Service provider Microsoft balances IT and partners

After dancing around its plans for business customers for some time, Microsoft has clarified its software as a service strategy. But there are still issues to resolve.

Although many traditional IT shops are still antsy about using software as a service, there is definitely a growing interest.

Now that Microsoft is in the SaaS game with its own strategy, the question for some entities is just how well the company will handle the delicate balance between giving customers what they want and need and pleasing its partners.

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Earlier this week the software company released a roadmap that puts its services in two buckets – "Live," which is designed for individuals, business users and virtual work groups; and "Online" services, which is aimed at corporate users with more than 5,000 seats and more sophisticated IT requirements.

Microsoft's Online Services for Business is available today and includes services for Exchange, SharePoint and unified communications. It did not release pricing, but the company said it would sell it per seat per year. Google Inc.'s Apps Premier Edition is a bundle of business applications that sells for $50 per seat per year.

The company's reluctance to offer public pricing may have to do with the complicated relationship it has with its partners – something competitors like Google don't have to worry about. "They feel compelled to support the resellers so they can't publish pricing," said Steve Bryant, a Microsoft Exchange MVP and managing technologist at C2 Systems, a Peachtree City, Ga.-based reseller and integrator.

Separately, Microsoft said this week it will offer an asset inventory online service through its System Center brand. The asset inventory service is a hosted client that allows software to be installed on a PC. The PC then registers and reports the software inventory of that PC to a Web-based service. The tool is in beta and available to companies with Software Assurance.

IT shops not yet keen on software services

Most mainstream IT shops have yet to embrace software services for numerous reasons. Managers are worried about allowing corporate data beyond the firewall, and some are concerned about whether or not online applications might create bandwidth constraints.

Peter Bittle, an IT manager at Coral Industries Inc., an industrial glass manufacturer in Tuscaloosa, Ala., is not yet ready to trust Microsoft where software security is concerned. "I already have to use third-party security software because I don't have a lot of faith in Microsoft in that area," Bittle said.

Bittle added that he might consider using SharePoint, Microsoft's collaboration application, in a services capacity.

Microsoft services hard to buy

Often in the case of software services, it's the business side of the corporation that may drive interest and not the IT department. "The CFO looks at this and says I don't have to put my money into a bunch of servers and let them depreciate," said Guy Creese, an analyst at the Burton Group, a Midvale, Utah-based consulting firm.

But if Microsoft wants its software services to catch fire, it may need to make them easier to buy.

At C2 Systems, the company tried to sign up for both Live Meeting and Forefront security services. Specifically, Bryant said he was not happy with the level of documentation he received from Microsoft. The company ended up buying its services from Postini Inc., which was subsequently acquired by Google in July.

"We would love to be able to resell [Forefront], but we are not sure we can. We struck out so miserably trying to do it internally that there is no way I can put a customer through that."

Christina Torode contributed to this story.

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