2013
02.01

The “2013” wave of “The New Office” has been launched.  You’re hearing lots of news about Office 365 (and this stuff is valid) but the launch includes all the usual on-premise server and Office client suspects.

A few days ago Microsoft launched the FPP (Full Packaged Product) of Office 365 Home Premium.  FPP means it comes in a box.  Yup a consumer can buy Office 365 from a shop (or direct online) for their family on an annual basis.  This includes up to 5 installs of Office on a PC (2013) and on a Mac (2011).  The box contains a code and setup instructions to get going, and this includes the simple process for installing the auto-updating install of Office.

The other SKUs of Office 365 are intended for the business.  If they are sold direct by Microsoft, a partner can be registered as the partner of record.  This gives that partner their recurring fees.  Partners can also use the Office 365 partner portal to send invites to their customers; this automatically configures the partner of record to ensure they get their finders fee and recurring fees.  The new Office 365 versions will be available on Feb 27.  Don’t ask me when the upgrades for existing customers will happen because I do not know.

Remember that Office 2013 is included in the price and can be delivered by:

  • Click-to-run: permanent (it is leased and activated every 30 days as long as your subscription is valid) and updated install
  • On-demand: A temporary install, e.g. for an Internet Café
  • Office Web Apps: lightweight web only Office apps

Office 365 Small Business has a target market of 1-10 users (expands up to 20) and works with Windows Server 2012 Essentials.  This will also be available direct and retail (FPP).

Office 365 Midsize Business is intended for the SME market with a target market of 11-250 (max of 300).  It is also available via Open licensing as well as the normal direct/partner of record methods.  This means that VARs can buy Office 365 Midsize Business (from March 1st) from a cloud distributor and sell it direct to their customer without Microsoft having direct billing with the customer.  This means that VARs can bundle O365 with annual support/maintenance/services contracts and price it as they see fit. 

Office 365 Enterprise is for >250 users.  It is also available via Enterprise Agreements (EAs) sold direct to the customer by a Large Account Reseller (LAR).

In summary:

  • Right now: people can buy Office 365 Home Premium, including FPP via retail
  • Feb 27th: business can buy direct and through association Office 365 Small Business, Midsize, and Enterprise SKUs
  • March 1st: Microsoft partners can buy Office 365 Midsize via Open licensing from distribution and resell it to their customers

There will be trial editions available.

The clever partners will focus on services.  The soon-to-be-extinct partners will moan about the end of SBS.  How much profit did you make last year on that SBS server hardware sale?  Hardware margins have been going down.  If you rely on selling tin then you’re not long for this world.  How much profit did you make from the license?  Maybe a few points, and once again, you won’t feed your children on profits from licensing.  Services are where the money is.

My employers have been running a series of workshops on the next version of Office 365 for the partners who registered us as their cloud distributors.  Office 365 MVP, Kerstin Rachfahl, flew over from Germany to deliver the content. Kerstin and her husband Carsten (Virtual Machine MVP like me) own a VAR company that operates in a market that is similar to the one that the typical Irish partner does, and they have made a success of Office 365.

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Services! Services! Services!  Set your self up as the delegated administrator for your customers and support them from your office.  Deploy Office and Lync.  Upgrade their PCs using MDT.  Maybe couple Office 365 with cloud PC management (e.g. Windows Intune) for remote PC/mobile device support and management.  Migrate users from their SBS to the cloud.  Learn some basics in SharePoint and maintain it for the customer.  Maintain their users, customise policies, and all that usual stuff.  Become the customer’s IT support staff in the cloud.  In the end, you still do the services.  Just now, you can do it from anywhere because everything is online.

Partners had a right to be upset at Office 365 before now because of the lack of a distribution model through Open.  Now the two smaller packages will be available via FPP retail and the midsize product (where most VARs business is) will be available via Open.  Don’t bother crying about Enterprise not being via Open.  All Microsoft enterprise licensing (Select and EA) goes direct to the customer via a LAR, bypassing the partner.

Any partner that continues to fight the cloud is going to be in for “interesting times” in the next 12-18 months.  Change is constant in IT.  Your ability to resell SBS ends this year.  Selling Server Standard, Server Standard per user/device CALs, Exchange Server and user CALs is a pricey business, and the stuff is complicated.  Anyone in the SBS market knows that service provider churn happens and is common.  You probably won the customer through a “site check-up” and that’ll happen to you if you cling to the traditional client/server model.  I’m seeing lots of partners interested in what Office 365 can do for their business and their customers … once you’re in you have enterprise level products (e.g. Email archival and Data Loss Prevention without Enterprise CALs), no more upgrades, and continuous Office upgrades … and no more trying to sell a SBS server with ever reducing margin on tin/licensing.  Not to mention that field engineer time becomes more efficient because the “server” is online and there is no travel to “hit the reset button”.

Resistance is futile.  Even the dinosaurs, as powerful as they were, died when change came a calling.  Do you want to be a dinosaur?

Microsoft posted a lot of information last night.  This includes release dates, information on the 4 basic SKUs of Office 365 (Exchange online is still available and can be mixed with Office 365 Enterprise [E1]), and some FAQ and presentations.

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  1. There are some great changes to Office 365 with this release, however the lack of most of the plans for VARs to resell is no good.
    As I understand the information I received from Microsoft, all I can resell is Small Business Premium and Midsize. There are no plans without the desktop Office suite, and if I have a customer with mixed environment (desktop users and kiosk users) I have no way of selling all the licenses to them, without involving some direct billing from Microsoft?

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