Microsoft Not InTune With SMB Cloud Needs?

Microsoft’s cloud-based Windows InTune gives IT administrators for small-to-midsized businesses (SMBs) an enterprise-style level of control over a network, via a combination of cloud services, on-site PC-management tools and added malware protection. Whether it involves checking that software licenses are up-to-date, or diagnosing unbootable PCs, the platform is supposed to be streamlined for those IT pros’ ease of use.

But is it the right price?

One analyst feels that InTune—one of Microsoft’s first forays into broad cloud services for businesses—might prove a little too dear for smaller companies’ bottom line. According to Microsoft’s official Windows InTune page, the platform costs $11 (£6.86) per PC per month. The minimum subscription term is one year.

Pricing clarification required

Yet based on a web survey he conducted for Microsoft to judge InTune’s uptake among its possible customer base, Endpoint Technologies Associates analyst Roger Kay concluded on his Forbes blog that, “uptake at $11 would be limited”. In addition, he said the company “is trying to bill for values, like encryption management, not yet clear to the target market”. (Kay disclosed in the posting that his firm consults for Microsoft.)

Microsoft is also bundling Windows 7 Enterprise upgrade rights with Intune; all the better to increase the business presence of Windows 7, on which the company still relies for a major portion of its revenue. Kay’s posting seems to focus on analysing InTune primarily as a channel for obtaining a Windows 7 licence, as opposed to a management service.

“At $11, the customer’s three-year cash outlay would be worth $396 (£246.85), far more than the list price, $75 (£46.75), for Windows 7 Professional,” he wrote. “Even discounting the value of the stream of $11 payments at generous 5 [percent] yields, a net present value of $182.02 (£113.46) over three years, [it’s] more than twice the purchase cost.”

Rather than pursue that model, Microsoft should “view an Intune sign-up as a customer acquisition … and seek to raise the average revenue per subscriber over time”. By trying to “grab all the benefit on the front end,” he concluded, the company apparently limits its market penetration.

Kay’s posting doesn’t mention his survey’s sample size, but he does detail some other concerns expressed by the survey’s respondents: “Microsoft still has to answer some pointed questions raised by respondents if it hopes for widespread adoption … For example, the fall-back plan during loss of connectivity, whether delivered through partners or directly, must assure potential subscribers.”

A need for more education

On top of that, a number of respondents allegedly claimed little knowledge about various aspects of Intune’s service, he wrote, “implying that Microsoft needs to [roll] up its sleeves with respect to educating the target market.” Such an undertaking “must be well-financed, thorough and confident”.

Microsoft has been pushing its message hard on the cloud as a whole, and its cloud-based services in particular.

“Windows Intune builds on our history of delivering cloud services at scale, including Hotmail and Windows Update, and leverages Microsoft’s cloud experience with Azure, Dynamics CRM Online and Office 365,” Gavriella Schuster, a general manager at Microsoft, wrote in a 28 February posting on The Windows Blog.

Over the past year, Microsoft has used its conferences and other events to push a particular vision of cloud IT services for corporations, placing it in direct competition with Google and Salesforce.com. Microsoft’s bets on the cloud are decidedly more long-term; despite the buzz surrounding services, such as Office 365 and InTune, the bulk of the company’s revenue continues to derive from traditional streams such as Windows and Office.