Microsoft (MSFT) and Continuum are updating their respective cloud and managed services strategies at Autotask Community Live. The Microsoft session came off as a bit of an apology to partners;  the company stated it needs to be easier to work with in the cloud market. The olive branch: Microsoft is giving Autotask conference attendees a one-year Office 365 cloud subscription for free. Separately, Continuum is describing how MSPs can drive toward 50 percent operating profits. Read through this live blog for minute-by-minute updates.

Recap: Microsoft

  • Bryan Von Axelson (SMB Cloud Strategist), Bob Neal (SMB Cloud Sales) and Corey Nagel (SMB Cloud Marketing) are part of a newly created team -- the Cloud Channel team -- at Microsoft.
  • Microsoft is conceding challenges in the market -- not being able to work with and find the right Microsoft sources.
  • Only about 20 percent of MSPs in the room indicated that they have received Office 365 incentive rebates -- a figure that disappointed Microsoft. 
  • Von Axelson gave out his email address (BVA [at] Microsoft.com) to make sure attendees had an easy way to work more closely with the company.
  • "We're dedicated to driving our strategy through the channel," Microsoft executives insisted. 
  • The company is reiterating that it is "at the beginning of the journey" with Office 365 Open. Read between the lines and it sounds like Microsoft may expand the Open program, which is extremely limited but allows MSPs to manage end-customer cloud billing.
  • Yes, Windows 8.1 was mentioned in passing.
  • Overall, the Microsoft presentation sounded like a "we're sorry, we're listening, we're improving our partner program" pitch.
  • My spin: It's good for Microsoft to be humble. But the hints suggesting Office 365 Open itself may evolve shows the basic challenge: Even when Microsoft becomes more channel friendly, it isn't channel friendly enough -- at least not initially. Office 365 is two years old. There is progress. But Open should be fully open -- available as part of all Office 365 SKUs.
  • Microsoft closed by offering all Autotask attendees a free one-year subscription to Office 365.

Recap: Steve Ricketts, VP of Marketing, Continuum

  • Roughly 500 MSPs run Continuum (RMM and NOC) and Autotask in tandem.
  • Ricketts is telling MSPs how to scale without adding costs to their businesses.
  • The company now has 670 employees, and Continuum partners manage about 500,000 end-customer devices. 
  • "We've got a number of partners that are growing at 30, 60 and 90 percent."
  • One partner grew at 90 percent without adding staff -- leveraging an outsourced NOC and help desk to scale without adding headcount. The partner grew from 150 managed devices per tech and is now approaching 300 devices managed per tech.
  • MSP Financials Before and After: A lot of MSPs starting out have a 65% COGS (costs of goods sold); 10% SGA and 25% operating profits. He says the desired state is 40% COGS, 10% SG&A and 50% operating profit.
  • Big cost challenges for MSPs: Senior techs doing routine maintenance; techs who do research to resolve issues; low tech utilization; high cost of training; turnover; rising benefit costs, and more.
  • Fixing the cost challenges: The best MSPs are centralizing, streamlining operations and expanding their businesses within the existing customer base.
  • Where Continuum fits in the conversation: For centralizing, Ricketts mentioned the Continuum centralized management console for centralizing; negotiated pricing deals with LogMeIn and others for incremental sales. To streamline operations, Ricketts called on MSPs to outsource their NOC to Continuum for maintenance and troubleshooting. Plus, he said, leverage on-demand Continuum staff for projects like Exchange migrations and more. And he mentioned marketing services for MSPs. And to expand into new markets, he pointed to Continuum's opportunities to offer backup, mobile device management, and more. 

Check back for updates every five minutes or so. That's all for now.