Staffing, Foxconn & Henry Ford

IT Business, SMB, Work Ethic
2 Comments

(this is not a motivational post that will be featured at monster / careerbuilder)

We’re at the start of the biggest hiring spree we’ve ever had. OWN is launching upgrades to all the existing product lines next quarter and introducing brand new products and services online in Q2 and Q3. We’re shorthanded now and on the verge of becoming a sweatshop very quickly.

2-7-2011 2-57-12 AM

Over the past few years I’ve been very lucky to hire some really hard working, smart people.

Unfortunately for them, it’s their turn to hire their own “teams” now and build on the success that we’ve had together.

Sadly, the e-myth and standard hiring process for private enterprise reveals an ugly, disheartening truth:

You can’t hire a replacement for yourself.

This is so frustrating to people that have worked very hard to get to where they are. For every good employee there are typically at least 2-3 slackers that sail along somewhere above being fired for gross incompetence but below possibility of promotion or trust with anything more than a mid-range cell phone and netbook.

I see this frustration everywhere. The mythical “me” employee. Everyone wants to hire themselves. From the people that make $30K/year to people that run multimillion dollar companies – the person that you want just doesn’t exist. If they do, they are either too smart to work for you or have control & ego issues that prohibit them from reporting to a 20-something.

There is a safe way – hire, evaluate, keep or fire. This is the safe way because the investment is seemingly quite low – folks either pan out or don’t. This is the most expensive way to do it and if you’ve read emyth, it can be catastrophic even if it works. If it doesn’t work out, you’ve frustrated whoever manages them. If it does work out, and they quit, you’re starting from square one. The frustrating experience of building your own apprentice in the fast paced world of professional white collar business can not only affect your new hires, it adds an enormous amount of stress to everyone involved in that food chain.

I used to have a friend who bragged about how his team was able to run the company without him. Yet every time we hung out outside the business, he had to get on the phone and deal with fires. He’d go back to work, fire whoever was on top of the s#@%list that week and be back in the rebuilding mode. Yet nearly half a decade later, his business is smaller than when I first met him. Why?

There are two sides to the story. New hires will always feel like they are not receiving proper training, motivation, incentives, etc. I actually heard this last week: “Training? What training? We are still here due to the sheer will power of wanting to figure things out on our own.” Yet, when their boss got called out for being too lazy to record some training, a similar (yet opposite in direction) frustration came out.

In a perfect world, we would all be able to hire competent hard working people that require little training and are self motivated to move past the frustration of not being hooked into every process and every undocumented piece of information. Such a beast does not exist and I’ll try to sum up my 6 credits of management courses at UF in a paragraph:

Most employees are motivated by money and rank: keep in mind that majority of the workforce is not looking to be rich & stressed, they are looking for the comfort zone. At a certain salary level, the effort curve straightens out where they make enough money to spend more time away from work. The more money a person makes, the less incentive they have to work harder.

As I told a buddy of mine: The person that wants your job and can actually do it is too smart to work for you – they are working for themselves.

Now.

I am not an HR expert.

I’m pretty sure the following is illegal. I hope that the Foxconn people don’t read this and think: “That Vlad guy could help us ramp up our white iPhone production”. But I hope it helps you in some way. I’m really writing it up because I hope it helps my team in getting help.

Step 1: Document Your Job

We started doing this last year. Take any cheap webcam (Flip HD, $130) and point it at an employee that you think has a good grasp of their role. Start the role play. Here is what it looks like:

2-7-2011 3-30-25 AM

No lights, no production, no editing, no script, no worries. Just point, shoot, and roll. This becomes your training collateral.

Think it’s expensive to put a new employee through rough videos where they just sit there and watch stuff for the first week of their employment? The apprentice stuff is far more expensive – it takes your currently performing employee away from their job and the new hire (that may or may not turn out to be a serial killer) still just sits there and nods their head.

Warning: Your staff, particularly the more technical ones that think they are geniuses (which would be every single f’n one of them) will think that the new hires are complete morons that they need to teach the TCP stack to and gauge which parts of the training they understand and not understand by the dilution of their pupils or the number of hair twirls. See step #2.

