Friday, 22 July 2011

Virtual Reality Check

You can only go so far up ones own backside before you emerge into the same world at the other end. I made that and I am proud of it.

Online reputations are a wonderful thing if you are interested in them. I have no doubt that activities online will augment the standing you have in your business world and you can create wider and richer social networks. I am bought into all that. But if the current vogue of measuring your online reputation gets beyond the faddy fun scenario then we are in danger of promoting the wrong behaviour as drivers for future success.

You see one of the main drivers in the online world has been the urge to quench people's desires to be recognised for more fundamental reasons like love, relationships and sex plus for the business of basic hoodwinking. Yes we now have more business recognition sites like LinkedIn which helped people widen business networks and I have picked up several contracts from LinkedIn. But that changed about two years ago and now LinkedIn is the defacto research engine of choice for the recruiting world. People can advertise availability against which their profile can be matched for current jobs. And most of what goes on there is just that now.
There are many other business to business platforms but most are recognition seeking too. The Ecademy stands out as one site where business people are trying to do business with one another but most of that currently centres around networking itself which is fine.

What you cannot get around is that relationships have to be formed in the real world. Violent people can appear angels on the web. I pose the question that if Al Capone and Mother Theresa were alive today and actually used the web, who would have more Klout or value on Empire Avenue? It's obvious what the answer would be and is that a good thing?

You want to really influence people? Go learn from Rupert Murdoch. He doesn't Twitter people he goes see them or sends his agents. Google spent $2.06m on Government lobbying last year, yet they own Google Plus. The real world has not changed. You cannot cover up rubbish service by sweet talking Twitter accounts at the Carphone Warehouse, but you can win more sales by having a cool website and natty Twitter manner. Reality bites in the end.

People need to learn that ultimately you will be judged by who you really are, not who you virtually pretend to be and that's where reality is the best checker. Fancy CVs no longer impress me, interviewing people finds out what really makes them tick - even over the phone. The last batches of LinkedIn recruits I saw at one company were the lowest calibre I have seen yet their profiles spoke volumes of achievements.

My advice. Trust your instincts. Check people out. Don't give more credence to online reputations without checking as anything goes on the web and the most influential person could be the clown of the web who just posts heavily on Facebook in work time or 'a happy go-lucky girl' who might or might not have stuck insulin into saline drips killing 4 people or someone who has convictions for violent relationships and appears so sweet.


Reality check - you know it makes sense.

Monday, 18 July 2011

Cloud Survey & Facts

Microsoft released data from its SMB Cloud Adoption 2011 Survey this week.

It reveals that across the globe, 39% of SMBs will pay for levels of Cloud services in the next 3 years which is a sharp increase in numbers since the last survey was done a year ago. The figures point to SMBs taking an average of 3.3 Cloud based services.

The figures were interpreted to show that SMBs and Enterprise customers alike will mix on-premise based solutions and Cloud based and have some level of hybrid services. The interesting finding is that the larger the SMB, the more Cloud based services they will buy over the next 3 years. Some 56% of companies with between 51 and 250 employees will buy on average 3.7 Cloud based services.

Here's an interesting statistic - within 3 years, 43% of workloads will become paid Cloud services while 28% will remain on-premise and 29% will be free or bundled with other services. Heart warningly 82% of SMBs say buying Cloud services from a provider with local presence is critical.
An interpretation of the data by Microsoft itself is that Cloud services adoption will be gradual over the next 3 years and that there will remain a mixture of Cloud based and on-premise applications - so existing infrastructure will need to remain. But as equipment reaches the end of its life cycles, more and more companies in the SMB market place will start to consider Cloud based alternatives for the future.

I refer to such milestones as 'Compelling Events' when kit needs to be upgraded or hardware comes off maintenance contracts or a significant refresh of kit is required.

The good news for the Channel is that it appears local support and supply is key. Plus it is presumed that more resellers will take 'White Label' Cloud services such as co-hosting, back up, archiving, disaster recovery, unified communications, remote desktop support and email solutions in future.

Drivers to the Cloud are reaffirmed in the survey. Companies want to get greater scalability in their business to match growth expectations, drive down costs and profitability up, and pay-as-you-go models are becoming increasingly attractive. Obtaining more smooth and predictable costs when growing rather than lumpy IT costs are more desirable for businesses and their investors.

Much of the above merely augments the view of Cloud fans like myself. It doesn't necessarily address some of the obvious concerns and blockages like security and data management to help persuade people but it certainly validates what is the perceived opportunity to vendors and Channel players.

What it also doesn't address is how Channel players should take advantage of the opportunity but a clear message is that Channel companies should be looking to offer a range of options from hosting, applications, to deployment services and support. But there is a definite demand for clear solutions beyond simple software offerings.

What is clear is that as the adoption of Cloud services grow, there will be a corresponding decrease in the usual software application opportunity and the server/storage usually associated with on-premise solution. The two models in terms of sales revenue and cost structure are very different. A £100,000 on-premise sale today creates the lump of profit to fund current sales activity. But if that sale collapsed to a potential £4,000 a month then many resellers will be top heavy in terms of cost.

The quid pro quo is that as annuity style revenues accrue over time by renewing these deals and growing the user bases, then by 3 years down the line there will be a substantial monthly revenue flow that will have accumulated well above the cost structure.

So modelling the costs, realigning resources and reassessing commission models will be fairly fundamental for vendors and resellers alike. This is probably the most important area of understanding required by the industry in The Cloud as getting this right can yield huge results. Getting it wrong can bring ruination.

SaaS veterans like myself have long understood that selling software and services on a monthly annuity basis versus capital spend needs different selling skills, a different mentality and a very different incentive structure. Vendors and resellers should know that the initial decision for an end user to go into Cloud solutions is only the point at which the real sales effort starts. Instead of revelling in the deal volumes and the bloated commission cheques, salespeople need to drive adoption and usage from the first moment of deployment.

That requirers an entirely different sales mentality and incentive structure. Large software vendors are already making big mistakes in the reward structure and margin opportunities for the Channel maintaining the old 'sell and forget' model of reward. The margin and reward structure needs to incentivise on a basis of 1) Initial deployment, 2) Adoption driving, 3) Usage driving, 4) Renewal securing, 5) Driving upgrades.


There has to be enough 'skin in the game' to make selling after the initial deployment worthwhile as that is where the real profit lies in The Cloud.

Sunday, 17 July 2011

Small Business? Think Big

If you are a small business, the last thing you need to worry about is how much reserves and capital you need to keep on hand to expand. If the opportunity presents itself, you just want to take advantage of it.

I have bleated on about The Cloud and so it is best to illustrate how to organise your IT so that you don't have to worry about it as you grow. You just add users as and when you need to rather than having to worry about whether you have enough storage and dedicated servers to run your business. It also practical advice on how to secure your data from the most common threat - forget hacking, it's good old theft.

So here's a heads up on a few recommendations. I started my small business using TASBooks software. It's a great, easy to use package and even a non-skilled finance person like me can easily keep my books up to date. I farm out my payroll to a professional who for £150 per quarter does the payroll calculation, sends the necessary filing to HMRC, calculates my VAT and does the same and my P60 once a year. It's a good service. Because I have some international customers, I now use TASBooks 2 which has multi-currency. I have needed some support so I now pay £372 a year for support which I use infrequently, but when I do I need it badly! So it's a no brainer, I have to have it and it at least gives me the odd upgrade too.

