back to article Microsoft tells resellers to use Office 365 as loss leader

Thomas Hansen, worldwide veep of Microsoft's small and medium business organisation, has urged resellers to adopt a “flexible” attitude to profit when selling Office 365 at a conference in China - as those who sign up for the cloudy suite become easier to up-sell to other Microsoft offerings. Speaking at the Canalys Channels …

  1. terry 1

    I suppose it makes sense for some, but I can't get my head around why people want to put their customers on 365 and then never see any future renewal profit.

    I look after one company that has 50 or so mailboxes spread over 8 locations. I considered a hosted exchange as £6 / month / mailbox doesn't seem much, but scale that up to 50 or £300 a month and suddenly the costs become significant. In less than 18 months it becomes cheaper to buy a basic server, exchange and cals and self host.

    1. Anonymous Coward
      Anonymous Coward

      If you can host your own server, bin Exchange and use a proper mail server. Just be aware that Outlook doesn't really like IMAP. Another reason to never select it in the first place!

      1. terry 1

        They are on imap with 1and1 and is the reason im trying to get them off. I'm used to exchange, but if you want to suggest an alternative I will look. I have tried other mail servers, eg, hmailserver but it simply doesn't work well enough over wan

        1. Anonymous Coward
          Anonymous Coward

          hmail is fine for departmental/dev/testing. Something like Postfix with Courier and some SpamAssassin action would be a good bet. RoundCube (or whatever you choose) for web mail.

          The problem with Outlook AIUI on IMAP (rather than the proprietary IMAPE) is that Outlook is shit. It will constantly do scans of the entire inbox.

      2. John Sanders


        SOGO can speak native Outlook MAPI protocols via OpenChange.

        Or use Thunderbird, recent versions work pretty well.

    2. Anonymous Coward
      Anonymous Coward

      "scale that up to 50 or £300 a month and suddenly the costs become significant. In less than 18 months it becomes cheaper to buy a basic server, exchange and cals and self host."

      Not if you allow for software assurance, maintenance, support, backups, resilient servers and storage, etc, etc. Cloud is far cheaper for the vast majority of use cases.

  2. Anonymous Coward
    Anonymous Coward


    "Sell your customer Office 365 for less than cost. Offer them services and extensions based on that. When the customer complains, they can now never leave as they are locked-in to open standards hating Office 365 and your closed source extensions!

    You can now ramp prices as you see fit and there's nothing the customer can do about it.


    Anyone moving to Office 365 is an idiot and deserves everything they get. Just a shame that so many jobs will be lost...

    1. durbans

      Re: Lock-in

      You clearly know very little about the systems you speak of. Almost all consumer services which Office 365 provides work over open standards from a end user point of view and can be used on any device. They also comply to the vast majority of security/compliance standards required in business and have apps which connect to their services available on all 3 major mobile OS platforms. And if you happen to be running something which they don't support, you can just use the web apps available which run over HTML5 with no plugins/extensions required.

      Mind you, the above paragraph is probably pointless because you won't touch it if it's not open source. I'll bet your open source software isn't pen tested on a daily basis though.

      1. Anonymous Coward
        Anonymous Coward

        Re: Lock-in

        "Almost all consumer services which Office 365 provides work over open standards"

        Did I say they didn't? The fact it's delivered via HTML over HTTP(S) is neither here nor there.

        I said Office 365 didn't *SUPPORT* open standards and by that I was referring to ODF (MS's implementation is deliberately poisoned).

        Or maybe you are thinking of the so-called OOXML 'standard' which still relies of proprietary guff, has never been fully documented and not even fully support by MS itself!

        "'ll bet your open source software isn't pen tested on a daily basis though."

        Yeah...because relying on closed-source products that keep me locked to a single vendor and their formats is soooooooo much more secure. *eye-roll*

        1. Anonymous Coward
          Anonymous Coward

          Re: Lock-in

          ODF? Some people have no concept of what Office 365 is. Forget the office client, the client isn't Office 365.

          1. Anonymous Coward
            Anonymous Coward

            Re: Lock-in

            I know exactly what Office 365 is. At some point you will need a local copy - then you are screwed,

        2. Anonymous Coward
          Anonymous Coward

          Re: Lock-in

          I would be interested in your view as an alternative to Microsoft for Enterprise quality connected office, email and unified communication technology - one which my clients wouldn't immediately question in regards to security, availability or longevity?

          In my experience, whilst many people really rather hate Microsoft, it tends to be the best all round Business solution, and 365 is in my eyes a very exciting proposition. I've spent significant time trying to find a reason to accommodate/migrate to Google Apps for Business, but try as a might I find the solution lacking in quality and usability (and I WANT to do something different).

          I do not understand what you mean about being locked in. For small/medium enterprises you pay for 365 on a monthly basis, at worst annually. If you want to switch away, there are a multitude of tools available to do so, particularly if you migrate to someone like Google.

      2. John Sanders

        Re: Lock-in

        You clearly do not know how to distinguish the different between transport and protocol.

  3. Charles Smith

    Does that mean...?

    We set the price too high.

    1. Trevor_Pott Gold badge

      Re: Does that mean...?

      It means "we set the price too high, but we want our beloved partners to eat the cost on this. After we take over all their customer relationships and strip them of any possibility for future profitability, of course."

      So let me add in a great big fuck you to Microsoft. Their true colours are finally revealed; they view their partners with just as much contempt as their end customers and their own staff.

  4. Alan Denman

    loss leader ?

    Sounds more like MS simply want sellers to work for nothing.

    1. Flocke Kroes Silver badge

      Re: loss leader ?

      I thought they were asking resellers to work for less than nothing.

  5. DNTP

    Loss Leader

    Remember kids, when a drug dealer does it, that's socially reprehensible behavior, but when a company tries to get YOUR company hooked into their cloud for life, thats good business!

  6. ben_myers

    A large steaming pile of horse manure from Microsoft

    Why on earth would I ever sell Office 365 at break-even, let alone at a loss? Man needs to put food on table, and shoes on children.

  7. TheVoiceofReason

    Silver Bullet for Killing Office 365

    There is a silver bullet for killing any businesses interest in Office 365. Microsoft actually provide the silver bullet themselves. I keep a print out of the damning words from Microsoft and present them to any customer that gets sucked in by the marketing. It instantly kills the interest. A good relationship with your customer, combined with Microsoft hoisting themselves on their own petard will certainly protect your customer from the Microsoft's dodgy marketing machine.

    To the Ratner Veep at Microsoft - Partners aren't always concerned about P&Ls, we are interested in delivering the best solution for our customers. Office 365 is unsupportable with its current model. The TCO is disastrous for the customer and for the MSP. We aren't recommending your product because of the lack of margin - there's no margin on any Microsoft products! Office 365 is not being sold because it is not good for customers and it is not good for MSPs. Give us a product that works, give us a support system that works and we'll sell it just as we sell on-premise solutions. We do actually sell Cloud-based Exchange but not Office 365 Exchange. Why - simple - the solution is well supported, it is triple DC-hosted in the UK, we have a great working relationship with the cloud vendor. All the things that Microsoft refuse to deliver to its partners.

    1. John Sanders

      Re: Silver Bullet for Killing Office 365


      This is not about what you want or need, this is about what MS wants and will impose.

  8. The Godfather


    Bit much to suggest resellers sell this at a loss in order to lock in and see a 'lifetime return'. What time period quantifies as a 'lifetime return' and can a Reseller absorb or even accommodate the up front loss and for how long?. These are Resellers we're talking about not some puffed up big vendor with loads of cash in bank...

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