The video process is important for several reasons. 1) You can pack a ton of information in an hour of video 2) When you talk openly you can easily sidetrack and come back to the main message to make sure you explain both the context and the details correctly 3) It’s all internal so you don’t have to get it past the lawyers 4) You can disagree and pass on tips and tricks for dealing with difficult stuff 5) You get to emphasize what is important to you.

Step 2: Make them earn it

The problem with the professional workforce is entitlement.

Most people looking for a professional job feel they are entitled to it and a high salary with benefits because they went to college. Most will expect a high level position as well, based on their (largely unrelated) work experience. This tends to die during the interview process as they clearly have no answer to the questions that come with the role.

For example, you may have Exchange experience.

But unless you worked in an environment with thousands of employees and an unlimited budget, you likely have no experience dealing with autoconfiguration, migration from 2007 to 2010 or the performance issues that should not be happening in the first place.

Monkey: So I see here that you have experience managing BES. How did you handle OTA?

Candidate: OTA?

Monkey: Activations, how did you activate devices that showed up in the field.

Candidate: Oh. Well. Employees (all two of them that had a Blackberry) had to connect their device to their desktop and…

Very few people have the exact experience you need.

So you need to document the training process and give people the tools. Even if they have worked in Exchange for the past 12 years, they will not know how to deal with the stuff you just figured out last week.

Qualify people that would understand the basics and make them want to learn how to do the advanced stuff. Here is what it looks like:

Congratulations, we love you. We’d like to make sure you can handle the more intricate parts of this role so here is an offer: Come over and do a few days in the life of this role. You’ll be paid for it. If you rock, the job is yours. If you don’t like it, no harm – no faul.

If they are between jobs they will jump on this.

If they aren’t – but are sincerely interested in the opportunity – they will still take a stab at it.

Why? Nobody wants to take on a new job working on @#%^ they hate with the people that they may not get along with. With this, all of the uneasiness of starting a new gig is removed.

Step 3: Jeff Foxworthy (aka “blah blah bull@#%”)

The problem with professional employees is that they can bull$#&* their way out of anything.

The smart ones know to keep their mouth shut. The dumb ones will keep on talking and remove all doubt 🙂 Sadly, most people know to keep their answers short, the details vague and defer being called out at any time with “I am not entirely certain, I don’t want to lie to you, let me find out and get back to you on that one.”

This is where most small business owners end up with a frustrating, ineffective workforce. Here is the cure, and it comes from Mr Jeff Foxworthy and “Are you smarter than a 5th grader.”

Step 1: Make them watch the video.

Step 2: Talk to them about the video.

Step 3: Call them on the details not explained in the video.

You should know in less than 72 hours whether you’ve got someone that is just professional enough not to be blatantly incompetent or if you’ve got someone that is capable of learning.

In nearly all roles, you want problem solvers.

You should know right away if the person you’ve hired is one or the other.

But.. without the video and training collateral, you can only call them on things that you’ve explained. No matter how well intentioned you are to perfectly train an apprentice, you will have better stuff to do. It’s so damn easy to give people your busy work that too much time will pass before you realize they are not a fit. As unprepared as new employees may be for your job, you’re far more unprepared to train them for their job. Very few people have psychic powers – new employees will not know how you like things done, how you communicate and what your expectations are.

So take the time and put in the effort to make it easier. Employees are the most frustrating part of business because they are your family – there will come a time where you will not want to fire them – but fire at them. As an entrepreneur and a business owner it’s frustrating to deal with the expectations and employees – but it’s much easier than doing their job. If you want to grow, you gotta grow up.

Brilliant Marketing

IT Business
2 Comments

By now you certainly know that iPhone 4 has arrived on Verizon’s network. Their marketing for it is simply brilliant.

Brilliant (adj) is a word British people use a lot. It basically means: “I wouldn’t imagine something so intelligent would come out of someone so f’n stupid.” You think you’re getting a compliment, but it’s really just an insult that doesn’t get you punched and proves the later part of the definition above. Which leads me to the Verizon’s iPhone commercial.

It’s brilliant! Check out the full commercial here: Verizon iPhone – I Can Hear You Now.

icanhearyounow

First, it ties in a message that Verizon poured billions and billions of dollars in establishing themselves as the network with the best signal / reception.

It uses the same guy.

