Microsoft is performing strongly in Ireland in key areas, such as cloud services, database consolidation and virtualisation, but there is much being done to adapt as a business to changing market needs, both internally and with partners.
We caught up with Martin Cullen, director, small and medium sized and partner business, Microsoft Ireland, for a channel update and heard that while certain areas are performing strongly, there is much being done to ensure that partners and the channel are doing what is necessary to communicate the full value proposition of what Microsoft has to offer.
Perhaps unsurprisingly, Office 365 is doing well for Microsoft and has become as common in sales terms, as boxed versions.
“We’ve seen really aggressive growth,” said Cullen, “but sustainably so, over the last number of years. For the first couple of years, you’d expect that because it was starting from a low base but, at this stage, it is a very large component of our numbers within the business… For me [selling] Office365 is like selling an ordinary copy of Office.”
Systemic uptake
Among smaller businesses, Cullen says up to 200 or so users, that uptake has been “systemic”.
“My personal view is that it mainstreamed about July of last year and became just a normal thing that we do and that customers ask for.”
However, this switch from boxed software to service begs the question about how the channel in general has adapted to this change, not just in productivity software, but everywhere the ‘as a service’ label can be applied.
“To be fair to the channel,” said Cullen, “they had their historical business models, with their cost base aligned to supporting them.
“Change happens at different rates for different parts of the world, companies, customers etc. So you had customers at one end trying to figure out should they go to the cloud, and Microsoft building a cloud offering and really driving that agenda into the market over the last number of years. And then you had the partners in the middle thinking, ‘I know I need to do this at a rate that is going to work for our customers, I need to manage my business today and I need to manage it for the future’. That kind of melting pot does not happen overnight, but it has happened.
“What we are seeing now is that it just becomes normal for those that have engaged with it.”
There are three kinds of partners, Cullen argued, those who had a legacy business and had to adapt, those who were “born in the cloud” and did not have that legacy, and those who have not moved to towards cloud offerings at all. The latter must consider if the market is going to leave them behind, he warns.
“I’d be worried for some of them that that might be the case,” said Cullen. “It certainly isn’t too late, but the market is beginning to decide who the cloud players are. That is really important for partners, to know when it is right to go to the cloud, know when it is right to go on-premise and blending those worlds, ultimately providing a service to the customers that facilitates that blend.”
Elsewhere in the Microsoft ecosystem, but still in the cloud, there are new opportunities emerging.
“For us, the most exciting thing we are bringing to market is the infrastructure as a service (IaaS) with Windows Azure,” said Cullen. “That dimension has been missing in our armoury. Azure from a platform point of view has been great, but now the fact that you effectively get your ‘grunt’ from us in a really cost effective way speeds up projects, test and dev, production environments, etc at a pace that couldn’t happen before without massive capital outlay.
“The partners are now trying to figure out how to bring that proposition to customers, but they are very open to it. The partners are great at reinventing themselves and have had to do it through many iterations, and they know and they will find ways of bringing value to the customer.
“CRM online is an area that we have done well in but I often feel that not enough customers know about our offering in that space, and that integration with Office365. The message of the whole is greater than the sum of the parts becomes a reality when you start to use multiple cloud services together.”
Education and demonstration
This message of combined services is key, Cullen asserts, and the company is working hard to provide partners with the tools to bring that message alive for customers, through education and demonstration.
“A key element to be understood by customers and partners is the whole aggregation of the different scenarios. It is an absolute imperative at this point.”
“It is a mixed world we live in,” said Cullen, “with some cloud services, from Microsoft or from partners, and equally people will have on-premise, and they need to have a sustained, managed proposition that they can quantify value to a user cost base right across that suite. For customers, that is the aspiration in terms of managing and understanding costs. How they build out the technology stack against that can be up and down, so you blend the needs of investment and user needs.
“The partners that can build the models to demonstrate that to a company, in my belief, are the ones that are going step up and win in the next phase… It’s all about being able to create a model of cost per user per month across all needs.
“Business transformation of the kind that we are advocating to customers is what Microsoft and its partners have already done and are happy to help. The beauty of that is that when you are all in it together, you can relate to the challenges that a customer is facing.”
The Dublin technology centre is being heavily utilised with partners to bring customers in and demonstrate systems and services for them, such as the ‘new world of work’, reports Cullen.
Customer experience and referencability is key to showing how things can be done, he said, and providing reassurance as new customers embark on these strategies. “That has worked very well for us,” said Cullen.
“From a database (DB) consolidation point of view, Microsoft is performing very strongly. And we are keen to help our partners with that,” said Cullen. “They are looking for more than just consolidation, they are also looking for the outcomes from that, such as business intelligence, data warehousing and that sort of thing. That has been a big engine for us.”
The old reliable of Windows is still a central plank of what Microsoft does here too. “Windows Server 2012 was a defining moment for us in many ways. Our Hyper-V growth is massive. We’ve come from being a small player to being head to head with our largest competitor. Our argument is that we are a cost saver here.”
Cullen said that the company is building partner capabilities through heavy investments in training, and that all of this is brought together in terms of management and orchestration with System Center.
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