Against a backdrop of widespread apathy regarding Windows 8, Microsoft has made a couple of other decisions that could reasonably be described as “misguided.”
In case you've forgotten, here's what's happened in just the past few months:
Microsoft certainly doesn’t seem too concerned about alienating its MSP partners. When it first launched Office 365, it didn’t offer channel sales at all. It only gave in and allowed MSPs to directly bill clients in 2012. Now, just over a year later, Microsoft is making this deal half as lucrative (in some cases) for MSPs.
Meanwhile, Google is going in the opposite direction. After a couple of price cuts, the search giant is now offering far more flexible billing, allowing customers the choice of a true pay-as-you-go option for those who want flexible or experimental cloud deployment.
So will this move push more MSPs in Google’s direction? Ultimately it will come down to end user preference. Microsoft always has the benefit of offering the applications that users are already familiar with. While Google Apps can integrate with these, there is always something of a “square pegs into round holes” feel about such a setup. Additionally, Google Apps doesn’t offer up-to-date licences for Microsoft’s Office suite as part of the deal.
Microsoft is winning the race at the moment, if two recent surveys are truly reflective of the situation on the ground: 66% of top MSPs sell Office 365 (according to MSP Mentor), while only 30% sell Google Apps (according to Talkin’ Cloud). Google Apps does, therefore, have some ground to gain.
It’s fair to say that MSPs who move in Google’s direction will be doing so on principle as much as anything else. For small MSPs, the commission stream earned from reselling these cloud services pales into insignificance compared to the income from the actual implementation and support work, so the platform is largely immaterial. However, a commission cut of up to 50% is probably enough of a slap in the face for many people to at least consider the alternatives.
The GoDaddy deal is an additional insult. This is effectively Microsoft and GoDaddy trying to take MSPs “out of the loop” entirely. It’s not the first time this strategy has been tried. In fact, it’s essentially the pre-2012 Office 365 strategy all over again, albeit with a third-party now involved.
Microsoft enjoys a large enough market share to display this kind of arrogant complacency, but it’s not without its dangers. With Windows XP support coming to an end very soon, and Windows 8 widely viewed as Vista Mark Two, small sites may decide to do something completely different: Macs supported by a Google Apps back-end, for example.
At times it seems that Microsoft doesn’t appreciate it's actually on rather shaky ground.