Microsoft to Pitch Software Plus Services to Partners

Microsoft CEO Steve Ballmer will introduce a partnering framework focused on distributing software plus services.

DENVER—The big-picture message Microsoft executives will try to convey at its annual Worldwide Partner Conference that kicks off here July 10 is that software plus services is the future.

Underscoring this message is the fact that CEO Steve Ballmer will use his keynote to announce a partnering framework for Microsoft around software plus services.

Speaker after speaker will stress that with its own software development and hosting capabilities and its extensive partner ecosystem, the Redmond, Wash., software maker is well-positioned to bring both software and services to partners and customers.

"Well have on-premises offerings, offerings hosted by Microsoft, and a set of offerings hosted by partners, which enables the power of choice for customers," Allison Watson, corporate vice president of Microsofts worldwide partner group, told eWEEK in an interview ahead of the conference.

"So, while the benefit of software plus services is an industry phenomenon, Microsofts value-add is that we are the only player out there that has the choice across the whole people-ready business," she said.

The global model going forward will be a mix of services and on-premises software, she said, adding that the keynote speakers will explain how Microsofts Live strategy is about "a set of product platforms, while software plus services is really the evolution of the industry all up."

/zimages/2/28571.gifThere has been a shake-up in Microsoft Dynamics leadership. Read about it here.

While the partnering framework that Ballmer will announce is a work in progress and far from complete, the goal is that it will categorize all of Microsofts technologies across the various on-site, partner-hosted and Microsoft-hosted delivery models.

The contractual relationships around this will also be three-pronged: Microsoft, the partner and the customer.

"Were taking the integrated view on this and looking at it all three ways: partner to Microsoft, partner to customer, and customer to Microsoft. Thats important because, as this unrolls, we want it to be a rich one that is not just about silos like just Microsoft-to-customer scenarios or only partner-to-Microsoft relationships," Watson said.

Microsoft also hopes that the frameworks design will bring clarity and precision as it announces products that are in the software-plus-services model. "We need to be precise about the business models, the monetization and the contractual relationship around this, and we need to be intentional about our decisions," she said.

As such, part of Microsofts broader goal with the framework is to set the direction for the company that frames the business models that come together for software plus services as well as the business models around building new applications, and developing, customizing, hosting and integrating them for the software-plus-services area.

"And then well also be precise in terms of saying whether or not there is an opportunity for every business model in this regard," she said.

But success is about monetization and whether Microsoft should resell these solutions or not, she noted.

"Again, imagine these as on/off buttons, and were going to say yes or no, but were going to be consistent about it and about the concept of how we will do referrals, how advertising ties in, whether there should be a fee-based model and whether there is a subscription model," Watson said.

Ballmer will also talk about how the concept of a people-ready business, which Microsoft has long talked about, applies in this new world of software plus services.

People-ready involves talking to people about what theyre trying to do and, as the consumer and business worlds start to blend, addressing the changing needs that arise as those people take on different roles, Watson said.

"So, as software and services start to blend, the number of solutions that the industry can enable grows substantially, and we are looking at all these scenarios and all these people," she said.

/zimages/2/28571.gifClick here to read how Microsoft is pushing partners hard to drive product sales.

Ballmer will also use his keynote to explain more precisely how Microsoft sees its technology adapting to this change. The company has already started to build out part of this vision with Silverlight, while Expression "is a huge opportunity in the development space that starts to unlock a bunch of different partner opportunities, but it really is a key part of the software-plus-services framework because it enables the Web scenario," she said.

If that is then combined with the Microsoft adCenter platform, Xbox, MSN, and traditional and business search to create a partner scenario on behalf of a customer, the result is a very different framework from what has traditionally existed.

But the software-plus-services scenario is about more than just the technology platform; it is also about the channel framework for enabling and delivering it.

Next Page: Creating options for partners.