Then I pay an accountant once a year to do my return plus produce my accounts. That's around £1,800. In total then, I spend around £372 plus £600 plus £1,800 just for accounting which for the financially minded is £2,772. I could shave a bit here and there if I tried but that's the sum of it to date and it make me feel reasonably secure.

What are the limitations? Well the TASBooks requires a PC to run the software and I need to back up all the files which are not big. So I have Acronis software and 500Gb pocket drive. This means I have to be attached to the unit to do the nightly back ups but they get done. Goodness knows how I would restore but let's just assume I can. The backups often fail - I don't know why but I get error messages which I don't understand and I don't have time to check. I just hope the next night it works.

My laptop is my work machine and so it runs the TASBooks and the back up manager - and if I want to do any accounting stuff on the fly in some down time, then that's the machine I have to use. If I am on the road, I can't back up - pure and simple.

I used to run ACT from Sage as well and keep a support contract which last time I paid was £180 per year. I found I didn't need much support but I could never get functions like group mailings working. Also, it requires back ups and it runs on my laptop.

I actually have a hosted Exchange Server at Fasthosts for around £90 a year and I host my domain there too for another fee and I get around 2Gb of mail storage space there in the deal. My website is controlled by en external contractor and consequently it hasn't been updated for at least 3 years.

I am a small businessman on the road. The issue for me is if I am on business and either my laptop breaks down or I get robbed, my entire business fails. It's that weak a set up.
Only my email is half resilient as I could start up again with a new machine quickly and Fasthosts have all my mail data safely on their data centre site in Gloucester and their tech support is pretty good. People try to sell me PC maintenance but you cannot replace data and applications too. If they are lost it is a nightmare trying to piece it all back together. And as a small businessman, I haven't the time or money to think about building in resilience. There is the nightmare of reloading all those little programs I use too like PDF complete. My business is billing clients.

So here's an alternative. Either host your Exchange server as I do or go with a Cloud based solution. Microsoft 365 at £15.75 on their absurd charging levels is the starting point of choice and grin and bear the lunacy of running it locally, having a SharePoint back end that you will have to work around but at least you are resilient. Google Apps is another alternative at $50 per user per year but for those working in Government areas the servers are unlikely to hold your data in this country while if you work a lot with MS Office people you may find annoyances around compatibility of files. But the advantage is that you can access your mail and files from any device including a smartphone.

Then your accounts. I am now looking at going with www.inniaccounts.co.uk. It has a starting price of £69 per month and this not just gives you online accounting software backed up in The Cloud and accessed anywhere via the web but it also gives you, in the cost, all the bits that I have detailed I outsource as above. An accountant at hand to do your filing, VAT returns, and your end of year accounts plus payroll. That's just £828 per year all in. That's a saving of £1,944 for me.

I have also gone Salesforce.com for my CRM and that was on a deal at £120 for the year. Now I can group email to my heart's content but all my data is backed up online and I can access the program from my iPad and laptop or any machine anywhere, any time. That's a saving on annual costs of ACT of around £60 but with the data automatically cared for.

Then there is Evernote of which I am a huge fan. At base level this is free. It allows you to keep multiple note books on things like projects into which you can pile web pages of research, files, emails - anything. It's all online so it's automatically backed up each time you add something and it is synchronised over Android and iPad if you want so these notepads are available to all, automatically as well as working offline. The premium version which gives more space is £26 a year. Microsoft OneNote, it's big competitor which I bought and never used, is a few hundred pounds.

It's my end of year this month, so I am thinking about these things as I am faced with an upgrade dilemma on my excellent Lenovo X200 laptop. I am on Windows XP and Office 2007 although the Exchange Server is actually Office 2003. I now do around 80% of my work on my iPad and love it as it is convenient for emails and note taking plus working in Salesforce.com. I have to go back to the PC for things like accounts and presentations as everyone works in PowerPoint and I need to project things which the iPad is weak on and printing is not a good solution yet.

But to upgrade it will cost me £134 for Windows 7 and £350 for Office 2010 and I am not sure it will work with my hosted Exchange. I have trialled MS Office 365 and Google Apps and on cost and usability Google wins but it's a Microsoft world and I cannot be an island of incompatibility with my clients - or just risk it. But MS 365 is so annoyingly clunky and not simple - it just peeves me that this is the best that the largest software company can produce with all those vast resources of brilliant people at their fingertips. Think customer, for goodness sake!

Rant over, I have to work out which way to go and it's likely to be MS 365 at £15.75 per month. While I just have to sort out the main back up and retrieval software as Acronis is ok but I want something more flexible. Of course, my data is sensitive and I don't want Americans snooping at it, as one comment was made to my blog yesterday, but our mails and data can be monitored any time if so desired so get real. Phones can be hacked too easily and banking details can be blagged simply as we have all just learned. I argue strongly that for the small businessperson it is far too hard to be as secure as the major vendors in terms of data control and security. We don't have the money, the scale and the time to do it as good as Microsoft or Google. So a solution outsourced to either, in my terms, is far more secure than what I have today.
If someone steals my laptop, they have everything. If someone hacks a server in an office or gets a back up tape or a stray USB or someone leaves a laptop on a train with the customer database on it, then they have the crown jewels. When it's all on the web, the laptop is a useless to them on that front.

So in my above examples, I would save a considerable amount of money if I go to online accounts. I have already saved going with Salesforce.com and Evernote. And it's likely I will succumb to Office 365 which also gives me a new website although I am toying restarting using WordPress as it is so simple, associated with blogs which I do all the time, and it's darn cheap (plus there is a free app on the iPad so I can update it on the fly).

Just with some simple thoughts, I can off load all my IT worries to The Cloud, save money, get security and resilience, avoid expensive one off upgrades and scale up if I need to at a smooth monthly cost. I even replace my very nice accountant which is the only downside.


But business is business.

Saturday, 16 July 2011

The Cloud? Nah, it'll never take off

The Cloud? Nah, it won't happen. People still want to have their cosy Microsoft Office environment on their tight knit and safe Corporate network.

In less than two years something odd has happened. In more then one major quoted company I have worked with, over 10% of the user community now use Apple Macs as their PC of choice. These companies are not fuzzy designers or lovey media types they are plain old IT companies with rules and regulations on what PCs they buy and what applications the company network runs. They even have rules and regulations on internet use and social media restrictions during work hours. They are completely normal.

So how the heck did these Apple Macs get in there?

That Steve Jobs is a canny sort. He reinvented a company that was almost dead, out of cash and ideas and not just saved it but turned it back into a being vibrant, successful company again. And in doing so he changed the Corporate world. Central to all of it was The Cloud - without it he could never have achieved it. You see, Jobs took gadgets and made them the must-have devices of choice of businesspeople. First iPods - no threat to the IT status quo there. Then came iPhones and suddenly we had a funky device that linked to a shop online that also backed up your data and you could buy tons of applications easily - and cheap as chips.

It was first in the wave of clever smartphones that we all wanted. But surely these things were leisure devices? These were not serious contenders as business productivity tools? By the time the iPad came and the new wave of mobile innovative computing had took hold, many vendors had woken up and smelt the coffee. Via the back door, Apple had set a new agenda for computing. By getting executives and workers alike to buy effectively gadgets with their own money, an upsurge of revolt against the IT rules occurred in companies across the globe. IT managers wept as CEOs relented and allowed iPhones and iPads to be bought and for users to express choice and buy Apple Macs as their PCs of choice.

