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Microsoft partner finds new opportunities with SaaS

4 February, 2008
By Patricia Pickett


Customer interest in software-as-a-service (SaaS) has been increasing over the past year, opening up new opportunities for channel partners, according to Microsoft Corp.

The continuum of software has on-premise software on one end, and a number of vendors espousing the all-in-the-cloud model on the other extreme, said Mark Relph, vice president of Microsoft Canada Co.'s developer and platform evangelism group. But in Microsoft's software-plus-services (S+S) view, "the sweet spot is the hybrid approach," which offers customers the option of looking to a partner to install one piece of software in-house, while deploying another application in a managed mode, he said.

"There is a huge opportunity for partners ... to take a lot of the skills built up around our technology stack and transfer that into the SaaS world," Relph said. "The architecture and way of deploying the solutions is evolving, but the core skills are easily transferable into the new world ... we see customers expecting partners to have the capability of blending managed elements with an on-premise solution."

Andy Papadopoulos, CEO of Toronto-based Microsoft Gold Certified partner LegendCorp, agreed that interest in the S+S model is growing among both customers and partners. As certain products become easier to implement, partners are looking for other ways to make money. One way is to get into the maintenance side of the business, patching software and keeping it current for customers that don't want to be tied up with those tasks, he said.

"In the past, the value-add was the product's features, but today people may be happy with the features but may be unhappy with maintaining the software," Papadopoulos said. "We're seeing a trend where customers are saying, 'I just want to stick to what makes me money,' and they are willing to pay for these services which are provided by someone who they feel will be their trusted advisor. They want to sit in front of an application and know that it will run."

LegendCorp has invested in the S+S model on the remote management side by developing its own monthly subscription service, LegendCorp 365, based on the capabilities of System Center Remote Operations Manager. "When we built this brand-new business unit, we went down the direction that clients were already asking us to go" in taking over 24/7 remote monitoring of Exchange, Papadopoulos said.

To Papadopoulous, the hybrid S+S model is the ideal scenario. "Especially in the mid-market, you'd be hard-pressed to find a client that is going to give up all their servers and control of their environment -- that's very scary to customers," he said. But the attraction of LegendCorp.'s service is that all equipment stays at the customer's location, with full remote access for LegendCorp in a very secure fashion.

Papadopoulos said that in the past, he had run into problems with third-party remote management systems for Microsoft products. "There were integration issues and frustration around whether they would work or not." But LegendCorp was able to turn on its remote monitoring service within weeks rather than months because "Microsoft had tools that were guaranteed to work with other tools -- it's a well-thought-out process," he said.

According to Relph, developing a services mentality and getting used to the billing and management side of the business can sometimes be a challenge for partners. However, Papadopoulous said the billing aspect was pretty straightforward for his business because LegendCorp has kept service package choices simple and uses Dynamics SL for billing and invoicing.

LegendCorp still had to make some big investments in order to transition to the S+S model. Whereas the firm had always operated during regular business hours with occasional after-hours and weekend work, starting a SaaS business meant making sure that the business was operational 24 hours a day, seven days a week. That meant hiring new people and adding new infrastructure. "There's a large investment you have to spend in infrastructure of your own to support your clients' infrastructure, but once you build it, you are able to leverage it over and over again," Papadopoulos said.

However, not all partners will have to build their own data centre space, said Relph, adding that some partners may prefer to enter into a strategic relationship with a hosting provider.

 

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