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Microsoft’s Software Plus Services Strategy Includes New Business Models for Partners

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Press release

During the opening keynote today, at Microsoft’s Worldwide Partner Conference, Stephen Elop, president of the Microsoft Business Division announced the pricing and partner model for Microsoft Online Services – the product range which delivers enterprise class Microsoft software as subscription services, hosted by Microsoft, and sold with partners. The services enable access to messaging, collaboration and communications software over the Internet. Products available include Exchange Online, SharePoint Online, Office Communications Online, Office Live Meeting, and Dynamics CRM Online.

“There is incredible partner opportunity at every level – integration, migration, customisation, consulting services, and managed services. Microsoft Online Services provides stability and an opportunity to create long-term customer relationships,” said Stephen Elop, president of the Microsoft Business Division.

Key details of the business model:

  • Services will be sold as a suite or stand-alone products with prices starting as low as $3 (U.S.) per month.
  • Microsoft has also launched Quickstart programme to help partners get the guidance for discovery, enrolment and activation of Microsoft Online Services: http://www.quickstartonlineservices.com.

How this helps partners:

  • Microsoft is introducing two new suites of subscription services as part of the Microsoft Online Services family:

1.       Microsoft’s Exchange Online Deskless and SharePoint Online Deskless offerings are designed to meet the needs of “deskless” workers. A Deskless suite, including Exchange Online Deskless and SharePoint Online Deskless, will be available for $3 per month.

2.       The enterprise offering is a business productivity suite including Exchange Online, SharePoint Online, Communications Online and Office Live Meeting. The suite will be available for $15 per month. Customers can also subscribe to each service independently.

Partner Compensation Model:

  • Partners selling the Microsoft Online Business Productivity Suite or the Deskless Suite receive 12 percent of the first year contract value with a recurring revenue stream of 6 percent of the subscription fee every year for the life of the customer contract. This translates into 18% of the subscription value in the first year.