Consider the following scenario: You’re a managed services provider. Instead of investing big bucks to build your own hosted applications, you entrust your end-customers to Microsoft’s cloud — including Exchange Online and SharePoint Online. But in the past few weeks, that Microsoft cloud — called BPOS (Business Productivity Online Suite) — has gone dark at least three times. The big question: Will end-customers remain patient amid Microsoft’s SaaS growing pains? Or is there something fundamentally wrong with Microsoft’s hosting strategy?
To understand Microsoft’s most recent cloud challenges, check out Mary Jo Foley’s All About Microsoft blog. In it, Foley describes Microsoft’s most recent outages, and Microsoft describes what went wrong and some of the potential corrective measures.
Please note: Generally speaking I’m optimistic about Microsoft’s cloud strategy. I think Windows Azure holds a lot of promise. And despite potentially thin margins for partners, I see why end-customers potentially value hosted versions of Exchange and SharePoint.
Software Development vs. Application Hosting
But here’s the challenge: Some skeptics say Microsoft is a software development company rather than a hosting company. And yes: There’s a big difference between…
- (A) writing code for a living; and
- (B) building massive, mission-critical data centers that host applications for customers.
Given Microsoft’s most recent BPOS bumps, I’m starting to wonder: Should Microsoft pull the plug on BPOS, leaving the hosted Exchange market to big service providers and hosting provider specialists? Such a move would mitigate some of the cloud channel conflict that Microsoft currently faces with partners.
Microsoft could, after all, emulate Oracle’s cloud strategy. Oracle CEO Larry Ellison has avoided the temptation to build an Oracle cloud. Instead, Oracle has introduced service provider pricing to hosting partners, under the direction of Kevin O’Brien, senior director of ISV and SaaS strategy for Oracle. Take a close look at the top 20 or so cloud software companies, and the vast majority (if not all of them) run Oracle software behind the curtains.
Can’t Quit Yet
Ultimately, I think Microsoft will get BPOS right. And I think Windows Azure will provide even better opportunities for partners and ISVs. But I wonder: How many SaaS and cloud outages can Microsoft experience before a few customers and partners start heading for the exits?
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Posted In: North America | Partner Program | Service Level Agreements | Software as a Service and Hardware as a Service
Tags: All About Microsoft | Business Productivity Online Suite | Exchange Online | Microsoft BPOS | SharePoint Online | Windows Azure
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Without criticizing BPOS, I can speak from experience in saying that the outages probably have little to do with the quality of the hosting provider and a lot to do with the overall scalability & design of the software being hosted. All hosting providers (ourselves included at OWN) and many channel companies you’ve even highlighted SAN and messaging outages for have suffered issues from performance to outages lasting days at a time. The same issues happen with Google and Google Apps and Twitter and so on and so forth. You get the idea.
Microsoft can’t kill BPOS now because it’s the most effective way it can work directly with the consumer. That’s what BPOS is. And as much as the critics would like to spell it’s doom, Microsoft does have several extremely successful cloud-to-consumer components from Hotmail to Xbox Live.
-Vlad
Vlad: I wish there was a way to measure Microsoft’s performance with Exchange Online vs. the performance of third-party Hosted Exchange providers… Would be interesting to see who has the better track record and if there’s a difference in SLA performance…
Also, your point about Xbox Live is on the mark. In fact, we’ve openly wondered if the Microsoft BPOS team has spent time with the XBox Live team.
-jp
I think Microsoft, Oracle and such will probably become leaders when talking about Commodity-as-a-service applications. However, the market of Differentiated-app-as-a-service is just as interesting and probably more appealing from a Gross-margin perspectives. This is where service providers, and especially Telco’s, will probably dominate.
Telco providers are already joining forces with Global Outsourcing vendors for leveraging practices and economics of sales. There’s more on this dynamic in the discussion here here
O Ringer: I disagree with you on one point. Oracle is largely deferring to service providers that want to use Oracle databases, middleware and applications for hosting. Oracle apparently is not creating an Oracle-centric cloud on its own.
-jp
Having read this I believe that sooner or later microsoft will most likely perfect its own cloud applications. It may seem like its all about trial and error atm.
Awesome post.Here’s a tool that lets your build your database apps in the cloud fast, and
withoutcoding http://www.caspio.com/