Microsoft’s cloud push

Last month Microsoft’s Worldwide Partner Conference hammered home the point that the software giant is ‘all in’ on the cloud. While it’s certainly been the buzzword of the last few years, we ask Janet Gibbons, Microsoft UK director of partner strategy and programmes, to explain exactly what small resellers are supposed to be doing with it, and if anyone outside the industry knows what it is… 

Microsoft works closely with the UK’s network of retailers and resellers to sell its products – why not simply open more of your own stores?

There are 11 worldwide stores, but we will always be working through that big army of 30,000 resellers in the UK. We’ll always be working through that channel direct. The focus for us in that part of the channel this year is definitely online services. Office 365, CRM Online, for example. We think there’s a great opportunity for the lower end VAR resellers.

Which would be cloud type products. In the tech industry the term has been on people’s lips for a long time – but outside of it I’m still not sure it’s in the average person’s vocabulary. If this is Microsoft’s mission statement going forward, does there need to be more education and explanation going on?

In the UK we have a huge investment for next June, with multi-million dollar above-the-line advertising to drive the cloud services.

From a consumer perspective, the biggest cloud offering we have is Hotmail. And we’ve had it for years, its just people don’t necessarily connect it as the same thing.
The word ‘cloud’ is probably more geared towards businesses. The thing about cloud is it really does offer cost savings, and that’s the message we’re trying to get across.

But it is being pushed at consumers as well – I think your latest round of television ads included the tag line ‘to the cloud’. Do you think this sort of terminology means anything to the general public?

It’s interesting, because we are all using cloud services – we just don’t give it that title. Putting your photos or music somewhere online is fundamentally what it is.

These services have been around for a while, but I think that might be another area of confusion. It is being pushed as a new, revolutionary thing, not just by Microsoft but by the whole industry. Do you think companies need to be clearer about exactly what they mean by the cloud if they’re going to try and get those outside the tech industry on board?

The vendors have to differentiate what they mean by cloud services. So that’s the umbrella label, and we’ll have to come to market and say what it means for us.

For us, with the launch of Office 365, we feel we have a fantastic product that has years of legacy, which is used by millions of people, and now you don’t have to store it locally. It’s really about how you consume software – the software isn’t necessarily different. We think most businesses will see a hybrid being used, so some data and software will be kept on the premises, some will be on a private cloud, some will be in the public cloud.

So what would you say to the criticism that the cloud only makes sense if it’s all or nothing? If I’m keeping some files locally, why not just keep all of them locally?

It’s back to that point that businesses will make their own decisions about what they’re prepared to now store in the cloud, versus the business applications they feel they cannot trust there. Or for security they feel they don’t want some applications in the cloud. So you’ll definitely see that hybrid model for some time.

Since you mentioned security, we’ve had a spate of real high-profile hacking stories of late, which really have hit the mainstream consciousness square-on. Do you think this is going to damage the cloud getting off its feet? It could seem like the online space is becoming a more dangerous place to store data…

Microsoft has such a legacy of knowing how to manage this stuff, going back to the Xbox Live and Hotmail examples. And security has always been paramount for us. We feel that’s actually quite a differentiator and a strength for us.

For smaller dealers, the trend is going ever more towards repairs and service, rather than selling the hardware, which is often being left to the chains, supermarkets and etailers. Would you argue it’s still worth selling physical product if you’re a smaller retailer, or has the battle been lost now? Should these types of businesses stop trying to ‘push tin’?

The PC is still very much the heart of our business and that’s how you would consume your online services. The only tin if you like that’s impacted by cloud is servers. But we see a massive market in the private cloud as well as the public cloud.

But the point is retailers find it very hard to make any margin on hardware now. Do you see a time when this network of retailers you mention in the UK only pushes things like online services like yours, or just provides other services?

We all have to respond to customers change in needs, or you die. And Microsoft is no different to that – that’s why we’re bringing online services to market. We’re responding to customer need. I think the opportunity for those resellers is to revaluate where they think they’re going to make profit going forward. But if they were to sell online services, say from Microsoft, we see a massive opportunity.

It’s a different model, but once they’ve got their head around it, it’s actually very exciting.