After a year in which it changed CEOs, took a write-down for unsold tablets, pulled some unpopular Web ads for smartphones and missed Wall Street expectations, Microsoft appears to have righted its course. In fact, the Redmond, Washington, software giant appears to be in a stronger position than in years.
There are many reasons why, including the emotional boost and sense of purpose that CEO Satya Nadella has provided the company. But ask members of Microsoft’s partner ecosystem why they are smiling of late and many will say “Office 365,” the company’s cloud suite of collaboration, communications and productivity tools.
Sales have grown steadily for the past year and are even accelerating in many partner organizations, according to solution providers. The numbers prove them right.
Back in January, Microsoft said the Office 365 platform was its fastest growing business in history. Since then, momentum has continued to build. In March, the company unveiled a free, read-only version of Office for the Apple iPad, which has since been downloaded more than 27 million times. It has encouraged users to buy more full-featured subscriptions of Office 365.
In the fiscal 2014 third quarter ended March 31, the company announced that its Commercial Cloud business more than doubled year-over-year, led by a surge in Office 365 subscriptions. In a call with analysts discussing the company’s quarterly results, Nadella said that he was “really, really excited about what’s happening” with the company’s franchise. Office 365, he told the financial community, “is the core engine that’s driving a lot of our cloud adoption.”
Today, Office 365 is on track to reach annual sales of $2.5 billion, according to Microsoft. At that level, the business of Microsoft Office 365 will soon rank as one of the top 20 largest software companies in the world. Moreover, the growth in the platform means that Microsoft could soon become one of if not the world’s-largest provider of Software-as-a-Service (SaaS) technologies.
Today, one in four Microsoft enterprise customers has Office 365. In addition, there are more than 3.5 million subscribers of Office 365 Home Premium, according to Microsoft. There are also more than 1 million users inside the U.S. government. And quarterly uptime, which last quarter reached 99.99 percent, has increased of late despite the additional demands of new users.
No wonder partners are quickly building their Office 365 franchises. Their goal? Develop greater competencies and hone their competitive differentiations.
“The opportunity to lower IT costs is encouraging more businesses to move their IT operations to the cloud,” said integration giant Capgemini. “[We help] you make this transition using Microsoft’s Office 365, an integrated toolkit of SaaS components that enables you to implement a business-aligned cloud adoption strategy.”
Like Capgemini, Geocent, a Metairie, Louisiana-based Microsoft Gold partner, is fast at work building out its Office 365 offerings. It is hosting seminars and workshops that leverage Microsoft’s three-stage, Fast Track program.
Some partners, including Microsoft’s Office 365 Partner of the Year for 2012, Cloud Business of Guildford, U.K., have focused on helping customers prepare for the daunting task of migrating from other Office platforms to Office 365. Cloud Business developed a sales-assessment platform called “Cloud Profiler” that has brought “cloud experience into the hands of its partners and increased its impact among small and midsize businesses,” according to the company.
Another partner, Champion Solutions Group of Boca Raton, Fla., developed a migration tool to help customers move to Microsoft Office 365 called “MessageOps,” and created a subsidiary to oversee its deployment in the market. In April, Champion Solutions, which was founded in 1979 and has long served the IBM community, unveiled its “MessageOps Monitor” service to augment the native Office 365 dashboard that provides an insight into systems performance and stability. MessageOps Monitor helps users identify problems and isolate them for quick resolution.
In April, Chris Pyle, president and CEO of Champion Solutions Group, penned a blog for Microsoft’s Office 365 website in which he described how his company has been able to successfully migrate hundreds of customers to Office 365.
“In working with our customers, we focus on operational efficiencies, making sure the organizations that adopt the Office 365 platform really make the most of it. Just because you migrate to Office 365 doesn’t mean you’re done,” Pyle wrote. “That’s Day One. There’s still Day Two (how you set everything up) and Day Three (how you collaborate and leverage the power of Office 365). We help our customers with all three stages.”
In doing so, his company provides greater value, which leads to greater profits.
And so has SkyKick, a Seattle developer of an integrated application suite of products that help make it easy for partners to move their customers to the cloud. Recently, the company teamed with Microsoft to launch Turbo, a new migration program that leverages SkyKick’s Migration Suite to automate Office 365 rollouts — from initial sale to Outlook setup, according to the company.
“All you need to start is a customer’s email address and password, and the application will do the heavy lifting,” the company said. “To make your first project virtually risk-free, your first migration project’s on us. Then, the more you sell and migrate the more you profit — up to nearly $10,000 in value.”
With so much help for migrations and marketing momentum behind Office 365, partners who once knew the Microsoft stack up and down but have reduced support are giving the company another look.
This includes Derrick Wlodarz, the owner of FireLogic, a Park Ridge, Illinois-based technology consulting and service company. In October of last year, Wlodarz, a Google Apps Certified Trainer and Google Apps Certified Deployment Specialist, surprised his staff when he told them they would switch to Microsoft Office 365.
“After spending nearly four years on Google Apps, learning its every nook and crevice, I threw an audible at my staff and told them we were transitioning to Office 365 by Thanksgiving 2013. And that’s exactly what we did,” he wrote in a January 2014 blog about his experiences.
Why the switch? Value, he said, as measured by the size of the Microsoft ecosystem, the improved capabilities of its products, and the company’s commitment to its money-making platform.