Microsoft is slashing some SaaS prices by 33 percent, confirming a scoop from TheVARGuy.com earlier today. Sources close to Microsoft say this is the start of a SaaS price war with Google Apps, with VARs and MSPs potentially getting squeezed. But Microsoft is reminding reporters that more than 7,000 partners are building SaaS practices around Microsoft Business Productivity Online Suite (BPOS), Exchange Online and SharePoint Online, among other offerings. Here’s the updated report from The VAR Guy.
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Posted In: Software as a Service and Hardware as a Service
Tags: Google Apps | Google Docs | Google vs Microsoft | Microsoft BPOS | Microsoft Business Productivity Online Suite | Microsoft Cloud | Microsoft SaaS | Microsoft Software as a Service | Microsoft Windows Azure | SaaS Prices
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I think that BPOS was a little overpriced to begin with. The other big problem that I see is the obvious instant market that BPOS could open up that Microsoft is ignoring: micro-sized businesses. BPOS is a great alternative for the 1 – 5 person business who probably doesn’t want their own Exchange server, and doesn’t want the complexity of overhead and support for SBS. Last time I checked, BPOS was only available for businesses of 5 (or was it 10?) or more accounts.
While I don’t service many SOHO users (by definitiion, managed services aren’t really geared toward them), it seems like Microsoft is missing out on this market, and it might be a great way for MSP’s to find ways to provide managed/cloud services to the SOHO crowd.
The good news is that there are 3rd party SaaS providers that at least have hosted Exchange services that can sell small numbers of seats.
-Dave
http://www.twitter.com/manageddata
Dave: Always good to hear from you. But in this particular case, I think Microsoft is thinking really big with BPOS. Today’s Microsoft announcement involved several larger company deployments — including Aon Corporation, Aviva PLC, Lions Gate Entertainment, McDonald’s Corporation, Rexel Group, Swedish Red Cross, and Tyco Flow.
Lots of seats…
Joe,
That is impressive to see such large enterprises jumping on board. Too bad I wasn’t the “partner of record” on those accounts!
I think that if Microsoft finds a way to tap the SOHO market, even if it is free or low-cost for the first 5 seats, they could capture a lot of market share AND beat Google by offering an enterprise grade more capable product to the Google Apps crowd.
There are about 17 million self-employed people in the U.S., and 23 million small businesses. Now THAT is a lot of seats!
-Dave
Dave: Great points all around. I’m curious to know if you think MSFT should be selling direct or through partners to those small SOHO engagements. And if you would like to work with Microsoft in those areas, what should the company be doing for you?
-jp
Reminds me of the story of the Turtle (partners) and the Scorpion (MSFT). Except the Scorpion isn’t going to drown.
Larry: Funny, but that story came up during a private HTG peer group meeting in Orlando this week. The story was slightly changed so that the scorpion was a certain hardware provider, and VARs/MSPs were the frog. Ouch…
Were you in that peer meeting, Larry?