Friend or foe? Microsoft partners wary of Office 365 migration plans

Last week, I advised third-party developers to be as aggressive as Microsoft in making the shift to the cloud via Windows Azure and Office 365. But a reader reminded me that it’s hard for some third parties — particularly solutions integrators and professional services providers — to do that. Why? Because Microsoft is muscling into their business, not creating a platform to which they can add as much value.

The specific issues revolve around residual percentages for customers migrating from Exchange to Office 365 and the available professional services work, including migration and continued support, for those migrated customers. Once an enterprise is on the cloud, the third parties’ opportunity to do work for that customer drops dramatically as Microsoft directly manages the platform.

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Also, the deal between Microsoft and the third-party solutions integrators and consultants keeps changing, to the third parties’ increasing disadvantage. It’s a state that reminds me of a scene in “The Empire Strikes Back”:

Calrissian: Lord Vader, what about Leia and the Wookiee?

Darth Vader: They must never again leave this city.

Lando (outraged): That was never a condition of our agreement, nor was giving Han [Solo] to this bounty hunter!

Darth Vader: Perhaps you think you’re being treated unfairly?

Lando (after a pause, in a nervous tone): No.

Darth Vader: Good. You know it would be unfortunate if I had to leave a garrison here.

Lando (to himself): This deal is getting worse all the time!

I very much appreciate the third-party providers’ frustration. Like most vendors, Microsoft calls such entities “partners,” which implies they’re in this together. That’s not the real relationship: Microsoft is aggressively trying to stay alive and relevant in the changing technology market, and if it has to sacrifice its “partners” to do that, so be it.

Solutions providers aren’t the only ones who may be sacrificed for Microsoft’s greater good. Ask the folks at Acer, Asus, Dell, Hewlett-Packard, and Lenovo how they felt when Microsoft announced the Surface tablet and became a direct competitor.

It’s true, as announced at its Worldwide Partners Conference, that Microsoft is tossing its hat further into the professional services arena, and migration to Office 365 is one area where it feels the need to come into its partners’ territory.

As of Sept. 1, Microsoft will offer through its FastTrack program free migration assistance to customers on deals of 150 or more Office 365 seats. Microsoft is hiring between 200 and 600 employees to aid the onboarding and migration process. Microsoft may perform the migration itself (if it can be handled from beginning to end from a call center using remote-access tools) or it may pull in a partner and pay it $15 per seat for the first 1,000 seats and $5 per seat after that, up to a $60,000 per customer migration.

In the past, moving to Office 365 was a bit problematic, but Microsoft has developed enhancements over time to the migration process, making it an easy target for Microsoft to use call center staff and remote tools to handle.

This new approach will likely take a bite out of partners’ migration-service income, but Microsoft has a couple of possible reasons Microsoft to do so:

• Some folks looking to move to Office 365 may be getting fleeced by professional-service teams with exorbitant migration fees.
• It often seems to take too long for some Office 365 migrations to actually happen, and getting directly involved gives Microsoft an opportunity to try to accelerate these migrations. Microsoft wants and needs as many companies as possible to use Office 365 sooner than later.

Microsoft is doing its best to pull any and all into its cloud. But third-party service providers have a silver lining, at least for now: Microsoft employees say Redmond’s goal is to get the easy, low-end migrations off partners’ plates, so they can focus on the more profitable, high-end services. (You can understand why some partners aren’t buying that line.)

Skepticism aside, the truth is Microsoft isn’t equipped to handle more than basic Office 365 migrations. It’s staffing up, for one, so its initial focus is purely on email, from Exchange 2003-2013, Lotus Domino 7, and IMAP-based email like Google’s Gmail. Microsoft will migrate emails, mailbox rules, contacts, tasks, and calendars. It will also ensure that certain basic services are configured properly on the client side, including firewall and DNS configuration — the typical on-premises network configuration necessary to get a customer up and running with Office 365.

But Microsoft will not migrate public folders, archive data, or emails larger than 25MB. Microsoft also will not migrate client-side data like PST files or local Outlook settings, nor will it offer postmigration support or training. With the importance of legacy archive systems for regulatory compliance, enterprises simply can’t take advantage of Microsoft’s free offering. Microsoft isn’t even touching hybrid support or SharePoint and Lync migration.

In other words, even where Microsoft is now competing with its partners, it’s leaving opportunities for those partners.

Still, I wouldn’t go so far as to say that Microsoft’s cookie-cutter migration option for customers will benefit partners in the long run. That’s because Microsoft keeps changing the rules. Microsoft may well start moving beyond those basic migrations to into the more complex scenarios that it’s now leaving to partners. That possibility simply hangs over partners’ heads, and will continue to do so.

Microsoft has to pull off a balancing act here, looking at what’s best for the partners it still needs, what’s best for customers it wants to adopt the cloud, and of course what’s best for its own long-term health.

Whatever happens in the longer run, for now the fact is that easy migrations are in better reach of smaller businesses through the FastTrack program. It’s equally a fact that there are still plenty of opportunities for partners to take advantage of in the lucrative enterprise space — for now.

This story, “Friend or foe? Microsoft partners wary of Office 365 migration plans,” was originally published at InfoWorld.com. Read more of J. Peter Bruzzese’s Enterprise Windows blog and follow the latest developments in Windows at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.