Apple came back into mainstream Corporate computing via the back door - from left field. And nobody saw it coming. Using the Cloud as the tether not the network, Apple totally revolutionised the way in which we bought applications and the price which we paid.
Executives not only had Macs and iPads but they had tens of small applications running on them, some business, some leisure which helped them to do what they wanted. You could now just flip open your computer and quickly dash off an email wherever you may be via the phone or WiFi network while listening to music and without all the rigmarole of linking to the home network. The Cloud made it all happen easily.

Computing has got innovative, exciting and sexy again. Luddites and Victorian minded companies like Microsoft are trying to pour scorn on these upstarts like Apple and Google. They can never challenge Microsoft on business-grade computing. People love and need Microsoft Office on their PCs, USB ports to tether to devices and strict rules governing what productivity tools they use. They need Office because that's the Corporate standard across the globe. Don't they? The Cloud is what Microsoft will define it to be and it's just a bit of extra connectivity but the good old lumpy, maxed-out PC is still the business workhorse.

The revolution has already started. The Cloud - no - the internet is the platform and it's giving people the power to do things unimaginable. All those years ago, Microsoft gave us that power to be individuals in a business world full of rules by opening up possibilities. Now it's being the matronly old lady that tells us that we cannot have fun and do business at the same time. The Cloud and companies like Google and Apple say that it's different and people - business people - agree.

Apple is back in mainstream computing. Google is on the business scene. A whole new raft of exciting new companies are innovating as if we have emerged from a computing Dark Age. The future is new and exciting and it's fun.

On the same device a 16 month old kid can have fun with a 70 year old man swiping through photos and playing the virtual drums while the same machine receives corporate email and be a mobile computer. Suddenly, the world of business and leisure has merged and laptops need not be left to whir forlornly over weekends as the family goes for a picnic. The computer gets invited along too.

The Cloud has opened up the corporate network. The next logical step is for companies to reassess their use of business productivity tools in the light of what is going on around them. The Cloud isn't for everyone but every small business in the world today will be thinking how to maximise their sales not run their IT. The Cloud gives them the freedom to do just that. Being fast moving, agile, accessible, innovative and competitive is what business is all about not being restrained by networks and rules. Using The Cloud will help small businesses be leaner and win. It helped a big company like Apple to flourish again.

It's a competitive world out there and technology is changing by the minute. Companies can now share in the freedom of making decisions about IT that are not about 3-5 year windows but 6 months or less - they can adapt to the changing world much, much quicker. They can embrace social media on the fly to maximise business, they can answer phone calls on a virtual PBX while sitting in cafe at the Station just the same as if they were in the office. The power of what can be done is no longer limited by the purchase of a server or dedicated device to do it.

Just do it.

You see, The Cloud is being made out to be some mysterious, ethereal intangible plume of vapour into which data descends and gets lost. It isn't. It's a high grade network into which companies have poured billions to make it the communication vehicle for everything from voice to data for the future. It allows us to not just do business with people everywhere and make small companies look big but has given us a voice and platform to increase our personal footprints. It has also done the same for business. It has also allowed us to share in the economy of scale of expensive hardware and software by not making us purchase the whole caboodle to do it but join others who have knowing there is plenty of capacity for us all.

The Cloud has given people and small businesses scale. Use it to make yourself bigger and pay for only what you use. The Cloud is like having a high speed train service that doesn't just stop at stations but stops at your door step or wherever you are and takes you exactly to wherever you want to go, and is cheaper than buying and using your own car and getting caught in jams.


The Cloud is not just the superhighway for the future, it is the future of computing for small businesses.

Thursday, 14 July 2011

Google Apps vs Microsoft Office 365 - The End of the Story

The final twist in the saga on my trial of both Microsoft and Google came late last night.
The background is that MS Office 365 uses a SharePoint back end to store files. It assumes that you have a local version of Office because as a product that's how it is designed. So if you receive emails with attachments in MS Office 365 then the common way of storing the attached file is to upload or download the file to and from your hard disk. This seems a complicated way of doing it when normally you would just right click and save the attachment.

But it gets worse. If you want to attach a file in the SharePoint Team Site in MS Office 365, you have to email a link to that document and open that link. SharePoint allows you to share to up to 50 people outside your company. It's a senseless way for a small businessperson to work asking them to keep track of permissions.

And this is the point of what has been a trial that promised a great deal and delivered nothing. I cannot work like that. I am an SME who works at other companies' premises, at airports, at train stations, on the fly. I need products that keep me productive. I cannot be done with dipping into the administration page of my application every time I want to share something. I need an easy way of doing things. I need to have support for new, innovative devices that make my working life easier like tablets, smartphones and, yes, iPads. I need to be flexible.

Microsoft have foisted SharePoint as a back end on unsuspecting small businesspeople as the central storage area for MS Office 365 but it's an enterprise-grade project and departmental product that was devised as a Lotus Notes alternative. It's not a small business product, and it certainly is not a modern solution to the mobile executive.

I have tried very hard to see the way forward on MS Office 365 as I am at a point as an SME when I should be upgrading and I got terribly close to buying. My excellent Lenovo X200 laptop is keeling over with loads on its operating system and I daily face periods where it goes into stasis as every other PC I have ever had has done after a while - something never adequately explained to me but seems to be resolved by buying a new one and starting again. Now I would like Windows 7 not XP and Office 2010 features. To do this without MS Office 365 it would cost over £500 and or possibly a new laptop. That is not a solution - that is the usual 2-5 year upgrade plan PC and MS users have. Those days are t be ended by The Cloud as it's an unaffordable future and there are alternatives.

To go MS Office 365 and solve the problem that way means locking myself into a new method of working which is counter intuitive and restrictive for an SME. Frankly, I don't think Google is a better solution as I am too fearful of isolating myself in the short term, but they have the right approach. Whatever your device is, it's part of the set up.

The Cloud offers so much and in the key area of office productivity it is failing to deliver. Obstinacy and lack of innovation at Microsoft is killing the opportunity as they fail to engage with modern devices for fearing revenue drops while Google are full of their 'change the world' attitude which narrowly misses the point.

Whether we or Google like it or not, the majority of office users are Microsoft based. Google needs to embrace this and give sound alternatives. It is close to doing so but not close enough. Microsoft just seems in total inertia and denial. The Cloud and mobile computing will be what they say it is and that's that. Resellers will lump what they have as a market opportunity or get stuffed.

I have said it before. There is an opportunity for a company to come from left field and re-invent office productivity with the modern world in mind. That company may not be the owner of the operating system and it may not even be visible yet.


But it would be depressing to think this is as good as it gets. The Cloud promises much, much more. Someone embrace and give us what we need. Right now, I cannot afford to change.

Wednesday, 13 July 2011

Keep Taking the Tablets, Boys

This whole tablet thing isn't happening. It won't take off not in the way it actually has done already. It will be the way we design it to be. The market will stop, retrench and come back to our way of thinking. I have my fingers in my ears and I'm saying 'La la la la'. I can't hear you, Mr Tablet Market.

