Necessity is often the mother of channel invention. With Microsoft rapidly moving tens of thousands of electronic mailboxes to the cloud via its Office 365 cloud computing service, channel partners have to find new ways to add value.
A good example of such an approach comes from Champion Solutions Group (CSG), a longtime Microsoft channel partner that has set up a MessageOps division within the company to market 365 Command, a complementary cloud service to Office 365 that automates the management of Office 365 mailboxes.
According to Chris Pyle, a managing partner within CSG, the idea for 365 Command came from hard-won experience with PowerShell, the command line interface for managing Office 365 that’s provided by Microsoft. CSG discovered, to its dismay, that it needed to use senior IT administrators to help clients manage their mailboxes because of the arcane nature of PowerShell.
“We were using Level two and three guys to manage Office 365,” said Pyle. “We couldn’t make money doing that.”
To solve that problem, CSG developed 365 Command, a tool that allows anyone to easily manage Office 365 mailboxes at a higher level of abstraction. Once the product was developed, CSG set up MessageOps as a separate division tasked with managing 365 Command running as a cloud service of the Microsoft Azure platform. Besides selling that service itself, MessageOps also allows other solution providers to either resell the service or market it under their own brand names.
“No one partner can do it all,” said Pyle. “We’ve set up terms whereby we agree not to cross-sell into their accounts if they partner with MessageOps.” He added that CSG has dedicated a small sales team to sell MessageOps as part of its overall effort to make the shift to cloud computing.
“We used to make a lot of money selling Microsoft Exchange, Office and all the hardware it runs on,” he noted. “With all that moving into the cloud, we need to find a way to stay relevant.”
Pyle said there’s still plenty of on-premise Microsoft Exchange business, but by the 2016 to 2017 time frame, the vast majority of that business will have moved to the cloud. As a result, CSG is trying to make an orderly adjustment to its business model at a time when customers are voting for the cloud.
“Customers used to have to pay for everything up-front, and all the burden of making it work was on them,” said Pyle. “Customers don’t want to do that anymore.”
MessageOps, added Pyle, gives CSG a way to participate in a marketplace that Microsoft is building around Office 365.
The challenge facing solution providers is weaning their business off a revenue model in which they get paid for everything up-front versus a cloud model that is more profitable over the three-year lifecycle of a recurring services contract. Once that challenge is met, the opportunity becomes finding ways to add more value.
“Microsoft is trying to foster a community,” said Pyle, “and we want to make sure we’re part of it.”