BPOS for the MSP

Microsoft® Business Productivity Online Suite
Business Optimization Guide for Managed Services Providers ©2010 Microsoft Corporation. All rights reserved.

This guide is primarily for partners that:
… Resell hardware and software solutions
… Provide services to organizations with fewer than 500 seats
… Provide services to organizations with more than 500 seats
; Provide managed IT services

If the characteristics checked above do not align with your
type of business, please visit the following Web site to find
the appropriate Business Optimization Guide for your
business: https://partner.microsoft.com/US/BPOSguides.

Business Productivity Online Suite (BPOS)
• Exchange Online, including Exchange Hosted Services,
which are attached services that encompass the
archiving, encryption, continuity, and filtering of data.
• SharePoint® Online for intranets and document sharing.
• Office Communications Online for real-time
communication and presence (instant messaging
and related capabilities).
• Office Live Meeting for interactive Web
conferencing.

The information contained in this document represents the current view of Microsoft
Corporation on the issues discussed as of the date of publication. Because Microsoft must
respond to changing market conditions, it should not be interpreted to be a commitment
on the part of Microsoft, and Microsoft cannot guarantee the accuracy of any information
presented after the date of publication.

This guide is for informational purposes only. MICROSOFT MAKES NO WARRANTIES,
EXPRESS, IMPLIED, OR STATUTORY, AS TO THE INFORMATION IN THIS DOCUMENT.
1 

Microsoft® Business Productivity Online Suite Quick Topics
Purpose and Use of This Guide
Business Optimization Guide for Managed Services Providers

Quick Topics Purpose and Use of This Guide

 What is Microsoft BPOS? This Business Optimization Guide is for partners that
provide managed IT support services—in other words,
 What are the benefits of BPOS for customers? MSPs. The purpose of this guide is to help MSPs:
• Take advantage of the substantial business
 What are the benefits of BPOS for Managed
opportunities to integrate a BPOS solution into
Services Providers (MSPs)?
their existing managed-services portfolio.
Cloud Computing: An Evolving Market with New MSP Opportunities

 What is the first thing MSPs need to do to • Understand how to introduce BPOS into a
start integrating BPOS into their business? managed-services business and begin generating
new revenue streams.
Quick Topics and Purpose and Use of This Guide

 What changes to MSPs’ businesses may be • Leverage best practices on how to market BPOS
needed to integrate BPOS into their offerings? most effectively and drive additional business
Integrating BPOS into a Managed-services Portfolio

opportunities.
In Conclusion: The BPOS Opportunity for Partners

 How will MSPs make money integrating
BPOS into their managed services business? This guide can be used interactively. It can be read from
beginning to end by clicking the arrows next to each
 What are the practices and characteristics of
page number, or it can be browsed non-sequentially by
the most successful BPOS MSPs?
Understanding the BPOS Solution

clicking on the section tabs to the left.
 What frequently asked questions (FAQs) do
Frequently Asked Questions

MSPs have related to BPOS?
Next Steps for Partners

 What should MSPs do to get started
integrating BPOS into their managed services
portfolios (i.e., next steps)?


©2010 Microsoft Corporation. All rights reserved.  2 

Microsoft® Business Productivity Online Suite Cloud Computing: An Evolving
Market with New MSP Opportunities

Cloud Computing: An Evolving Market with New MSP Opportunities

 Introduction
 Cloud Computing: An Evolving Market with New MSP Opportunities

 Cloud Services and the Growing Managed-services Opportunity

 The Evolving Software Model

 The Microsoft Solution: Software plus Services (S+S)

 Summary: Why S+S?

 Why Customers Want Online Services


 Online Services Market Opportunity

 The Synergies between Online Services and Managed Services




Cloud Computing: An Evolving

By now, most customers and MSPs are keenly aware

of the industry buzz around concepts like “cloud
computing” and software as a service (SaaS). In fact,
many MSPs were on the cutting edge of these trends
by being some of the first to deliver off-premises,
managed services to their customers.

Similar to the substantial growth in the MSP market,
the opportunities being created by cloud computing
and SaaS are expected to be considerable. The two

main reasons why customer interest is growing

rapidly in cloud computing are the same reasons why
managed services have flourished in recent years:
first, the ability for customers to lower upfront and
ongoing costs, and second, the opportunity to

streamline deployment and management.



Cloud Services and the Growing models. Recently, Microsoft sponsored a study
Managed-services Opportunity conducted by Everything Channel’s IPED focused on
To many, cloud services are seen as an evolution of cloud-services adoption among partners and customers
the managed services that MSPs have traditionally (hereafter referred to as the “cloud-services study”)

offered; services like remote to understand attitudes
management and off-site and perceptions among
The Cloud: a Common Definition
data storage. MSPs are very partners and customers
The term “cloud” is typically used when referring
familiar with the distinctions toward online services.
between services delivered to the delivery of services from outside the The study indicates that
on site versus services corporate firewall or beyond the walls of a cloud services will double
delivered off site. MSPs person’s home—in other words “off premises.” as a percentage of overall
are also familiar with the In its simplest form, the cloud refers to services partner revenues in the
business model associated next two years, growing
that are delivered from a datacenter in one

with cloud services: that is, from 8.5 percent to 18.1

location to a server or personal computer (PC)
providing services through percent of total partner
subscription-based licensing in another location via the Internet, or the revenue by the year 2010.*
models rather than through “public cloud.” (More recently, the term “private This suggests that many
one-time product sales. cloud” has been introduced to describe environ- partners are potentially

ments that emulate cloud computing on private going to be offering cloud
Recognizing the value of a services to grow their
networks, or “on premises.”)

subscription-based model businesses. For MSPs, who
and the potential for already have expertise in

annuity revenue streams, other types of partners are providing remote, subscription-based services, cloud
exploring cloud-computing opportunities and finding services present an excellent opportunity to grow
ways to integrate cloud computing into their business revenues by expanding into familiar territory.