That's the Microsoft way, according to Andy Lees, MS Windows Phone President, who said as much at this week's WPC event in Los Angeles. In doing so Microsoft has banned its OEM Partners from using the Windows Phone operating system as the operating system for tablets.
OK, let's recap the story so far. By June of this year, Apple had sold approximately 25 million iPads, and that rate of growth in sales is accelerating with 6 million sold in the 3 months between March and June. In total between smartphones and tablets around 394 million have been sold versus a global PC population of 1.3 billion and a global mobile subscriber base of 5.1 billion.

Something has changed. Knock, knock Microsoft. Hello, is there anyone at home?

By 2014 it is estimated that there will be more than 400 million tablets sold globally at a rate of 185 million a year by then. It is thought that not Apple but Google's Android operating system (OS) will be the choice of over 40% of those tablet vendors and will be the biggest market share. It is estimated that Microsoft will have less than 13% of the tablet OS market, Blackberry falling to just 5%.

Why is it important to treat these devices as mobile smartphone type devices and not PCs? Don't we want to use them for business? Won't we want Microsoft Office running native on these devices?

The answer is that yes we will want them as hybrid devices as Microsoft describes them but the paradigm has changed. The web has become the platform so we don't need USB ports or adherence to corporate networks, we just need access to the web by WiFi or 3/4G. We want to use these lightweight devices to port business around like a briefcase, sharing folders in The Cloud but having local copies.

Just this morning I blogged that Microsoft Office 365 is already redundant for the iPad because it's SharePoint back end is the wrong animal for the job and it assumes bulky Office client software to be present in full on the local device. Dropbox is the obvious choice. GoToDocs allows creation, viewing and editing of MS files and PDFs and you can print them via WiFi (OK that's ropey for now but it's not rocket science to get it right). This application was downloaded in seconds from iTunes Store and cost less than a few pounds. And cost is key here - nothing in Apple's App Store costs over £30 at the last look. This is good news.

And this is the point. We don't want another device that takes an age to boot and has zillions of processes clogging up the CPU and memory. We want always-on, reasonably priced innovative applications that allow mobile working to be not just effective but affordable. We don't want over-priced, resource-hogging, out-moded operating systems hammering the performance. We want machines with high performance graphics that we can use as a business-grade engine AND as a recreation device - that lasts full day in battery and doesn't weigh a ton.

The tablet market is one of the most exciting things to emerge in the industry for a decade and products like Evernote lead the way in terms of usable business software. A superb MS OneNote alternative constantly synchronises the notes you make on all devices via the Cloud - and it's free. Why do you want vast local storage with that power at your fingertips?

At last the world of computing has wrestled free of Microsoft's grip. And it's fast moving and it's exciting again. This weekend Google Plus will attain 20 million users in just a short period of time - that pulling power is distorting our way of thinking and users like the way it's going. The web is making the world of computing available to any device and it's capturing our imagination.
Microsoft has to change. It is fast becoming a dinosaur and there is a feel of the IBM of the 80s about the management talk as they adhere to only things they know and want to hear. They talk only in the product set they have and cannot seem to innovate new things to tackle the companies stealing their market.

With the European PC market dropping by over 17% this year, the writing is on the wall as the tablet market grows into the space left behind. The world has changed already and Steve Ballmer, Lees and others at the top are standing Canute-like as the 'Sea of Progress' inevitably washes over them.

The problem is that Microsoft's numbers don't reflect it yet. And that IBM feeling comes back once again. The bolt from the blue - the one no one saw coming - has already struck but it hasn't manifested itself in the numbers as yet. The tablet market is established and the main player is not Microsoft - that has got to hurt.

Where a potential 13% of the tablet market leaves MS OS and Office is anyone's guess but with a potential 40% of it, Google would be rather hopeful that they may have a greater say than anyone else with Apple standing beside them.

You could not have predicted this just two years ago. Bill Gates once wrote a book, 'Business at the Speed of Thought'. Well it seemed someone stopped thinking in his company. And Steve Ballmer is reputed to have once fielded questions from an audience where he started by saying, 'Microsoft is right. Now what was the question?'


That about says it all.

Google Apps vs. Microsoft Office 365 - The Trial

A while back I decided to test this whole Cloud thing and trial Microsoft Office 365 and Google Apps. I have blogged that I was disappointed with some aspects of MS 365, well here's the results on Google Apps.

To set the scene I am a long term MS Office 2007 user and a small business who has a hosted Exchange server via Fasthosts. It's a good set up but it's actually an expensive set up - having cost me £350 or so to buy Office 2007 five years ago and then £90 a year for my hosted Exchange.

So Google Apps on paper has an attraction as for my size business it's free and at most $50/user/year. With this in mind, I set about setting it up to mimic my domain. The beauty of Cloud computing is that it is meant to take away the dirge and hard work of IT and let you focus on your business. Not as such, Mr. Google.

Google Apps has copious amounts of helpful written information which guides you through setting up the trial to effectively squat on your domain, mine being Calxeurope.com. This means it can effectively send and receive emails from there so that you can trial it properly. Microsoft set you up a dummy site which is very easy and useful. Google try to get too clever and by the time I read that I have to set up an Active Directory Object for each trial user I started to get frightened - and bored.

I spent hours looking in the Fasthosts Control Panel and then calling them to ask about this. After much angst, it was decided that as a hosted user, I did not have they rights to do so. The trial stopped in its tracks. Sort of.

So I decided to set it up anyway, going as far as it would allow me. Gmail is easy and I set up a new user in my domain with a slightly different email alias. From there I tried to enable Google Apps. The most bizarre thing happened. The Apps tried to load then jumped back to the set up screen, tried to load, jumped back etc. It did this without my intervention and would have continued ad infinitum unless I stepped in and stopped it which I did. Repeating the process it did the same thing for Calendar. I stepped back and tried it all again. Eventually it worked,
I sent email to myself, tried to upload files which worked although it confusingly asks you if you want to change format. But uploading folders failed with some error to do with Java. Things seemed to be OK beyond this. My uploaded spreadsheet opens with two pages, one is a large view of the title tab, the other is the subsequent sheet. How strange. It does the same for multiple sheets. But at least the content was OK. Creating your own docs is easy.

However, annoyingly, every time you click on something new a new window opens. Pretty soon you have multiple windows open and you lose your place. Badly. In fact, it's really daft. In Gmail, instead of organising mails, threads appear which you need to get used to but are good. Searching mail is understandably simpler from a web search company but it works. Then there are the adverts. Of course, I am a freebie user and the notion is that if it's free someone has to make money out of you so you are sent adverts.

That winds me up. If you are going to give something away, then do so in good grace and make sure they have the best view of what you are selling. Trust that it has a viral effect and that my experience will drive me to pay the fees required. Don't bombard me with adverts. This makes Microsoft the BBC of the business. No ads on their trial. I hate this new idea that free means money.

Then there is the 'Internet Explorer Compatibility' guff. Google sense I don't use Chrome so it tries to convert me with no reason as to why. So I don't. There that showed them. But wait a minute. I am in Gmail - now where is the link to Google Apps? There are buttons for Contacts and Tasks but where have my Apps gone?

There they are up top left a wispy menu I hardly noticed when I looked for them next to the Calendar and Chat. Nothing intuitive about the interface but there is a lot there. The view on my iPad is similar but I also have the GoDocs App and I haven't yet worked out how to sync my trial to this but I have used this App before and it's good but not great. Go To Docs is better for Microsoft users by some distance.

