Multiple Tiers of Windows in the Cloud

There’s obviously a lot of interest and concern in the channel over Microsoft’s ultimate ambitions in the cloud. At the Microsoft Worldwide Partner Conference this week Microsoft devoted most of the agenda to how its partners will be able to make money as Microsoft moves to expand the available market by delivering IT products and services via the cloud.

But while most solution providers are getting more comfortable with that message, many of them are not so sure that Microsoft is the best route to the cloud. They generally agree that delivering Windows products and applications via the cloud makes sense. They are just not sure if they should do it themselves, rely on a third-party or partner with Microsoft.

The issue with partnering with Microsoft in the cloud is that many solution providers fear they will wind up reselling low-margin products and services that are not particularly well-differentiated from what every other Microsoft partner is selling. At the same time, however, many of them are concerned about the ongoing capital investments they need to make if they are going to build their own cloud.

For those reasons, Manlio Carrelli, chief marketing officer for Intermedia, a provider of cloud computing services based on Microsoft Exchange, says Intermedia is signing up as many as 200 new partners a month to resell its services. Carrelli says solution providers are attracted to Intermedia by the ability to customize the environment, support for non-Microsoft products such as Blackberry devices from Research in Motion, iPhone from Apple and a range of Google Android devices, rebrand the entire service and the fact that Intermedia doesn’t dictate how much to charge for the service.

Meanwhile, Intermedia, fresh off of being acquired by the venture capital firm Oak Hill Partners just turned around and acquired Zlago, a provider of hosted desktop Windows, which is a clear sign that Intermedia plans to extend its ambition for Windows products and technologies in the cloud as well. In fact, Intermedia claims that it distributes cloud services to 38,000 small and mid-size business customers either directly and through its 6,800 global channel partners. In all, the company claims to manage 320,000 Exchange mailboxes.

What Intermedia represents in the channel is an emergence of a two-tier Windows environment in the cloud that ultimately could make like a whole lot better for Microsoft partners, especially when you remember there is always strength in numbers when it comes time to deal with the folks in Redmond.

In the meantime, these are challenging and complicated times in the channel, so solution providers need to weigh their options carefully. But one thing that is for certain is that path to the cloud that allows solution providers to keep their options open is probably the one that ultimately strikes the right balance between profitability and the need to minimize capital investments.