But more importantly… and this is bewildering.. it uses the same iPhone default ringtone.

So every time I am walking around my house… and this f’n commercial comes on… I think my phone is ringing. As I look up and around and wait for the second ring (which is immediately followed by trying to figure out where I left my phone).. I see the Verizon guy on the TV.

And then I’m reminded how I can’t make a damn phone call out of my own house as if I live in a stone castle. ARGH!

Brilliant

This is by far.. by far.. the smartest way to launch the iPhone.

Tie in the old message.

Tie in the old marketing campaign using the same actor.

Use the familiar sound that reminds you of what’s being advertised.

Do it all in a seemingly innocent way that immediately tells you what just happened. Really, 30 seconds is way too much time for this commercial. It could be just the pic above followed by the ringtone:

“Riiiiiing: Verizon iPhone bitches. Come see me when your contract expires.”

There. 5 seconds. Verizon, I just saved you billions of dollars. Though I’m sure you already knew that. Seriously. Brilliant.

Dashboards

Beta, IT Business, Shockey Monkey
Comments Off on Dashboards

dashboardsKey to a successful IT business is communication. At times, marketing does a better job than technical support does in communicating technical events – mostly because marketing has a heads up and technical support is our version of FEMA.

At Own Web Now we offer phone support, online support through Shockey Monkey and we also offer a digital NOC blog. We do not and never will offer email notifications of outages – our primary service is email so sending an email to someone hosted on a server that is experiencing technical issue would border on ridicule.

What we have encountered in our experience is that at times we are just not fast enough at alerting our clients and partners when there are technical issues. The person with the knowledge of what is going on may be the one updating the NOC blog or we may be alerting about issues minutes after the issue has been identified and tickets have started pouring in. Crisis management is tough.

Shockey Monkey Dashboards

We have made a conscious decision that all our systems development going forward must be tied to Shockey Monkey. So even though we’re writing a system for us, we will build it inside Shockey Monkey and share it with all of you for free.

What’s the catch? Well, we hope you know better than us and are willing to share something we may be overlooking.

Click on the image above for a brief overview of what we want to build. Most of it is a lunchtime doodle but here is the summary.

Overall goal – Tied into Shockey Monkey. Provide an API for it from the getgo, allow the partners to customize it and tweak it because everyone has their take on the dashboard.

Issue reporting – Allow the user entering the issue to provide the time and date. The two should support fakery – after all if you’re reporting an issue that has been around for 30 minutes the users should be told when the problem started – ideally I’d like it to show the entire interval of an issue so that users reporting problems will know if it’s related. I would like to list a severity of the issue – I could care less if we’re experiencing performance issues but you better tell me when stuff is on fire. Allow updates to be provided and allow quick creation and updates – I want to be able to let people know we’re working on stuff quickly – but I also want to update them as we go along. I want the ability to remove things as well, if an update was incorrect I don’t want it leading to confusion. Finally, I want canning. We do this for OWN support and abuse the canned update system to it’s fullest – the update should be quick, approved and let the staff focus on addressing the problem not massaging the issue notice.

Subscriptions – Who cares about the issue? Shockey Monkey is used widely – both by businesses that manage their own IT and IT Solution Providers. Some systems are used for external alerting, the others for internal alerting. So the flexibility of displaying this information should be key. I’d like to be able to embed the monitoring dashboard in a web page, in an email, in a sidebar of a blog and I want it to send notifications. I for one will never allow email alerts – but you don’t run the kind of business I run so maybe the email reports are critical to you.

We have been disappointed looked at the dashboards used in our industry and we just did not see something that fit our need. To be specific:

We need an elegant, time efficient and portable dashboard system for internal and external alerts.

So.. what’s missing? Let me know via comments, email (vlad@vladville.com) or chime in at the forums at www.shockeymonkey.com/jungle (must be a current Shockey Monkey user, though the software itself is free)

Perseverance

Work Ethic
1 Comment

(This has nothing to do with IT or business)

Happy Monday!

In most places, saying the above will get you punched. Today is going to suck. You’re going from what you like to doing what you need to, theological objections aside: it’s your purpose. And once upon a time when you first got your job or started your company, you were excited, euphoric, content and looked forward to it.