Google Apps is decent - it gives you up to 5 users on your domain and 8Gb for free. There isn't a worry about using local apps like Office because it is all served by the web which is the bit Microsoft misses. In the end, by some mystery, I can send emails back and fore from what appears to be my domain with my added domain user but not my actual normal email alias as the trial should do.

In reality, to make Google Mail and Apps work in your domain, you need to know where to look in MS Exchange. I don't have an IT manager - that's me - and I didn't know. I wasted too long messing about with this and it didn't work. SOHO and SMEs like me will lose the will to live if this is the case and this is an issue to Google - particularly as the whole point of The Cloud is to free us up to run our businesses. And they don't want to talk toy you as that would spoil their cost model. Intervention on the web is a money sapper. If I can't do it via reading the manual, I am not worth selling to.

For me, as a long term Microsoft user, I have to say that there is safety in what I know. For £15.75/user/month I get a full version of MS Office 365 running as per my set up today plus a hosted SharePoint back end which I don't have today. There is snug feeling about this. Moving to Google, even free, would be a risky step not knowing when compatibility may isolate me - and even though it's free for my level, the potential impact to my business if it fails me on a minor issue is potentially worth far more in terms of credibility or worse than the £189/user/year price tag on Microsoft.

Google has some way to go to convince people. There are still questions about MS 365 to resolve in terms of whether my add ins will still work like Salesforce.com, Xobni, Evernote which are now key to my productivity and I am not sure who can answer them. This is the final step for Microsoft in convincing users like me at the cusp of an upgrade not to desert them and go to Google.

Price says Google. Peace of mind and familiarity means Microsoft. Both teams have issues but I would pay the £189 on MS 365 vs Google Apps simply as I don't have enough time to get to know the new features, there are no add ins to make me as productive and the risk of making myself an island of incompatibility at a crucial time is there even though I cannot quantify that risk.

Microsoft still has the winning story. But not every business user is like me. To many, free vs £189 is a no brainer particularly when Google are constantly evolving. Coaxing people from PC to web is the battleground and Google have an advantage that Microsoft underestimate. They have never been a PC application. They are a web company through and through. Microsoft is a PC based company and it has a long way to learn that they are a distant second place or worse on the web.

Google Plus is out and already they reckon 20 million users will have signed up by the weekend. Microsoft should not underestimate the growing link between Social Media and business and office productivity.

Just as people fear and moan about Microsoft's dominant position on the PC, many are concerned of the insidiousness of Google on the web. Both companies behave badly from this point of view. But they are surely the main players in the grand battle for the hearts and minds of small businesspeople.


The battle has begun. I stay in the Microsoft camp. This week I will sign up to MS Office 365 and pay £15.75 per month. I'm actually quite excited about it. How sad is that?

Tuesday, 12 July 2011

Creating Value in The Cloud

Distributors and Resellers are struggling with the conundrum of how to create value in The Cloud.

At the recent Cloud Forum sponsored by CRN, no lesser veteran than Paul Eccleston of SDG, preached that Distributors must find value to establish themselves in the supply chain. He is right to a degree, particularly as some large vendors are actually working without their channel engaged as usual.

The business model is changing, yet software selling has changed over the years. Some vendors still sell shrink wrapped versions of their products but the majority of software is sold in electronically distributed, licence-enabled format. The distributor and reseller still have a role to play as they own the relationship with the end user. Now vendors are threatening these relationship by wanting to have the sales contract direct with the end user. This trashes some 25 years of working partnership between software vendors and their channels. The channel is under threat - and make no mistake. Paul Eccleston is right about value but he may be wrong to think distributors can add value in some instances.

The order of things may be due for a change. Some distributors who have been strong in the box world will not survive in The Cloud simply because the underpinning principles have changed. Some vendors are going to struggle as they assume that Cloud means just mounting their products on servers outside firewalls and amortising the cost differently. The problem is that those companies whose entire raison d'ĂȘtre has been The Cloud are streets ahead in understanding the new dynamics of the market.

Salesforce.com and others started small, selling in chunks to big companies and small. They earned their sales spurs by nipping at the edges at first and proving their concepts. Now, they run out Enterprise grade solutions across huge companies proving their scalability. But the basic principle has not changed - the web is their platform. They have all users at the same revision of software and new features are rolled out in short order to all users, the costs are fees per user per month. Salesforce.com has proved over time that The Cloud isn't about making software cheap it is about driving down deployment costs, smoothing costs and scaling the organisation when needed without massive capital outlays. There is nothing cheap about Salesforce.com unless you are an SME - and that's where they never forgot their roots.

For vendors and distributors alike, the party will be in the SME market space. Only nimble, high transactional sales suit the channel where they can turn small margins into High Return on Capital Employed by not having to invest heavily in the selling process. The problem is that Salesforce.com and all the others know that to win hearts and minds you do have to invest in sales.

This is the first area of value that SDG et al should be looking at. There is nothing simple about selling SaaS or Cloud software. Users need time to understand it, feel it and be reassured. For vendors wishing to make a fast buck, think again. For distributors, it has to be made easy. But the resellers is where the potential is. There are thousands of eager, loyal sales and technical people out in the field working at Resellers who have trusted relationships with their customers.
These relationships are not going to get trashed just because a large vendor wants to send them their contract. In fact, I would argue strongly that customers will want more of their software and services provided on one bill with one 'neck to choke'. The Reseller is still the best route for this.

So, Distributors, the relationship and management of these Resellers is still your forte. And so, vendors, your goal is to engage SMEs and release the potential of The Cloud.


The ingredients are there. You just need a cook who understands the recipe.

Monday, 11 July 2011

Clouding the Issue

Recently, a senior executive of one of Britain's best technology companies questioned if The Could will ever take off.

In fact, he challenged me to name a single application that ran in The Cloud upon which a business depended and before I answered, CRM/Salesforce.com was not included in the list while NetSuite didn't have enough international support.

Most people are floored by such a question who call themselves Cloud experts as everyone thinks that Cloud means taking applications from behind the firewall and putting them somewhere outside. The tight, secure ring fence known as firewall has always protected companies well.

My answer to that executive was that over 70% of his daily transactions occur on the web as his ecommerce front end was an extranet service that was not only presented to customers by an internet based portal but it was served by servers based somewhere in Europe. Whatsmore, when the main servers in the UK updating this application are over-used, they grab virtualised resource from under-utilised servers and storage somewhere - anywhere - else. This is Cloud computing and without it his business would be dead in the water, be too costly to run and prey to all his competitors.

Banks serve customers over the web via Internet Banking Services and IFA portals, we buy our groceries, flights, insurance, gadgets, gifts, greeting cards, flowers, wine and much more millions over of secure transactions all over the world every second of every day. The Cloud is truly all around us and without it commerce would effectively cease. As the High Street empties of retailers and transactions, the internet fills the vacuum with a huge growth in sales and volume of trades.

The Cloud is commerce.

The problem about serving traditional office productivity applications from outside the firewall is that it strikes fear into executives. No longer can they feel as if their email is safely cluttering their network and accumulating exponentially in vast, expensive storage facilities and redundant servers are safely gathering expensive dust in long-forgotten rooms, they would have to face trimming their bills, laying off IT staff and be able to smoothe their IT costs as they get maximum ROI on their IT spend instead of woolly equations from well paid IT staff keen on saving their jobs.

FUD is the order of the day. Software vendors like even the mighty Microsoft are in a pickle as creating a truly web based version of their products is very tough while the sales model is so radically different that they fear their revenues will fall or cannibalisation of existing customers installations.

