Announced during the first day’s keynote, Microsoft unveiled a merging of packaged products and a tying together of a few new features aimed at offering more value for businesses.
It will be offered in two flavours, Enterprise and small business, although no pricing has been announced. It contains licensing for Office 365, Windows 10 and EMS (security and mobile management). It’s a direct salvo across the bows of competitors that only have one or two pieces of the equation.
It should be simple to understand ; Microsoft has radically changed from a sell licence and move-on model, to one that requires an ongoing commitment in the form of a subscription. However, the double-edged sword for Microsoft in that it requires Microsoft to provide more and more, and ever more frequently, for customers to perceive the value of their investment. The cognitive capacity of the human to habituate itself to the new norm is extremely powerful. If you pay 10$ for the same thing every month and the service stays identical, naturally and automatically your brain will tell you you’re getting less.
So this puts enormous pressure on Microsoft from a strategic point of view, but also from a financial one. Subscriptions just don’t proved the one-time boost in revenues. So the challenges are there and the incentives are all lined up for Microsoft to produce pretty much the best productivity suite out there.
We’ll see if they can execute. I am hopeful, but with Satya at the helm quite confident too.
Of note today, Microsoft did not usher the CSP acronym at all on stage. It was, however, prominent in the sessions throughout the afternoon. As an end user all you need to know is that you’ll be able to purchase Office 365 etc from anyone, on a monthly or annual basis without having the tie-in to a particular VAR/Reseller.
That puts all the pressure on said VAR/Reseller to provide you with the best service and experience possible. It should be noted that money is tight for them in this new model. And that will have one of two effects : either they will improve and offer the best service or they will die.
I suspect Microsoft is betting on a reasonable amount in the second camp – of course, a consequence of this is that those that stay increase their power – as a sort of great trimming of the partner ecosystem. Effects such as those are extremely difficult to predict as there are just too many factors to take in to account.
It will be interesting to see how this pans out.
Day 2 looks to be interesting with Judson Altoff (EVP Worldwide Commercial Business) and Toni Townes-Whitley (Corporate Vice President) running the keynote. Remember, it is Judson that has kicked off this latest transition of the sales model in Microsoft – dispensing with over 3000 jobs recently.
I’ll post again tomorrow if time allows.