Microsoft is Going Direct. Will Channel Partners Follow?

Microsoft’s Office Live offers smaller businesses an easy to use, low cost and feature rich online system for creating web sites, managing their businesses, managing projects and having email.
Overall, Office Live is Microsoft’s crown jewel to offer YOU an easy way to do business online – with no software to install and integrating seamlessly with your existing business applications.
The challenge for Microsoft: Will it’s army of resellers (channel partners) sell the service to their customers or direct them away from it to other hosted offerings?
Computer Reseller News writes Asked why a VAR or carrier targeting the SMB segment should go with an Office Live alternative, companies like SMBLive and InfoStreet are ready with an answer: They are more channel-friendly and feature rich than Microsoft’s nascent service.
“Office Live is at heart a direct play [and] not currently available for redistribution through the channel,” said Matt Howard, CEO of SMBLive, a Rockville, Md.-based e-mail and collaboration hosting specialist.

The existing model of Microsoft’s software development has been to create a core set of software – Office, Windows, Exchange and other core technologies including Share Point.
Microsoft developers then create and sell software built on top of these platforms.
With Office Live, although Microsoft does have a channel play, some partners feel Office Live is a direct play to small businesses – with no room for channel partners.
CRN writes Marja Koopmans, Microsoft’s director of partner development for Office Live, said this service offering is just another choice for partners.
“They can work directly with Windows SharePoint Services or choose to go with Office Live, which kick-starts a lot of the work they might otherwise have to do themselves,” Koopmans said. “Atop all that, we’ll also give [Office Live] partners access to our current customer base.”

I would highly suggest you read my interview with Baris Cetinok, director of project management and marketing for Office Live and listen to the audio portion as well.