Then the reality that everything good comes with a little bit of bad snaked in and now you have a choice:

Dwell on the stuff that you don’t like.. or crush it first and get to stuff that you do like.

If you dwell on the stuff you don’t like, I promise, it won’t go away. If the stuff that sucks about Monday isn’t done today, then Tuesday will suck, too. But Tuesday will suck worse than Monday, Wednesday worse than Tuesday and by Thursday you’ll be counting down the minutes till Friday and your freedom. Would you live in a prison for five days so you can have two days of fun?

Happy Monday: Yes, really. Write down the crap that is pissing you off and take care of that first. The faster you get to your happy place, the shorter the prison sentence doing stuff that you hate.

Whether today sucks or not is entirely up to you. So what’s it gonna be?

Varvid Venue

Pimpin
1 Comment

I don’t typically do product endorsements, mostly because I haven’t figured out how to take money for it. But every now and then someone in our industry addresses a critical need that is also accompanied by good people and good reputation.

I spend a lot of my time traveling and the topic of 2010 has been return to growth slowed down by inability to bring in new business quickly enough. New client every quarter, month or week is simply not enough in the IT Solution Provider world that faces competition and compressed margins. Everyone I talk to wants referrals, yet the real reason they are facing problems in the first place is their own online presentation.

For the most part, IT Solution Provider web pages are meant to make the phone ring. Solution providers typically don’t have a ton of content to share, lots of services to describe or highly technical information to share. There are few events to speak of and IT services in SMB are typically considered by people that don’t understand everything about IT services in the first place – so a special on something that is not readily recognizable (ie, I can’t figure out the value) is not going to make the phone ring.

What works?

Small business hiring an IT solution provider operates in the same mindset as a small business trying to hire an employee.

Are they personable? Are they knowledgeable? Are they experienced? Are they someone that can work with us?

Nothing quite answers that like a brief video.

Varvid helps partners with production of video and social media for a very, very low price. You know, all that stuff that you should be doing and you know you’re missing out on – but don’t do because you have better things to do than spending hours on editing video. This is where consistency matters, where not reinventing the wheel is going to save you money and something that you desperately need.

www.varvid.com

The guys behind this product are fantastic and Aaron Booker is someone I’ve known for years. I recommend you check them out. I have not been paid or enticed to write this post in any way (though he does owe me a beer now), it’s just something I thought addresses the major problem area that many of the people I work with face and I thought I’d throw it out there.

Basic Math & Bad Business Decisions

IT Business, WordPress
Comments Off on Basic Math & Bad Business Decisions

Being bad at math and making bad business decisions goes hand in hand. Sometimes we make bad decisions because we don’t know all the cost factors, replacement costs, unforeseen expenses and so on. Can’t do much about that. But sometimes we rationally ignore the basic arithmetic for the sake of vanity, promise or blind ambition.

I keep on telling myself that one day I’ll learn to fix that Smile

It has not happened yet.

In the long, long time ago I wrote a mail server. Over time that monster grew, scaled, exploded in complexity and.. aged.

Over the past month, I have been working on moving to a new architecture and rebuilding the system to incorporate all the new advanced stuff. At some point last week I hit a few major roadblocks that basically made it clear that I would have to rewrite a massive amount of our automation and management infrastructure.

STOP.

My time is not cheap. I’d like to think that in the marketplace as a VAR I could make double digits per hour if I really tried. 😉 But here I was, about to spend at least a week rewriting an infrastructure for something that A) Worked and B) Wasn’t a massively growing product.

Sanity check here: How many hours would I have to spend to do this? Divide by an average profit per mailbox? How long would it take to break even and make profit again?

What I should have done is have done is put my focus on a more lucrative project.

So I failed.

But, I had a really, really, really good reason – which is what you always say when you do something stupid – in that this new technology will allow us to scale faster and compete with Google and Big Pile of S*** / 360.

The Difference

Any rational person with any common sense would look at the above and agree with me that it was a waste.

But you’d be wrong.

The business owners, CEOs and others would probably take side with me in thinking that what is essential to keeping an organization competitive in the marketplace must be done regardless of tradeoff costs.

But those same people would sack an employee for doing the very same thing.