It is time to get real. Events like the Sony XBOX hacking are mammoth and illustrative of big issues but lapse security is lapse security, whether in The Cloud or behind the firewall, the issue remains. Some of the most secure systems in the world as just as vulnerable to professionals who have equal intelligence and skills.

A friend has insisted on rewiring his house with CAT V cable so he has a a point in every room because he fears WiFi is unsafe. So why not pay extra to have your house rewired with old technology and then watch the world move ahead as WiFi becomes the standard way of network communication? If it was that insecure we would all be on our knees and penniless by now is my theory.

The Cloud is underpinning much of what we do today. There is still a long way to go to get strong alternatives known to office productivity tools we use today. Office 2007 has remained the same since 2007 surprisingly and it costs £350 to upgrade to 2010 and whatever the Exchange cost plus Windows 7 upgrade at £189 too. Google for $50 a user a year has had 125 feature additions in the last year.


The Cloud is truly here and the world has already changed.

Xerox, Canon, Ricoh Buying Small Resellers - Why?

What's with the strategy by high end copier/printer companies buying small resellers?

Xerox continued this activity last week by buying a competitor's reseller in Scotland and another in Middlesex. I have seen Ricoh do the same in Scandinavia on a grander scale where at least the reseller in question was a strong Ricoh player while it had also had several geographically dispersed offices and had a strong service capability. That at least augmented a manufacturer's position in the territory and gave it a working office base. In Xerox's case it just seems to be taking out a tiny portion of its competitors by buying a reseller and converting it to Xerox.

If that's a strategy, then it seems a very long play as there are thousands of these resellers all over Europe. It's also expensive, as you are either buying troubled or defunct companies with problems and debts or paying top dollar to owners that might play the vendors off against one another.

But where does it get you long term? Lots of small companies to be assimilated by giant companies it looks like. For the sake of a tiny gain in marketshare it seems a crude way to move forward.

This is likely the issue for Xerox and similar companies. The markets are mostly saturated and they are only after refresh and upgrade business mostly at lease break points. If a reseller sits on a significant number of opposition products under lease, then this option of moving the marketshare needle may the last hope.

But it's an awfully risky plan. Let's hope all the skeletons in the cupboards of these small companies are only small ones or else this strategy could be a financial fiasco.

Head in The Cloud


Someone summed up one of the great areas of misunderstanding about The Cloud during a stroll in the park at the weekend.

"You see, Apple just don't get it," said the person. "The iPad has no USB port. How can it be used as a serious computer and be secure?"

It's difficult where to start with a comment like that but it appears dragging people into The Cloud is going to be a long hard slog. My retort was that a USB port was not required as you can back up all that you want to The Cloud. Even on my current project, we use Dropbox as a central storage drive which is shared among the project members. It means we can access the shared drive with any device we like, whenever we like. No need to carry around memory sticks with the last but one version of the file on it that could misplaced or stolen.

There is a more serious claim about the iPad's printing ability as it uses WiFi only and I would concede I have yet to find a program that robustly connects to my printer and then prints either at all or at a speed that is acceptable. And that the output looks like what you are printing. This is a far more serious situation than Apple would care to admit.

Interoperability with PCs with the iPad is only limited by the PC world's tree hugging. I can use Google Docs and GoDocs on the iPad and again store all my files in one repository in The Cloud, questioning the inflexibility of Microsoft Office 365 which does not recognise iPad as web device that should be able to just look at the program.

It's a serious weakness in MS 365. Microsoft are taking an age coming to terms with how to design a product that can work in The Cloud and give the benefits of the environment. So much of what the product delivers requires a local version of the Office programs to be resident on the device running the program. That smells of misunderstanding and cop out. It is also highly confusing.

In my trial of MS 365, I have given up using the program on anything but my laptop which runs Office 2007. The only benefit left in the program is the SharePoint repository but it begs the question why you would want that if Dropbox and many others give you 2Gb for free.
For me, my hosted Exchange server is about the best I can get. At least the email is sorted out by someone else and I have a Control Panel to fiddle with adding or subtracting users, password changes etc. But this set up means extra cost.

Meanwhile, out there in Cloud-world there are umpteen solutions for email, messaging and office type products which are low cost and totally Cloud geared. The problem here is that most are no-name brands which will always have a problem getting into Microsoft's world.

It remains that Google is the only serious competitor to Microsoft. But it's interpretations of MS files leave much to the imagination and that interoperability is going to have to get better in order to compete effectively, particularly at anything above SME level.

But as a small businessperson, SOHO and SME, Google remains the viable solution in The Cloud. For now, as I am seeing Microsoft tomorrow, I shall continue on using MS Office and hosted Exchange but I seriously want to jettison any IT issues for the future.


The Cloud is the small business person's friend.

Wednesday, 6 July 2011

Microsoft Office 365 Under the Cosh

I have been a bit negative about Microsoft lately, particularly when it comes to their strategy concerning channel and their Cloud version of their productivity products, MS Office 365.

So let's take a look at the Cloud based product itself - Microsoft 365. For those who have read my blog, I also looked at Google Apps which I trialled the free version of. This allows up to 10 users at no cost - and I am not entirely clear at this stage what is the difference between the free version and the Business grade version for $50/user/year.

MS 365 was easy to start up with. The Microsoft website is clear and easy so within minutes I had been set up a trial thanks to following the link in an email sent by my 'Reseller of Record', Core GB. Any resultant sale will now be attributed to Core and it was thanks to the young Irish fellow I met at the Cloud Forum.

The start point on MS 365 is a Home page as you would expect. Here you are invited to set up your computer to work with Office 365. Already you have been allocated a dummy domain based on what your company name is which gives you a temporary email address. To import your contacts it is easy. Just export your current MS Office contacts to a CSV file and follow the import instructions. There is a decent user guide. 365 Outlook gives you are very washed out appearance and you have to work hard to decide what is what. Best to send an email to see how it looks I advise then it becomes apparent there is an email inbox with a viewing panel which wasn't obvious to start with.

Then you get Lync which is a program you have to install. This allows peer to peer communication and mini-conference calls. I haven't used it yet but it reminds me of Skype with Webex features - that could be very handy.

Then there is the 'Team Site' which is in fact a hosted SharePoint. This allows multiple people to work on the same document. People can check in and check out documents and it appears to even have a workflow and approval paths. Overkill for me but really useful for a small business working on bids or something. Remember, the Team Site is the communal area for file storage.
I clicked the Word document creator and it was easy. Just enter a document name and you have a browser based Word facility. Yesterday afternoon when I signed up for this, I found the program slow but this morning at 7.00am it seems quicker - rocket scientists will know the answer. So I can create Word, Excel, PowerPoint and OneNote files as a minimum. I can even 'Open in Word'. Now I assume this feature only works if I am running a local copy of Word or the upgraded version of 365 - I need to ask Core as it is unclear. Would I need to buy a local copy as well, some might ask? Of course, I have Office 2007 on my machine already and I was expecting to cut the umbilical chord to this. I will find out later.

Once you have created, edited and completed your document, you will have noticed that there is no 'Save' button. Auto save is constantly saving the document, just like Apple iPad. You can 'Save As' on your Team Site where the files are visible. At any time, you can follow they link top left to navigate around your site.

