Today, we are witnessing a transformation in the way users view technology ––from being a– good to-have to a must-have; from being viewed as an expensive investment with doubtful returns to one that delivers high returns. This transformation, on the one hand, is driven by lower costs of computing and storage, therefore allowing increasing the number of customers to invest in a combination of devices. On the other hand, lowered costs of bandwidth have spawned a new world over the Internet. The result is the emergence of a new paradigm in technology access, delivery and usage – one that is not restricted by vendor, affordability, and that is not restricted to an ‘either/or’ situation: i.e. either offline or online. Instead, this new paradigm is driven by the most important factor of them all – customer need.

After some initial ‘experimentation’, customers will choose a combination of offline and online capabilities / product, and will mix and match those components that best serve their needs.’At Microsoft, we believe customers want to control their own computing experience, and so our strategy is designed to deliver a new generation of seamless, service-centric experiences – experiences that are focussed on the customer — personalized, integrated, and available nearly anywhere, regardless of connectivity or device. We call this software + services. 

So, in this dynamic scenario, what are the lessons for the partner ecosystem? What are the new opportunities and how must the channel community prepare to make the best of the new world? There is no doubt that the channel community must keep pace with technology and concurrently adapt its own business model to match this new paradigm. For example, not only must partners be ready for higher capital investments in infrastructure, they must also become more cost- efficient infrastructure aggregators, and be willing to get deferred payments in the form of subscription. And, most vendors who are designing products for this S+S world will have a partner framework in place The goal of Microsoft’s software plus services strategy is to empower the customers and partners with richer applications, more choices and greater opportunity.
This is enabled through a combination of –
1. On-Premise Software – where the software is installed at the customer location and licensed to the partner. A partner may make money through traditional methods such as providing deployment and system integration services, application development, resale of software licences and training and support; 
2. Partner-hosted Software – where the infrastructure and software are owned and hosted by the partner, who purchases Microsoft software licences trough a service provider licensing agreement. In most cases, the hosting partner will add additional software or services and will bill the customers on a subscription model; and 
3. Microsoft-hosted Software – where Microsoft owns the infrastructure and provisioning of the software which is provided as a service to the customers.

The partner framework set by Microsoft capitalizes on the full range of opportunities that are enabled by the software and services strategy and partners are free to choose the best monetization method based on their delivery model. Some of the options available include: 
1) Advertising – by advertising syndication with transaction model that includes both pay-per-click and cost-per-impression or with marketing services to support advertising 
2) Refer – by acting as an agent or broker for Microsoft hosted services 
3) Resell - by reselling Microsoft software licences 
4) Host ––through services based fees for customizing solutions to meet the needs of the customers 
5) Design and Develop – partners can develop solutions for specific customer segments 
6) Support and Training ––providing pre-sale and post-sale training and support to the customers to make money 
7) Consulting ––providing marketing related consulting services provided to the customers

Overall, from a customer point of view, the partner community will be expected to replicate the same seamless, service-centric engagement and purchase experiences – that technology itself will deliver to the user, i.e. personalized, integrated, and available nearly anywhere, regardless of connectivity or device. And, this will be the biggest challenge. So, they must evolve from mere hardware centric entities to a customized solutions and support providers – and step into the shoes of a trusted adviser. 

Not only does the S+S world offer greater power of choice to customers, it does so for the partner community too. Furthermore, as partners will be compelled to increase the level of engagement with the customers, which in turn will drive increased customer loyalty. In turn, this will offer an increased window into new cross-selling opportunities. For example, partners will be able to work together with clients to try pilot deployments over the hosted model, before a full- scale deployment ––in turn driving a faster time to market.

This is a new beginning that will become a milestone in the evolution of the channel community in the coming years. Partners have always formed a crucial part of Microsoft’s business model and it will continue to be so under the S+S strategy. With growth, the role of the partners and their contribution in handling customer interface will only spread. Microsoft aims to provide the best platform to all its partners to keep the network growing consistently strength by strength.