This week at the Microsoft Worldwide Partner Conference 2010, Microsoft Corp. was highlighting market opportunities for hosting and communications service providers as adoption of cloud services among small and midsize business (SMBs) continues to rise. Microsoft is offering to help service providers take advantage of those opportunities through its software, services and programs that enable them to become trusted advisors and full-service IT providers to businesses.
That all sounds grand but Microsoft may really be onto something here. They have been putting a lot of resources into their Cloud Services offerings and CSPs have been looking for ways to attract and keep customers, especially SMBs, enterprise and corporates. For service providers, reducing customer churn is critical to revenue growth, profitability and market share. During the past several years, Microsoft says it has heard from its service provider partners that they were experiencing significantly lower churn rates among business customers using Microsoft Hosted Exchange, Microsoft Office Live Meeting and SharePoint when compared with those using basic POP or webmail services. If CSPs can give the customers a ‘sticky’ core offering they are likely to extend the range of services being purchased.
Microsoft has also done its homework in this area. According to its global SMB IT & Hosted IT Index 2010, a survey of nearly 3,200 SMBs across 14 countries, awareness of hosted services is increasing with 65 percent of SMBs using hosted software to some extent, while 73 percent of the remainder have considered it, compared with only 44 percent in the 2008 index. Of those respondents currently using hosted services, the business advantage attracted them most.
As the second most-used IT service among SMBs, backup tools represent another opportunity for service providers as SMBs continue moving toward the cloud. Microsoft is partnering with unified storage architecture provider, NetApp, helping service providers expand their business by developing differentiated services to meet these customer needs. This gives hosting service providers the ability to offer enterprise-class data protection solutions for disaster recovery, clustered failover, and backup and recovery services to their SMB customers.
Microsoft has taken a few knocks of late, especially with Apple taking the limelight in the mobile device stakes and net worth, but it would be rash to write them off just yet. If Cloud Computing achieves a only small part of the market success the experts are predicting then Microsoft wil be in a great position to capitalize. Having CSPs onside, may well be the linchpin Microsoft has been seeking to get it back on top.