Microsoft Mobile Cloud Adoption Gives Partners Pause

While momentum for Office 365 seems to be building, customers remain cautious about core business application migration and partners are still uncertain about the sustainability of cloud business models, according to a report from enterprise mobile collaboration firm harmon.ie.

An overwhelming majority (97 percent) of respondents expect clients’ use of Microsoft Office 365 to increase in the next 12 months, while more than half think it will grow from 30 percent to more than 50 percent.

According to surveyed partners, 72 percent of their customers use SharePoint on-premises or as a hybrid today.

Cloud bets

“Partners are still hedging their cloud bets because they are uncertain about future business models,” Yaacov Cohen, CEO of harmon.ie, told eWEEK. “While many Microsoft partners are excited about the opportunities associated with Office 365, they are diversifying by offering a multitude of services—with no single service expected to account for more than 26 percent of their revenue in 2015 or 2016.”

Partners see the hybrid architecture as an opportunity, with 47 percent of respondents calling out hybrid integration services as an area of potential revenue growth.

Cost saving is the primary driver for the move to the cloud, with nearly 68 percent of partners citing capital expenditure reduction as a major driver for businesses.

Just under two-thirds (62 percent) of partners cited security as an obstacle to customer adoption.

Top concerns ranged from privacy and security in multitenancy environments to control over IT infrastructure.

“As part of delivering on its ‘Cloud First, Mobile First strategy,’ Microsoft might leverage its ISVs’ ecosystem to alleviate security concerns,” Cohen explained. “We expect Microsoft to partner with security-centric ISVs such as Check Point, MobileIron and Good Technology to enable secured access to Microsoft Cloud offerings such as Office 365, Yammer and OneDrive.”

He noted that Microsoft took more of a build-it, stand-alone approach with the introduction last year of the Enterprise Mobility Suite (EMS) and the recent addition of threats analytics in EMS.

In addition, 74 percent of partners reported migration factors as a top concern for customers.

Wider adoption of business productivity in the mobile cloud comes with challenges, and most partners and businesses are not yet ready to move beyond individual productivity tools to more comprehensive, integrated cloud collaboration environments, as only 12 percent use Lync regularly, while a mere 3 percent use Yammer regularly.

When respondents were asked which functions companies intend to move to the cloud in the next 12 months, file sharing, email, calendaring and office applications topped the charts.

Partners are betting on consulting services (72 percent), hybrid integration (47 percent) and cloud management (41 percent) as the top three services with the biggest immediate revenue potential.

More than half (60 percent) are developing expertise in other business cloud providers for cloud applications outside of the Microsoft portfolio of mobile and cloud applications and services.

The most popular cloud applications being implemented by these partners include enterprise file sync and storage workloads, CRM, collaboration and customer service, while noted cloud partners include Dropbox, Box, Salesforce, SugarCRM, Citrix, WebEx and Zendesk.

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Originally published on eWeek.