Microsoft is in a position where it provides solutions, software, and hardware to companies. However, many of those partners often have their own software or hardware (Surface, Windows, Office 365), and Microsoft must walk a thin line between being commercially successful with its own products and not stepping on those of its partners.
Speaking specifically about Office 365, Pepper says Microsoft is adept at “plugging the gaps”. He means the company can bring functionality and services without stepping on what is offered by partners and OEMs.
He says Redmond has “really stepped up [its] game over the past five years.” However, he is quick to warn Microsoft that developing so many features could ultimately hurt smaller partners who have built themselves filling gaps in Office 365 and other services.
It is part of the conundrum Microsoft faces. On the one hand, it must drive its products and improve them. On the other, there are partner companies who thrive on plugging the feature gaps. Microsoft needs to balance co-existing with partners and ultimately attempting to better them with its own services.
Co-existing and Competing
Of course, this is not a new concept. Since the beginning, Windows has been run on partner machines and Microsoft has updated it to fill in those feature gaps. However, Pepper says the landscape has changed and so has Microsoft:
“But Microsoft has really put [a] flashlight on that now. They're doing lots of things, and traditionally you'd follow that up with: yes, but they're doing them badly. But that's not the case any more. They're doing lots of things and they're doing them very well.
It's all about supporting applications. They're playing in the datacentre business, so the likes of UKFast, SkyScape, and other independents are thinking ‘how do we compete with Microsoft at a hosting level?' There's a threat there. If you look at the applications they host within that, Office 365 has completely changed everyone's world.”
Microsoft has improved its products so much that smaller and even bigger companies should be worried: “If technology businesses aren't looking at Microsoft and the Office 365 platform as the biggest threat, they're kidding themselves,” Pepper adds.