For business owners and people driving forward, accountability is very fluid. It’s what we make out of it. But employees are paid for a job – and a very specific one at that. I stand to lose millions of imaginary dollars if I fail – but I stand to win them if I’m right. Employees always have only their salary at risk – which they can replace relatively easily with another employer.

The point being, the prioritization of resources can often be frustrating for your employees to understand because they only see their role in it – until the next paycheck. Your role as the boss / owner / CEO is to make sure the company exists years down the road.

I hope this makes sense. There is no right or wrong – but there needs to be a vision and strategy. Sometimes getting from here to there isn’t paved with completely common sense. But if you believe it, and can work on making it a reality, the only real cost is your effort.

The Importance of Vendor Relationships

IT Business, OwnWebNow
3 Comments

It’s important to work closely with the people to deliver a solution end to end. Most people only show initiative in a destructive way: posting negative feedback to Twitter, groups and anyone that will listen to their hardships.

Few people use that energy towards something positive. And they win big.

I post my cell phone at the end and at the beginning of every presentation I make. It’s so that anyone that hears me talk can count on me.

Sounds like a load of bull, doesn’t it?

Yet, it’s true. Working with vendors can help you. But how? What are some real examples of how people work on a win-win?

Sometimes it’s as simple as asking a question or asking for a favor. In the past few days I have helped a partner with some advice on selling his business, helping escalate a ticket up to my chief Exchange engineer, helping a business that was (flooded) out and couldn’t make a purchasing decision on ExchangeDefender yet needed to get back up to help coordinate volunteers and then some.

Your mileage may vary.

I completely and honestly believe that most people aren’t abusive jerks. There are some really good reasons for implementation of some really, really idiotic policies.

Unfortunately, rules are made to prohibit abuse by the few bad apples out there – and sometimes they affect the people that are just trying to do their best.

Case and point:

Our Exchange hosting comes with secure SMTP / TLS access. It also comes with ExchangeDefender that allows outbound SMTP relay to additional IP addresses. Our partner had a client that used a copier that sent out scans via email and used our SMTP server on the Exchange side. It’s something that works, but not something that we support.

Why? Well, the ISPs tend to block port 25. Every device has a different configuration and setup. Every network has a different policy and firewall configuration. We provide configuration information, making it work is something that partners do.

Recently we decommissioned a set of servers from our Exchange environment to do a service pack upgrade and implement DAG. When we did so, using the old servers for SMTP stopped – nobody naturally noticed anything else wrong since all Exchange services failed over in a cluster.

Our partner had a problem. When he asked for help, nobody on my team could assist him. It’s just not something we do.

This is one of those cases where the service is disservice: We have several ways of helping you get your mail out of your copier/scanner/fax, but we cannot offer you advice or consulting on how to implement it. It’s simply not our job.

Yes, We can tell you to use outbound.exchangedefender.com

Yes, We can tell you which louie.exchangedefender.com server will accept traffic on port 587 and which alternate ports we offer.

Yes, We can even give you some pointers and workarounds.

Yes, We can test that it works on our end and that you’re using the right IP addresses, usernames, passwords and ports.

But if you hit the wall, configuration of appliances isn’t something that’s going to be done over the phone.

Unless you call me.

Why do I have the power of the greyskull? Mostly, because once things go wrong there is nothing above me. And this is how we arrive at how policies are made. When things go right, we’re a small part of the solution. When things go wrong, we’re entirely to blame for everything.

So my team knows their boundaries – and they know not to push them because if they mess things up, they have to answer to me. I however explain the risks to our partners and tell them the good, the bad and the ugly. Some call it honestly, but it’s just a matter of reality and experience: I’ve seen this before and if things go horribly wrong, I can still sleep at night. If my team misleads someone, it’s not just their fault – it’s my fault.

Service

The service you pay for is the service that is delivered along the guidelines.

Relationships get you the service above and beyond what you’re paying for because you are trusted with more information. Where the “by the rulebook” stuff you pay for will get you to a point, relationships and working with your vendors can help you go further.

The more you work with people, the more you talk about what you’re working on, the more feedback you’ll get, the more favors people will do for you and the more ideas you’ll get on how to move on up.

People often ask me why I spend so much of my time blogging and contributing to the community – hope this explains it.

