Microsoft is cracking the whip on partners that sell Office 365 subscriptions but are not doing enough to ensure customers are actually using the product, according to channel onlookers.
Office 365 is one of the software giant's flagship products, and its sales have rocketed in recent years. In its Q2, Microsoft's commercial cloud revenue grew 114 per cent year on year driven in part by Office 365.
But some channel bosses claim customers are being sold the licences without adequate support for deploying and consuming the associated services, prompting Microsoft to clamp down.
Cloudamour founder Mitchell Feldman told CRN:
"Microsoft is pushing heavily on the consumption of Office 365. They are no longer interested in people just having an Office 365 subscription; they want people to consume the services. Licensing solutions providers (LSPs) are being told that selling licences isn't good enough – they have now got to make sure the people [customers] are not just buying it for licence fulfilment but that they are actually using the services in Office 365.
"[In the past] they might have bought the licence but not activated any of [the features] and just bought it for software-asset management (SAM) purposes."
SAM specialist and LSP Crayon's UK boss Gareth Johnson agreed that many customers were left in the same situation.
"What Microsoft has done over the last few years is offer Office 365 to on-premise organisations on a low-cost migration path but unfortunately [left] those without any real deployment capabilities," he said. "A lot of LSPs were incentivised to drive Enterprise Agreements – and there were bounties aligned to all cloud offerings – ... but there are a lot of customers out there with Office 365 but who are not deploying."
Johnson added that although Microsoft's sales figures for Office 365 are great now, the foundation for the product's long-term success lies in how many people actually use it after they have coughed up for the licence.
"Customers out there [who have] Office 365 and are not using it are a huge threat potential – the competition could come in and rip it out," he said.
"There is the potential that customers won't see the value of it. Microsoft has always rewarded sales... but now it really needs to reward people who are demonstrating how to use the technology and how to better equip [customer] organisations to keep them satisfied with the product."
Feldman said that is exactly what Microsoft is now doing.
"Microsoft are now going to start measuring the consumption – how many have logged into Yammer, for example – if they have an estate of 300 people licensed for Yammer, how many are actually using it?" he said.
In a statement sent to CRN, Microsoft said:
"We are continuously focused on ensuring the most value possible for our customers' use of our cloud productivity offerings like Office 365.
"While the journey to the cloud starts with implementation, true value comes from a customer's clear understanding on why they are doing it in the first place, whether that's to increase efficiencies, enable employees to work smarter, or support flexible working.
"The creation and delivery of education and adoption programmes that get at the heart of the required cultural change helps customers derive most value from these powerful new tools.
"With cloud services growing 128 per cent year on year, Office 365 continues to be a key growth opportunity for our partners so these types of conversations with customers and partners are ongoing and will continue to be a focus for Microsoft moving forward."
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