plus, where was the SMB IT Provider supposed to fit in to the picture anyway?

The drums kept beating but the SMB IT Solution Provider did not listen.

Microsoft made some changes in their sales model for the Microsoft Cloud product line that allowed the SMB IT Provider to bill their clients, but uptake was probably very slow if at all.

Off to conferences and Webinars we go where “Partners” trumpet their great success selling Microsoft and other Cloud Vendor’s wares. How great their success was they were proclaiming but in the end we received a lot of fluff with little substance.

The drums are still beating today. However, they no longer beat for us to take up the call and sell Microsoft Cloud.

IMNSHO, they now beat the message to the end customer to avoid working with us altogether.

You don’t need the SMB IT Provider! You can do it all yourself! We’re making it really easy for you!

To be fair, Microsoft pushed really hard to get the SMB IT Provider on board with training and certification. They spent hundreds of thousands if not millions on getting us to on-board with the Small Business Specialist Community and the certification structures it required.

Those of us that took up to that beat, that is the SBSC and all it entailed, did really well and Microsoft took great pains to support us.

Unfortunately, in the end, the folks that drove Microsoft to create the SBSC and make efforts to bring things up to par kept on doing what they were doing: Giving Microsoft and other legitimate SMB IT Providers a black eye.

As much as the “Trusted Advisor” role has been poo poo’d by many behind the Cloud drum beating we are the ones that the SMB Business Owner will listen to over commercials, surveys, and Consumer Reports.

Yes, the ones responsible for the black eyes for both Microsoft and those SMB IT Providers doing the right thing will be the ones most hurt by their customers bailing away from the pain they’ve been in for however many years by adopting the Cloud over on-premises.

Why would those customers, that is the ones that have been repeatedly burned, trust us anyway? And why would they trust Microsoft to provide a Cloud service that say Google or Amazon may be able to do just as well if not better?

While we and our client population may not be in the majority as far as SMB IT, we do represent a substantial number of small to medium businesses and the directions they take with the IT infrastructure.

A sales driver within SMB is the excited Geek coming in with a new product that perfectly fits in to their client’s business model. In fact, the Geek would have a demo prepared that directly relates to _that specific client_ without even thinking about it.

That situation translates into sales. _Lots_ of sales. And business owners talk.

Perhaps I’m overestimating our worth here? Maybe I am but then again, maybe I am not.

The drums today are beating “You SMB Business go Cloud. Period.”

We are cautioning our clients that a hybrid approach may be a better rule of thumb for so many reasons. Think PRISM for one and the Patriot Act for another.

Now, given the Microsoft’s position for us is all-in for the Cloud one has to wonder how long it will be before Microsoft removes the “choice” in SME and Enterprise environments?

Meaning, how long before Microsoft makes on-premises a lot more expensive than their Cloud offerings to in effect remove that option?

Certainly the restructuring that has happened around a services model this new Microsoft fiscal year may indicate such.

Most certainly Microsoft is at a crossroads.

Depending on the tact they take over the next 12 to 24 months we could see a vastly different company down the road that may in fact be more like Apple was before it was bailed out or like RIM is today.

Drum beating the message and forcing us in SMB into a direction because as single units we are essentially powerless against them is one thing (though we’ve been seeing that we are not so powerless after all over this last year or so).

However, trying the same tact with SME and Enterprise businesses may well fall flat on its face.

No one person or business has ever liked being shoe-horned into an option.

If given no option by a vendor, then it is more likely that another will be found, or much to the possible surprise of Microsoft, and others before them, the business may carry on and/or build what is needed from within.

Most certainly changes are afoot and we need to be very aware of what is happening around us!

Philip Elder
Microsoft Small Business Specialists
Co-Author: SBS 2008 Blueprint Book

Chef de partie in the SMBKitchen
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Jonas Larsen said...

One word for you: Lync. They wont maybe make onpremises more expensive they already did :-( And by a huge percentage at that.

Anonymous said...

I've been reluctant about cloud over in-house. Call me a Dinosaur but I prefer in-house when it's done well. The company I work for is developing it's own data center so they can push all our existing clients to our cloud.

My take on this is if you sell and service something and do it well how is it the same business model as lease/lend.

Look at the car sale vs lease industry they both operate independent and can see they are different because they know only one option does not fit all clients.

Philip Elder Cluster MVP said...


While I don't keep track of Lync pricing it does not surprise me at all. Uptake on the product has been really good from what I understand.


That's the catch in this article. Folks that have _good_ IT on-premises have no real concern about moving to Cloud.

And yes, one does not hear that Cloud is Lease while on-premises is Own.

Excellent points! :)