Ironman Update

GTD
Comments Off on Ironman Update

The other day someone asked how the Ironman Challenge was going. Well, you tell me: putting together test servers on a Sunday evening.

IMG_1510

So what’s the Ironman deal? Working for 90 days straight – no weekends, no days off, no excuses.

Why? That’s actually far simpler.

I have a really good team managing and running OWN that I do not have to be a part of day-to-day operations at this point. I’ve been telling them all for two months: Just don’t tell me about it!

This way, my entire focus is on bringing together our 3-5 year plan and rolling out the features and services that will keep us growing for the next few years.

That starts with trust that my team can kick ass without me and knows exactly what to do without any of my involvement. It ends with the ignorance of the catastrophic problems that will cause in the long term. I’ve said many times that execution is the least important part of business because if you planned things right and got everything together correctly, anyone can “do the work” – when you look at some of the most profitable companies, their “execution” is done by people very low on the pay grade.

Sounds good, why work so hard?

Discipline.

For the first time in 13 years, I have nobody to answer to and it doesn’t matter too much if I kick ass or just slide or even show up at all. So the natural tendency would be to slack off, get a bunch of stuff started and finish maybe one thing – poorly.

I’m hoping that the hack of really investing a full quarter, honestly, will give me more incentive to upgrade my businesses. Nobody wants to look on months of work without break and feel like it’s been a waste.

Where did you find the time?

I get this all the time. I cut other professional development out.

Road trips – axed. Conferences – cut. Non-company webcasts – bye.

Now that I’m not a critical part of day-to-day operations, I have far less involvement in literally everything. Less meetings. Less reviews. Less “quick questions” that end up killing an hour. No IMs or other stuff.

All I do is review, approve and comment. I have one lunch meeting a day with different people and move on.

I have also cut a lot of professional and personal development. No more business books. No more blogs. No more magazines. The hour or two a day that went to that had to be moved around. And since we have a 2 month old and I’m pretty much on house arrest socially as a result of it – why not do the most with it?

Permanent change or temporary?

Temporary. Very, very temporary.

What last year taught me is that we’re capable of a whole lot more. Now I’m building it.

I’ll go back to being more involved in stuff when I transition it. But here is how I came to this decision.

What do I like the most about my job? Building stuff. The most logical thing would be to hire someone to build stuff while I stay where I’m at. But what if I could both go back to building stuff while my staff matures even more and proves they can run this thing without me, at all?

There you go – Ironman.

I have built a very successful channel company and now I am trying to build beyond that.

But if I don’t challenge myself, who is going to call me out on slacking other than the virtual deadline I’ve built for myself mentally.

Remember all those GTD posts I made around new years? It’s really a process. Find distractions, time wasters, excuses and time sinks and kill them. You’d be surprised how much happier you are with your life when you spend most of it doing what you love or at least master the way of eliminating negative things from your work and home life.

The Weather Report Podcast

Cloud, IT Business, Podcast
Comments Off on The Weather Report Podcast

logoYesterday I mentioned the latest episode of The Weather Report covered the discussion about how VARs can survive in the cloud and the controversy over cloud billing. Well, you’ve flooded my inbox: What is The Weather Report?

Well, a few years ago I had a wildly popular podcast called SBS Show. It had thousands upon thousands of subscribers and covered the emerging world of the SMB IT consultant. Community had matured past the need for an hour long show so we started doing the SPAM Show, covering the events and developments for MSPs – but after about 20 episodes we all got too busy and it became apparent that putting together these podcasts was a full time job.

This gave birth to Looks Cloudy, a blog focused on getting the VAR/MSP into the cloud. There are so many things to consider and stay on top when it comes to the cloud – with everyone spending money and riding the hype train, being able to competently recommend it is quite difficult. Own Web Now wanted to help but my time was too scarce and I became too unreliable to do it.

Enter Kate Hunt (kate@ownwebnow.com) – she is now running the blog, organizing podcasts, recording quick weekly shows to keep you and your staff in the know.

We got a lot of feedback about what you could use and what you needed. We wanted to provide that.

So tune in. Tweet about it. Blog about it. http://www.LooksCloudy.com

Most of all – if you know someone that needs to be on it that knows a lot about our business and VARs – let’s get them on the podcast.

