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Windows Intune IDC report–A Blueprint for Success for Microsoft Partners–the ups and downs

I’ve found another document from the March timeframe from IDC (sponsored by Microsoft) about Windows Intune.  This one talks about how to be successful with Windows Intune.  It can be found here.

One area worth exploring in the document is the section entitled “Opportunity Areas for Existing PC Management Practices”. One partner is quoted as saying

"I think we could cover more customers than we could today. I don't think we have realized how big the potential is. It could help us win new deals and bigger deals."

It does not pull punches either and discusses some areas that partners have been talking to me about..

New Budget Line Item for the Customer

The largest change is that for the most part, other third-party, on-premise PC management tools are purchased by partners, and the partners must cover the expense of the tools with their PC management revenue. In contrast, with Windows Intune, the customer signs up for the service with Microsoft, and Microsoft bills the customer directly.

What this effectively means is that with Windows Intune, the customer must pay not only the PC management fees to the service provider but also a (new) fee to Microsoft. Microsoft partners face the choice of continuing to charge their standard PC management service price, which results in an effective increase in overall fees the customer must pay, or reducing the price they charge to their customers, which reduces their overall profitability per engagement but keeps the customer whole. Another potential downside to the solution provider is a reduction in customers' stickiness; customers using Windows Intune as their PC management tool could easily pick up their service and move it to another Windows Intune–capable solution provider.

Benefits to the Partner

While the challenges to the solution provider business model were viewed as the largest downsides of the Windows Intune model, solution providers interviewed also saw some benefits. One is the lack of hassle involved with billing the customer for the service. Another is that they don't have to pay up front for the rights to use the tool (i.e., the service provider does not have to bear inventory costs).

Another benefit to many partners is that with consistent pricing set by Microsoft, partners cannot undercut each other on the price of the product, which a few partners mentioned as a point of contention. Bender of Data One said, "It's important to protect from customers moving from one partner to another just because they charge 2% less." Further, this model provides a new revenue stream to the solution provider: It receives an on-going "partner of record" fee from Microsoft if it is the partner who helps sell the deal.

In fairness to Microsoft, these changes reflect changes inherent in the cloud service delivery model and not only in business model decisions made by Microsoft. Further, it is a fairly common model in the cloud service industry.


I hope this is useful to you.




Posted Wed, Nov 23 2011 8:14 AM by David Overton

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