At the Team Site you have an internal 'Twitter' type feature to let everyone in your team know what you are doing - bit like Salesforce.com's Chatter. You can share the site with additional people. You can even 'Publish' a document dependent on your user settings - this reminds me of Evernote where I can write a note and then publish it as a link for people to read as it is hosted in the ether - almost as a blog article but brilliant for team working. Microsoft have now included this and we are beginning to see their thinking. And it's not bad.

Like Google, once I am looking at the files I have created in the Team Site repository, I can create Folders but I haven't worked out how to drag and drop files into the Folders yet - it appears you can't. That's odd. You can download copies of files to your TeamSite and upload files to your machine or send them to - all very easily. You can easily edit properties which is so imbedded in Office usually that I never do it - this is neat in 365. You can add new TeamSite pages so it works as if you have a website - which it is.

Like Google Apps, there is also a free associated website. It looks very simple and clean. It also looks easy to edit and keep up to date which is better than my current one where I have to submit changes to a third party. Guess what? I don't bother and so my website has remained static for over two years - a carnal sin in online marketing but usual for small businesses. This means I might get back into changing things and I have been toying moving to WordPress to make things easier. However, like Google, the website is very limited.

There is an easy wizard on how to set up emails on your mobile phone and most operating systems are included. That's very good as Google have it easy on Android! There is an easy Admin site to add users or change permissions and passwords - you can become the IT manager for your business from one simple window and manage all those fools who forget their passwords. Now they ring you instead of a help desk. You can set permissions on documents, settings on Lync and set up dial-in conferencing for which I am sure there will be a charge? Yes, it gives you a list of providers but at least that's helpful.

This version of MS 365 costs £4/user/month at tiny business entry level, or £6.50 for an SME and it compares well to the free one from Google. Here's the interesting bit. Access MS 365 on your iPad or tablet and you get a Lite version of Outlook which is basically webmail but tuned for the tablet. It's actually really good until you realise it is webmail so you have less features. This was so close to being better than Google and it's a shame Microsoft went so far and then held back. It is even called Web App instead of 365 to confuse you more. The rest of the TeamSite remains the same and no tweaks are needed. Microsoft have got it - the web is the platform not the device. Well, almost.

So I am not sure what I would need to add to this basic version to give me what I have today - MS Office Pro on my laptop and a hosted Exchange at Fasthosts which costs a further £90/user/year. From Frank Bennett and Dan Lewis' excellent booking on selling MS 365, it appears I will fall into 'E2' which is around £10.50/user/month (according to Insight UK's site) - there're around 10 price points and two tiers versus one price from Google.

That's pricey. Very pricey.

I paid some £400 or so I think for MS Office 2007 some 5.5 years ago and have paid around £90/year for hosted Exchange. I have not upgraded in that time. To upgrade to Office 2010 it's over £300 plus $189 for a Windows 7 upgrade. To buy the same MS 365 it's £10.50/user/month or £126/user/year. Google Apps, full version, is $50/user/year. There is a huge justification for Microsoft SMEs to go MS 365 based on cost savings on price per user and upgrades (assuming Microsoft don't charge for upgrades which is unclear as yet) based on these numbers as being a slave to Microsoft is actually very expensive if you want to remain current. E3 gives a virtual PBX as well for £15.75/user/month.

There is familiarity in Microsoft and there is a comfort in using what you know, although I think there are significant differences in the old vs the new to warrant a long, hard look at Google Apps for usability. But in pure money terms, if I am to scale this up in an organisation, this is mighty costly versus Google Apps. Mighty costly.

There were lots of nice things in MS 365 but there are a ton of nice things in Google Apps. Face to face, on cost, I would have to go Google Apps. The price difference is around 3:1.


That's too much for an SME to swallow and justify.

Tuesday, 5 July 2011

Making Money in The Cloud

If you are a reseller you may understand the potential for reselling in The Cloud. The problem for most will be, how can I make money out of selling in The Cloud?

At first sight things don't look too good and it's confusing. Everyone seems to want a piece of the action. There are vendors with their software wanting resellers to buy into new certifications. There are hosting companies wanting a slice of the action. Then there are service providers who are offering to add a billing and management layer to the applications resellers want to resell. And then take a look at the margins on offer from the vendor.

Let's be honest, it isn't looking exciting. By the time a reseller has potentially paid hosting fees and for a management player the thin margin from a starting price of £4/user/month at Microsoft 365 is not that compelling. Even if the reseller just acts as an agent to Microsoft, the fees are pretty low although at least there is no slice paid to hosting companies or management layers.

For those who have some investment money, building their own hosting centre is a huge risk - there is massive over capacity in hosting centres all over the place and pricing is already aggressive. Besides, for every reseller who attempts this, it risks prices going up when Cloud is about reducing costs to SMEs.

So you have to be pretty confident that you can sell an awful lot of seats to make it all worthwhile. And here's the rub. The margins on offer are not particularly conducive to making a market on this.

Traditional software vendors talk blithely about The Cloud being a new, incremental opportunity yet they apply traditional pricing and margin strategies to it. The risk with that approach is that resellers will just stick to what they know. These traditional vendors may fancy their chances of working direct but, as in the case of Microsoft, they got where there are by using a leveraged model of channel sales. As Microsoft goes to build its Cloud business, there is a strong likelihood that its biggest competition will be its own traditional channel selling on-premise solutions as usual. The danger here is that by adopting this strategy, Microsoft is taking its eye off its main competition in The Cloud - Google.

In fairness, original SaaS vendors like Salesforce.com and Google never leveraged a channel and sold mainly direct. Only recently have they adopted channel as a route to market on a more wide scale. There is good reason for this as selling SaaS takes a completely different approach to selling on-premise.

The key difference is this - to sell SaaS successfully the sale itself is only the start in the journey. Driving usage and adoption is the critical factor to long term success. It is why SaaS vendors trusted their own sales teams to do this as resellers, like traditional software vendors, end their journey at the sale itself. Sure, you keep your relationship to get upgrades, but you are not worried about adoption as if a licence isn't used then you still get the money. In SaaS/Cloud, if a licence does not get used it won't be bought again. If usage is not high, companies will question value. If adoption is not achieved then renewals will dwindle.

It's a different selling world. It's a different reward model for salespeople.

The biggest mistake a vendor can make in The Cloud is to not reward beyond
the point of an initial sale as this is only the start of the journey to success. Driving usage, adoption and customer experience is vital to success. If the subsequent rewards for renewals and uplifts in licences aren't there, then salespeople will switch off.

At PlaceWare this was the driving force for salespeople. At Salesforce.com it is the critical factor to success. Monthly billing models mean that renewals have to be a minimum of 60-70% but you want most renewals to increase licences at the anniversary of the sale. You can only achieve that if the salespeople remain actively motivated.

Already, this is where vendors with the strategy of taking existing price and margin structures and amortising them to mimic Cloud risk failure. No names and no pack drill but some of the biggest vendors in the world are making this huge mistake. It means that there is zero incentive for the channel to engage.

If the channel doesn't engage, they risk losing their biggest advantage over Google. The advantage is using an experienced, loyal set of foot soldiers in their thousands who call on the same customers daily. This loyal salesforce believe in the vendor but need to make money.
For Google, if it now comes to a straight direct fight with the likes of Microsoft then things have changed. Google is a web only company and is now one of the biggest brands in the world. They are the lionshare of all search in the market and they are by far the largest advertising system online. The message is that Microsoft needs to include its channel to help it win.


