Sure, cloud computing chatter dominated WPC11. Some channel partners have eagerly embraced Office 365 and Windows Azure. Others want Microsoft to adjust its cloud billing policies so that partners can wrap broader monthly services around Office 365.
Shift your attention to the world of Microsoft Lync and all that debate largely goes away. Lync is Microsoft's unified communications software platform -- blending voice, instant messaging, web conferencing and more. Yes, Lync is available in the Office 365 cloud. But I suspect the vast majority of Lync deployments will remain on premise for years to come. One prime reason: Microsoft has not introduced full PBX capabilities in the cloud, meaning that Lync's most complete capabilities remain on-premise.
Billion Dollar BusinessDuring WPC11, multiple Microsoft managers told me Lync is set to become Microsoft's next $1 billion platform (annual revenues). Imagine that: Lync, formerly Office Communications Server (OCS), will essentially generate more annual revenues than Red Hat, which has been one of the industry's fastest-growing software providers for more than a decade.
In many ways, Microsoft's Lync strategy emulates the SharePoint strategy: Build an application, then open it up to ISVs (independent software vendors). Microsoft later this year will extend Lync out to smartphones like Windows Phone 7, Apple iPhone, Google Android and more. And you can bet Microsoft will connect the dots between Lync and Skype, assuming Microsoft's buyout of Skype receives regulatory approval.
The SMB OpportunityMy main criticism of Lync so far: Microsoft hasn't done a great job positioning Lync for SMBs. During WPC11, Microsoft spoke about attacking 10 million legacy VoIP lines that Cisco controls. But that's an enterprise target for Microsoft and an enterprise opportunity for partners.
To succeed in the SMB space, Lync is going to need help from managed services providers. And I suspect plenty of MSPs are going to get on the bandwagon. During private conversations at WPC11, five MSPs -- all current or former MSPmentor 100 companies -- told me their next Microsoft certification will involve Lync.
I don't want to paint Lync as "all good." I haven't tested the software directly. I don't know how much margin partners can make when deploying Lync. And I don't know what type of recurring revenue models MSPs can build around Lync.
That's a lot of question marks. But I do know this: Assuming Lync maintains its current sales trajectories, it will become Microsoft's next $1 billion application business. That fact alone warrants your attention.