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Tuesday, March 13, 2012

Web Host Intermedia Offering Office 365 to Customers, Resellers - Web Host Industry Review

A pricing chart from the Microsoft website, illustrating Office 365 rates A pricing chart from the Microsoft website, illustrating Office 365 rates

(WEB HOST INDUSTRY REVIEW) — Hosted services provider and Microsoft specialist Intermedia announced on Monday that it is now offering Microsoft’s Office 365 service to both its customers and resellers, alongside its Office in the Cloud product set.

Intermedia offers web hosting and other services alongside being the largest provider of Microsoft Exchange hosting, a product it delivers through a significant network of reseller partners. While Office 365 will be available to the company’s commission-based “Advisor” resellers, it is not currently offered to the company’s private-label partners.

Launched during 2011, Microsoft’s Office 365 is a base-level hosted version of the company’s office tools – including Office web apps, along with Exchange, SharePoing and Lync – hosted by Microsoft, and billed by Microsoft.

The 365 model does allow for resellers to distribute the Microsoft-hosted services, but that relationship looks more like a referral partnership, with the reseller receiving a commission for directing customers to Microsoft.

Some Microsoft resellers have been critical of the product since before its launch, claiming that the movie is indicative of Microsoft’s desire to deal directly with end-users on software subscriptions and, more significantly, that the reseller loses control of a customer moving to Office 365. Microsoft says Office 365 is an entry-level offering with little support or advanced features, and that the product is helping to create a huge new audience for hosted email and collaboration solutions, business Microsoft expects will go to its reseller partners.

Intermedia’s Office 365 offering would seem to support Microsoft, Office 365, and the contention that the product doesn’t represent a direct threat of Microsoft eating its reseller channel.

Intermedia, as a huge distributor of Exchange, may have a little more pull with Microsoft than the average reseller, but it’s not clear whether it has a different arrangement with Microsoft around the referrals and billing of the Office 365 services. Unsurprisingly, the company doesn’t offer many billing specifics through the release, though it does say the services will be provisioned and managed by customers through its HostPilot control panel, which “[spares] them from having to use multiple control panels or pay multiple bills.”

If there was Integration work to be done, that might explain why Intermedia is offering Office 365 eight months after the product’s launch.

From a quick conversation with Intermedia, I managed to glean that the demand from customers around Office 365 had more to do with an appetite for the Web apps than a desire for an entry-level version of Exchange, since Intermedia already offers an entry-level version of its Office in the Cloud. Intermedia has a feature chart comparing its Office in the Cloud with Office 365 and Google Apps.

About the questions around the billing relationship, we’re waiting for a follow-up, but rest assured we’ll update the story with whatever Information Intermedia is willing and able to share.

Intermedia is bringing some of its own special sauce to Office 365. Along with the control panel support, the company is offering migration services and 24-hour support, as well as the option to add on a range of other proprietary cloud services such as hosted PBX, mail encryption and conference bridges.

“With Intermedia’s Office in the Cloud suite of plans, and now Office 365, we offer businesses a number of choices so they have the cloud service solution best tailored to their needs,” says Michael Gold, president of Intermedia, quoted in the press release. “We’re excited to combine Microsoft’s Office 365 with Intermedia’s value-added, proprietary cloud services and support in order to help businesses realize the cost-effectiveness and power of cloud computing.”

Talk back: What do you think of Microsoft’s Office 365 strategy? Do you see the direct-sales model as a threat to your business? Do you agree that the company is creating a new market for hosted services? Do you (like Intermedia) see an opportunity to profit from offering Office 365 to your own customers? Let us know in the comments section.


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