We thought we would never say these words but Microsoft are no longer dominant enough to win a direct fight with Google in The Cloud. That battle has already been lost.

Friday, 1 July 2011

Microsoft 365 is Out - Yippee or So What?

The top boys were rolled out at the London launch of Microsoft 365 this week and loyal resellers stood by their side.
Hails and whoops were in evidence as the long awaited official launch of the Cloud based Microsoft Office solution became a commercial reality after a longish period of beta trial. Microsoft resellers can sell the product - well sort of. Basically any end user is provisioned and billed by Microsoft, the reseller gets a finder's fee. The ongoing customer relationship is with Microsoft, not the reseller. Unless, of course, as a reseller you are big enough to host the solution on behalf of clients yourself but it's not entirely clear what the costs involved are for this and whether it will work out more expensive for users. I'll try and find out.

But there is no doubt that there is considerable angst amongst MS resellers about this very profound change in policy by Microsoft. Resellers basically will lose the commercial relationship on the product with clients and get no share in future revenue. To boot, at a start up cost of £4/user/month it is unlikely that resellers will fall out of bed in order to sell MS 365 to small users as the margin involved in a one off finder's fee sale is far less than the cost of sale. Let's face it, anything less than 100 users is a pretty grim return.

The sales model looks flawed. If Microsoft want to get into the SMB/SOHO market then they are going to have to do it themselves when most of those companies actually want the knock on the door of the friendly recommender who sells their IT kit. There is an opportunity for the likes of PC World but I would suggest Amazon might be the better chain as they are more geared for small transactions.

Somehow, it needs to be automated with lots of resellers setting up easy to configure portals where customers can get access to MS 365 quickly and with low intervention by salespeople. If all resellers could customise the portal too, then why could they not participate in the sale rather than remain a one off third party? I have no idea and it shows lack of planning.

The problem is this. I just set up, out of curiosity, Google Apps on my laptop on my own domain. It took precisely 5 minutes and cost nothing. Zip. Nada. I get 7.5Gg of email space and I have access to a ton of Google fancy apps as well as the core business ones. That's it, sorted.

The same on Microsoft costs £4/user/month and there are not the myriad of extra apps associated with the domain name. Further, SharePoint which is at the heart of MS 365 as the file repository does not allow multiple users to access the same files.

It's clear that existing Microsoft partners will all be trying to punt MS 365 to larger customers to justify the selling time so who will address the SME market space is the big question? Will that be surrendered to Google? Surely, SMEs were the point behind MS 365 and will be the heartland of Cloud applications?

Some People Don't Get The Cloud At All

You may be surprised to know that many people in the industry, even amongst the channel and the vendors, don't get The Cloud and why it is important to small businesses. Such companies constitute 97% of the hundreds of thousands of companies in Britain and carry the bulk of the workforce, around 13 million staff in total. The opportunity is pretty big is the first thing you will notice. I have heard a director at Microsoft say that they expect up to 60% of all seats of certain software will be based in The Cloud in the future.

These SME companies want scalability of services, up and down, at a smoothed cost, lower risk and without massive capital costs every so often. They don't want to add or upgrade a server every time they go above a certain size of user or find it is out dated within a year or run out of disk space every 3 months or pay for licences they don't use as they have restructured or been sold. The world is changing and companies understand that The Cloud means that they get real scalability by buying essential services through The Cloud.

The Cloud is a reality anyway. Most companies run websites and domains - these exist in The Cloud. The internet, believe it or not, is in The Cloud. Nearly every company in Britain then already uses The Cloud for some part of its business. Even huge, security befuddled companies like banks use The Cloud - internet banking, IFA portals etc are all presented as Cloud applications and are highly secure. Travel agents, supermarkets, flower shops - you name it they all have secure Cloud based options to purchase on the web which now constitutes a huge portion of our annual spend and it is growing exponentially whereas High Street trade is falling. The Cloud is actually quite passé when you really think about it.

Google as a company was predicated in The Cloud and I doubt if anyone has ever received a disk with a Google App on it - the whole thing is based in The Cloud. A significant number of people even in corporateworld have their first task each day to look at their Facebook page - in The Cloud. It's little wonder why such companies have massive valuations when they have that kind of reach.

It is a short step then to believe that the new generation of business applications will be served in The Cloud. The old objections on downtime and security have long since been dealt with. Today, the bulk of the world's financial transactions are conducted in The Cloud. What happens if internet connections are lost is the same as the corporate network failing which happens more regularly than most would admit. The fact is that I have a full mail client wherever I am in the world on any device I carry accessing the web by broadband, WiFi and 3G in any combination. I am online to all my applications from mail to CRM to travel agent to Evernote to back up manager all the time. I am trialling my accounts on NetSuite too.

I still run an Exchange server through a hosted site as I have tree hugged. But why will I continue to do this? MS Office 2007 is still the same as it was when I bought it 5 years ago. The applications have not moved on, it looks the same and crashes in exactly the same way with monotonous regularity when it cannot find its server even when my other applications work fine. Why do I keep it? Probably because I am a slave to the Microsoft machine.

Things are changing. For simple monthly costs, I can have the vast majority of every serious applications and thousands of frivolous ones served from The Cloud - securely and with 99.99% uptime - and wherever I am, using whatever device I have. As a small businessman, I don't have to worry about IT, managing servers, increasing disk space, security and the like. I just focus on creating revenue with the right tools at my fingertips, wherever I am. Scale that up to a 100 person company and suddenly you can see a fast moving, dynamic workforce dedicated to revenue creation and not encumbered by outdated or constrained systems. Even as I waited to get acces to my client's network this morning, I was able to access salesforce.com, my internet banking facility, Twitter and Evernote using 3G. I can be productive more easily in The Cloud, unrestrained by creaking private networks with limited accessability.

As Google says, the web is the platform not the PC. For those executives who do not get it just watch the PC market as it declines as new platforms drive sales. Just watch how traditional, on-premise licence sales will drop as SMEs drift toward buying online and only what they need, when they need it. It's all there to buy - even Microsoft is there now. The problem for SMEs is buying it all from one point, with one bill and having 'one neck to choke' if it goes wrong is not viable today. You have to buy from multiple sources, often only from the vendors themselves. The traditional channel is at risk but SMEs would not be happy to have to keep buying from multiple sources. The channel somehow has a role to play.

The change is happening. Embrace and get prepared or whither on the vine. For Microsoft, to make MS 365 successful, they need a business model that leverages their partners for fear of cutting them off. Considering that channel of thousands of partners has put Microsoft where it is today, that isn't shrewd thinking.

However, as was echoed by distributors like SDG and vendors such as IBM at the Cloud Forum this week, a value proposition needs to be clarified to see how the channel can play. Distributors want justification on the benefits - in my opinion, that shows a lack of understanding. If you want to share in the benefits, you need a plan. In my experience, markets have rarely landed on a plate. You need to go make it happen. It seems that in many cases in distribution, no decision is at least a decision. I don't think vendors will wait - as in Microsoft's case they have defined their own plan in which it is hard to see where channel exists in the future. No decision could cost distributors dearly if that's the case.


Meanwhile, MS 365 could be brilliant. It could also fail. Now wouldn't that be an unusual thing for Microsoft as Google Android and Apple start eating into their share of the device operating system market?