Fair’s fair, and after giving Google time to explain its cloud channel play, how could I refuse when Senior Director of Microsoft Online Services Tom Rizzo came to San Francisco and offered the same kind of insight into Microsoft Office 365? In the course of our discussion, which included some new security updates, there was plenty of discussion about Google Apps and most of all, the idea that Microsoft Office 365 is the partner-friendliest cloud on the market.
Let’s just start with a quick overview of the new security features that Office 365 now boasts: Microsoft will now sign EU Model Clauses, so service providers based in Europe can rest assured their data is secured in compliance with European Commission’s stringent Data Protection Directive. If Microsoft breaches this agreement, it’s liable for serious financial penalties.
Along the same lines, Office 365 is now HIPAA-compliant, opening the door for even small doctors’ offices to take advantage of Microsoft’s cloud. Additionally, Microsoft has launched a new Office 365 trust center, which Rizzo says provides in-depth information on how and where your data resides in the cloud, including the routes it takes to get back to you.
All of these updates are designed to improve customer peace of mind, he said.
Okay, now onto the really good stuff. Rizzo started the conversation with some numbers: More than 42,000 Microsoft partners have signed on with Microsoft Online Services to deliver Office 365. That covers MSPs, VARs, telcos, system integrators, ISVs and anyone else in Microsoft’s partner network who’s reselling the cloud suite. In other words, Office 365 is on track to become Microsoft’s fastest-growing business segment ever (especially thanks to huge interest from businesses with 50 seats or less), and partners are well-represented.
There’s one question that always comes up whenever I talk to Microsoft, and you can probably guess what it is: billing. Rizzo did reinforce that unless you’re one of Microsoft’s 28 partners who’ve enrolled in the Office 365 syndication program, Microsoft still handles the billing. No changes, no updates, no nada.
Regardless, Rizzo said Microsoft’s partners are building themselves strong cloud businesses with Office 365. Some channel organizations are born in the cloud, he said, and are excelling at developing additional solutions on top of Office 365 to add value. Other, more established resale and distributor businesses are using Office 365 as a complement to existing legacy services and offerings.
In other words, Rizzo said Office 365 has a cloud channel presence the competition — least of all Google — can match. Google may boast it has 3,000 resellers, he said, but that’s obfuscating the fact that Microsoft claims almost 15 times that number. Microsoft is soundly beating Google in terms of market share, commitment, cost and channel size, he said — basically, Rizzo dismissed every Google statistic thrown at him.
As for 2012, Rizzo said a major priority would be extending Office 365 to more platforms, including tablets, smartphones and the wild world of the Apple ecosystem. And while Rizzo couldn’t comment one way or the other, TalkinCloud is hearing through the grapevine that Microsoft plans to make significant changes to its Office 365 partner program and cloud certification offerings.
Oh, and I couldn’t let Rizzo off the hook without asking about Microsoft Office 365′s outage-plagued first months. He said while Microsoft obviously would rather deliver uptime than money, Office 365 still offers the only financially backed SLA in the market, and refunded affected customers in a way Google never would. In the meanwhile, Microsoft continues to bolster its infrastructure.
Rizzo’s logic made sense, and it’s hard to argue that Microsoft is simply bigger than Google no matter how you slice it. But I couldn’t help but notice how often Google came up in the conversation, and I was struck by just how much it seemed to be on his mind. I’m curious what partners of either company think, so make sure to leave perspectives in the comments.
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It is really interesting to see the SMB segment taking over @Microsft. The whole SaaS piece started with Energizer as a large customer approach and even BPOS was targeted at the large customers though is was probably more hosting than cloud in the dedicated fashion. With O365 Microsoft has turned around more or less completely to make this a SMB play. The majority of people who have built this business have left or changed roles and the direction SMB coud be felt but is not expressed. There are still targets and teams in EPG fighting to win the large ones but their weapons are not sharp anymore given the restrictions in size and feature of the SMB product O365.
CloudEvangelist: I realize much of the Office 365 marketing has targeted small business. But do you really think Microsoft doesn’t want to sell Office 365 to large enterprises?
-jp
I use O365 extensively. As a partner I don’t feel massively engaged but lets see what MS will do. 2012 is a catalyst year for cloud adoption in the SMB marketplace. Here in the UK people are rightly concerned with costs and value for money. The security argument is ever present and each obstacle is slowly being overcome.
Mobility will be a big talking point too. I’m genuinely excited by the O365 portfolio we just need to ensure that MS keep their eyes on the ball. Which is and should be THE CUSTOMER.
I think they will. Especially if you look at the renewal and upgrade opportunities with Intune.
Cloud Strategies UK: Thanks for your thoughts from the other side of the pond. I really appreciate your views. But I’m wondering: Do you think Microsoft can make Office 365 a mobile hit when Microsoft’s own mobile solutions (Windows Phone, Windows Tablets, etc.) aren’t widely adopted?
-jp
Yes I think so, I am a sales representative based in the UK pushing the 365 campaign for our company and I have found 365 works well on all mobile platforms even Apple. As it is not reliant on a browser you still have full access to your cloud based data and you can synchronise your e mails, calendars, tasks etc. to any smart phone/tablet. You can even have Lync features on your IPad. So you aren’t restricted to using a windows phone. Obviously Windows phones integrate better and have more functionality but from a business perspective everything you need 365 to do on a mobile it can.