We do a lot for our community. This is just one more thing. Hope you enjoy it.

When will Microsoft hand over account control in the cloud?

Microsoft
8 Comments

I have written many stories on the Microsoft cloud control, dating back to the big WPC announcement and the infamous “coownership” tag Microsoft originally put on the idea of working without a VAR in the middle.

Few talking points in the VAR world are as venomous as the topic of billing control. It falls in the same neighborhood as criticizing someone’s religion or trying to change their mind on taxes – it’s a topic loaded with belief and faith and very little fact – with the exception of one: the VARs feeling like Microsoft’s got a hand in their pocket taking their money and the profits they could (or should) be making from their clients.

Microsoft allowing partners to directly bill for cloud services is the IT resellers channels version of “iPhone on Verizon” or “Duke Nukem Forever is ready!”

The fact of whether or not Microsoft should allow for this to happen really comes down to multiple facts that nobody has an answer to: Is Google beating Microsoft for the customers? Has BPOS been a glowing success? How big are SPLA revenues?

Allow me to break down the decision making tree, free of PR junk that keeps on entering this conversation. Remember, only the bottom line $ matters here because we’re not trading emotions, we’re dealing with 3 companies fighting to please their shareholders.

Is Google beating Microsoft for the customers?

With Ozzie’s departure, Microsoft finally unwrapped it’s tombstone on the grave of the innovative company it once was. Today, even Bob Muglia left – the man who has basically built Microsoft’s server / enterprise business. Who is left? Ballmer and Turner.

With Kevin Turner at the helm, Microsoft has become about one thing: We need to beat our competitors. Simply put, Microsoft chases.

Google Apps brought you Microsoft BPOS. Google came out with a low cost email product and Microsoft had to do the same.

Milestone 1: Microsoft will turn over billing control to partners when it becomes obvious that it alone cannot outsell Google.

Has BPOS been a glowing success?

The answer to this question varies depending on who you ask. If you ask Microsoft partners who have lost clients to Microsoft or Google, it has been very successful. If you ask Microsoft and it’s PR engine, it has been extremely successful and they will quote a long list of Fortune 1000 companies that moved to the cloud with them.

Then you consider that Microsoft had to rename the product and restructure it.

Milestone 2: Microsoft will turn over billing control to partners once it recognizes that further sales depend on the partner alone.

How big are SPLA revenues?

Microsoft partner argument for billing control is on the grounds that Microsoft partners offer critical value to the end client. However, Microsoft offers all the parts needed to build BPOS – it’s even in the SKU list on the SPLA agreement any Microsoft partner can sign with Microsoft.

So if the partners provide so much value, why aren’t they building it themselves?

Or are they?

Milestone 3: Microsoft will turn over billing control to partners once the SPLA profits fall below the BPOS profits.

To sum it all up..

This is all my personal opinion of course – but the track record clearly makes Microsoft a chaser in the IT world. I’m sure they would rather sit back and just keep on cashing in on market leading Windows and Office products day in and day out.

But Google crashed the party and Microsoft had to respond. Microsoft had to respond in a way that would make them a serious contender: By bypassing Microsoft partners, Microsoft was able to control the cost and make itself competitive instead of being priced out of the competition entirely by it’s partners and VARs.

So is Microsoft beating Google? Are it’s partners building their own BPOS – to the extent that there is no reason to turn it’s control over to it’s partners – or is Microsoft losing them to Google? And finally, are partners stopping to sell Windows & Office and to what extent?

This is all that matters to Turner. This is all that matters to Microsoft.

With Microsoft trying to push Office down with the cloud, it may finally answer the question on how relevant it’s partners are to it’s success in the cloud age – and the numbers behind it are known to only two companies: Only one of them writes software for a living.

For additional perspective, download the latest Looks Cloudy podcast with Kate Hunt and Larry Walsh as they discuss the VAR control in the cloud.

My opinion remains that Microsoft has decided it doesn’t need VARs or partners in the cloud. If they are all in the cloud, and they believe they can take Google and Apple alone, then the only partners that matter are the ones that make stuff (hardware – Acer, HP, Dell, Samsung) and not the ones that deliver services that Microsoft should be delivering.

It’s all about money. Don’t expect Microsoft to share it unless it’s absolutely critical.