Microsoft today announced what those in the business have known for some time that they will be bringing their suite of online applications to the UK and Europe. Microsoft are an important partner for Cobweb so we like many partners have been trying to figure out what the future holds for such a partnership as they might be seen as competitors, but are they? We certainly don’t think of Google-mail as a competitor, nor other large providers who have many mail users, so let me take the opportunity to give a detailed response to the press announcement;
On the whole we welcome this move into online, as it validates the Software-as-a Service model that we have been providing since 2001. As a Microsoft Gold Partner we have worked closely with Microsoft over the last 7 years, being active members of various Technology Adoption Programs, Partner Advisory Councils and Founding members of the EMEA Hosting Club and regular visitors to Redmond, we have known about this move from Microsoft for a long time and have worked hard to ensure that our Service Offering is significantly different (better).
The SaaS model has been already proven successful by the likes of SalesForce.com and Solution Service Providers like Cobweb who, already have over 5000 small and mid market business customers taking a variety of services. The market has changed: when we started in 2001 it was all about the technology now, in 2009 it is all about Customer Service, having a UK Support centre, dedicated Account Managers, Self Service Control Panels, and Online Help through web chat and knowledge bases, providing good technology is no longer enough. Large organisations have a problem providing good technical service at scale, look at BT, but businesses like Direct Line have proved it can be done, it will be interesting to see how quickly Microsoft can be successful on this front
This market has been the market for early adopters and technologists for too long and Microsoft’s entry means will force traditional Microsoft resellers to look at this business model and we believe that Cobweb is the only credible alternative to the Microsoft offering in the UK.
Taking a closer look under the hood of the Microsoft Online offering it becomes quite easy to see some of the key areas of difference between the Cobweb and Microsoft offering
- Cobweb offer multi-tiered Enterprise levels of Service capabilities and service support
- More features and applications that add value to end Customers , Email Archival, Blackberry, Microsoft Hosted CRM, Online Backup, Webhosting, Managed Windows Server Hosting to name a few
- Much greater levels of configuration and customisation and integration
- Dedicated or semi -dedicated or shared environments depending on the customer requirements all running from a UK Data Centre
And for Partners, who Microsoft are making a big play for in this space (they have to don’t they?) we have had a successful reseller channel for 6 years, with range of successful partnerships from Telco’s down to local IT resellers they have told us over the years what they need which can be summarised over and over again in the first two bullets
- CUSTOMER OWNERSHIP – Our resellers own the customer relationship, including billing – Not the case with Microsoft Online Services
- MARGIN, MARGIN, MARGIN – These services can be expensive to sell and onboard so a high margin is essential for a profitable service offering Cobweb offer up to 40% recurring margin compared with 6/12% like for like
- Mature Partner management support including Sales and Marketing support, Technical help and business model development
- White label or Sell with options
- Full Service suite resale opportunity including Hosted Exchange, Hosted SharePoint, email Archival, Blackberry, Microsoft Hosted CRM, Online Backup, Webhosting, Managed Windows Server Hosting
- Greater opportunity to earn additional, increased Professional service fees because greater allowable customisation, configuration and migration and integration scenarios
- Sophisticated “Parallels” Control Panel
So we think taking all these differences into account we think there is a lot of room in this growing market space for Microsoft and Google to fight over who has most Mailboxes and who offers the best price, and for Solution Service Providers like Cobweb to carry on offering a great value service, that is tailored to the customer need whether for 20 or 2000 users.
Finally , what puzzles me most from the Microsoft announcement is the glaring omission of the Power of Choice message that was pushed so heavily at the Worldwide Partner Conference last July – I was there when the most senior Microsoft people evangelised about the Power of Choice; Microsoft, On Premises, or though Partner – where has that gone? Is this a sign that partners are being hung out to dry? Well we might find out this week at the Microsoft Hosting Summit in Seattle – I shall be sure to ask...
Mark