Comcast Wants Your Microsoft Customers!

November 27, 2007 – 1:01 pm

It’s no secret that companies like Time Warner Business Class Cable, Comcast and Cox communications (to name a few of the big ones) want to sell bandwidth and add-on services to your customers but now the game is changing as they move into competition with you.  You knew it would, and in fact you weren’t even supervised when Best-Buy became a competitor of sorts, but did you forget that the cable companies have two things that when combined give them a distinct advantage? 

  1. They too have the customer relationship.
  2. They have the money to offer SaaS direct!

I think I was surprised by those obvious two facts when I blogged about the Comcast offering of hosted Microsoft services last week.  The first one I’m not threatened by, the second one I am.  You see, I’ve been aggressively adding SaaS products to our portfolio and moving customers over to those services.  I don’t own but one of those services (Remote Monitoring and Management Software- but am working to outsource that one as well).  What is interesting about this move by Comcast is that they apparently are NOT using Microsoft’s LIVE service for this but according to a comment by Microsoft on my recent blog they have “taken advantage of the Service Provider Licensing Agreement and deployed the Solution for Hosted Messaging and Collaboration from Microsoft“. 

Currently there are many SaaS providers out there you and I can resell as they don’t have the access to our customers like we do, but when the local phone and cable companies (whom my customers have some level of trust with) display the ability to compete against me in the area of MS licensing, well that gets my attention.  Especially since they can do it without the middle- man costs (formerly my 30-150% margin).  Comcast is in fact using the MS services as a loss leader. 

So is it the end of the world for you an I?  Definitely not,  but the folks that I think might have more cause for concern are the SaaS providers that rely on us to resell their products.  They don’t have bandwidth, VoIP, HBO and Showtime as their cash cows.  My company makes money primarily off of services including integration, management and consulting whereas the SaaS providers I resell make their money off of the very services Comcast is now giving away in with 2 year ISP contract.   Hmmm… Now what Vlad?

Tomorrow I will be blogging about why this is the wrong thing for the customer as well as Microsoft.  Stay tuned.

  1. 2 Responses to “Comcast Wants Your Microsoft Customers!”

  2. I said it before, will say it again:

    Big companies like doing business with big companies.

    Even though Comcast may not directly be competing with you, they will not do business with you. You are too unskilled, too fragile, too little committed. What they will do, or I should say, what they have done at least in Florida is teamed up with your competitors.

    For example, Florida is Bell South country. When you get a DSL line, be it residential or commercial, you get a suite - Best Buy comes in and performs the services.

    In effect, Microsoft is leveraging the retail aspect that is totally committed with uniform reach.

    By Vlad Mazek on Nov 27, 2007

  3. Vlad said:

    Big companies like doing business with big companies.

    A corollary to this is that small businesses like doing business with small companies. As we all know, there are a bucketload of small businesses and some of these will like the Comcast “solution”, but there will be sufficient numbers that will avoid it like the plague.

    I think what will end up happening is that those small businesses that don’t get Managed Services nor see the value proposition offered by it will go the Comcast route. These are the customers that just about every piece of MSP how-to material tells us that we don’t want anyway. Somebody still needs to look after them though.

    The other small businesses will just sort the wheat from the chaff in the MSP space.

    So it will be business as usual for those MSPs that are actually offering the S in MSP, and we’ll see survival of the fittest (or those with the big advertising spends) take place.

    By Chris Knight on Nov 27, 2007

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