The Evolving Software Model While this model served customers, technology
Customer needs and challenges drive innovation and manufacturers, and partners fairly well, the rate of
growth in technology markets around the world. For change and the degree of complexity for technology
much of the past 20 years, the predominant business products within global markets has made it increasingly

model for software has been the following: difficult for customers (and partners) to acquire,
1. The customer licenses a software application. provision, and manage their technology investments.
2. The customer installs the application within its Meanwhile, within small- and medium-sized businesses
environment. (SMBs), needed technology solutions are often out of
3. The customer replaces the application when a reach due to high costs and limited information-
change is needed. technology (IT) resources to implement the technology.

These challenges have driven a fundamental shift in
software licensing and deployment models. The result:

the growth in and excitement around cloud computing.



License Install Upgrade or Replace



The Microsoft Solution:
Software plus Services (S+S)
Until recently, the typical model for the cloud and
SaaS has been “all or nothing.” Either customers

purchase an entire application offering as a hosted
service, or they deploy applications on premises in a
traditional manner. However, many Microsoft partners
and customers have made significant investments in
on-premises solutions—solutions that meet many of
their needs.

Rather than forcing customers and partners to
choose between on-premises solutions and the cloud,

Microsoft is pioneering the S+S model, combining the

value of both. With this approach, customers are not
required to abandon their on-premises deployments
and shift entirely to cloud services, but can instead
blend on-premises solutions with hosted services to

take advantage of the benefits of each model.



Microsoft offers three models for delivering solutions, providing a new level of choice and flexibility. These include
on-premises, partner-hosted, and Microsoft-hosted solutions. Microsoft-hosted solutions are referred to as
Microsoft Online Services.
• On Premises. Software is installed at the customer location and licensed to the customer in a traditional manner.

• Partner Hosted. The infrastructure and software is owned and licensed by a partner, which purchases
Microsoft software licenses through a Service Provider Licensing Agreement (SPLA).
• Microsoft Hosted. Microsoft owns the infrastructure and provisioning of the software, which is delivered as a
service to customers via the Internet.

The goal for S+S is to enable customers to easily adopt and integrate services based on all three models (or any combination).
This approach is similar to the model that MSPs have embraced for years by providing clients with remote, managed services
to augment their on-premises environments.


On Premises Partner Hosted Microsoft Hosted
Windows® 7 operating system Line-of-business application services Microsoft BPOS (Hosted Exchange,
Windows Server® 2008 R2 operating system SharePoint, Live Meeting, and Office

Microsoft Office Communications)

S+S Solutions



Summary: Why S+S? With a customer base that understands the benefits of
• The power of choice for customers and partners. online services and is anxious to begin taking advantage
• Consistent, seamless customer experiences across of those benefits, MSPs are in a great position to
multiple computers and devices. make the most of these trends.

• The enablement of multiple business models.

Why Customers Want Online Services
The cloud-services study revealed that the majority of
customers recognize and appreciate the benefits of
online services,* such as the benefits highlighted in the
image below:




Lower Technology Costs Reduced IT Staffing Costs Greater Scalability Enhanced Ability to Focus
and Agility on IT Services That Provide a
Competitive Advantage
Customer Benefits



Online Services Market Opportunity This growth opportunity is expected to be significant
Services have already started to transform the world— for MSP partners. In fact, according to the cloud-services
from individual consumers to the largest enterprise study, MSPs serving the SMB segment are expected
organizations and government entities. Furthermore, to represent one of the largest channel opportunities

significant business opportunities exist for customers in the office-infrastructure, online-services category
and partners to utilize Microsoft solutions within an by 2012.* This is not surprising given the fact that
S+S model. Industry analysts agree that these changes many MSPs have already established many of the
will transform the IT industry and create many new trusted-advisor relationships that are crucial for acquiring
opportunities in the coming years. For example: and maintaining managed- and online-services
• IDC predicts a 24.3 percent compound annual customers.
growth rate for SaaS from 2008-2013, reaching just
over $33 billion in 2013.‡ MSPs are also recognizing the incremental business
• The Yankee Group expects that SaaS global sales opportunities that online services can offer. In the

will outpace those of traditional software by 2012.¥ cloud-services study, all of the MSP partners surveyed

that target customers with fewer than 500 seats and
have experienced early success with online services
said that they see it as a significant opportunity to
increase profit margins.*

Given the impressive growth projections, along with

the revenues already being generated by partners,
Microsoft is focused on delivering online-services

solutions for partners to take advantage of these new
opportunities.


BPOS for the MSP

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