"There are two models today: on premise and SAAS (through partners). With Titan there is on premise, SAAS through partners and SAAS directly run by Microsoft … Partners are exposed to all three models and they can decide how it maps to their model."
During the 2006 PartnerWorld conference, Microsoft CEO Steve Ballmer outlined five key areas partners can look for opportunities within the on-demand model: Generating advertising revenues, referral fees, actually hosting applications, reselling access to other partners application services, and engineering custom integrations that build on the core applications in Office Live.
Wilson said he has been coaching partners to look at SAAS as another way to deliver a service out to their community. But, he cautions, partners should make sure they understand how to participate.
"It takes time to build an on-demand service or plug into it. You dont get them overnight," he said.
There is also still the issue of pricing—one that Microsoft is still hammering out.
The issue is that Microsoft charges partners an upfront license fee to resell its software, but hasnt yet determined what it will charge for on-demand usage. "You cant charge [partners] for upfront licenses and have partners sell on a monthly basis," said Bois. "It would take years for partners to recoup [their investment]. My guess is Microsoft will sell [software to partners] on a monthly basis."
Microsoft CRM partner Jason Hunt, the chief technology officer at Invoke Systems, is part of the initial group of partners previewing Titan. He doesnt see any issues with the pricing or licensing structure of an on-demand offering.
"I dont get it with partners. The bill rates were allowed to charge on doing a CRM deal are very profitable," said Hunt, in Belleview, Wash.
"Ive heard [about pricing issues] from other partners and my biggest comment is you get out of it what you put into it. A lot of people are looking for a quick win—classic solution selling. And Microsoft CRM will really test your mettle. You have to make sure in every deal what you put in front of a customer is what they do."
Hunt said one of the most advantageous upgrades in Titan is the ability to leverage his teams development work across on-premises and on-demand platforms. The point with Titan is that a partner can configure a system once and deploy it whether its on premise, hosted by Microsoft or hosted by a partner.
"It doesnt matter. The behind-the-scenes software is the same," he said.
Another plus for Hunt with Titan is its multi-tenant capabilities, which will enable him to save on infrastructure costs. "CRM 3.0 was not multi-tenant," he said. "Every time I wanted to set up a new implementation for a customer I had to get a new server. Now there are these efficiencies and scale with hundreds of customers using the same server, the same hardware."
That said, Microsoft is doing multi-tenancy a little differently than other on-demand CRM vendors, according to Hunt. He pointed out that while the Web front end of Titan is shared, the database layer is segregated.
"Its almost identical to on premise," said Hunt.
Competitors like Salesforce.com will likely capitalize on that fact as a negative. Marc Benioff, the outspoken CEO of Salesforce.com, has been a big proponent of a multi-tenant architecture as the true tell-tale sign of on-demand software.
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