Premier Ultimate Aims to Boost IT Health Plus Microsoft’s Services Revenues

• Posted: Thursday, August 21, 2008
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• Author: pradhana
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• Filed under: Microsoft, Premier Ultimate

By Dwight Davis, VP at Ovum

Yesterday Microsoft announced Premier Ultimate, a high-end support services offering that emphasizes proactive and preventative IT ‘health’ procedures rather than reactive responses to operational incidents. With Premier Ultimate, the vendor aims to establish custom-designed and premium-priced services contracts with key customers, resulting in better-performing IT infrastructure for the customers and more durable and profitable services relationships for itself.

The popularity of Premier Ultimate will depend upon Microsoft’s ability to prove that its collection of proactive and unlimited reactive services delivers business benefits that exceed the additional contract costs that customers will typically bear.

Microsoft’s previous high-end support services offering, Premier Plus, already offers some proactive elements (some as extra-cost options), including health-check and supportability assessments and operational guidance. Premier Ultimate custom bundles these and other preventative services along with 24×7 account management (on-site and off-site) and support for an unlimited number of incident resolution engagements. Lower levels of premier and ‘essential’ support programs from Microsoft cover only a set number of support incidents per year.

In part because of its exposure to unlimited support calls, Microsoft is initially offering Premier Ultimate to customers with which it has an established support history. To arrive at a proposed cost for each Premier Ultimate contract, Microsoft works with customers individually to assess their support history, the health of their current IT configurations and processes, and their desired IT and business objectives. Microsoft then offers a Premier Ultimate program and fee designed to address the specific needs and objectives of the customer.

Microsoft stresses that it isn’t trying to force anyone into a Premier Ultimate relationship, but it believes the program will prove attractive to many of its existing premier customers. By entering into a Premier Ultimate contract, the customer will be able to know with certainty what its support expenses will be, rather than being exposed to higher per-incident costs should it exceed its fixed number of incident calls.

Most importantly, by leveraging Microsoft’s IT health assessment services and best practices, customers should be able to improve the efficiency, availability and performance of their Microsoft-based IT infrastructure over time.

Transforming Microsoft’s broad deployment and operational knowledge into services revenue growth

It’s important to remember, of course, that Microsoft’s support services are – for now, at least – very much specific to its own products. As Windows Server, Exchange Server, SQL Server, SharePoint Server and other core Microsoft platforms have climbed higher up the enterprise ladder in recent years, the vendor has amassed an extensive knowledge base of best practices for deploying, configuring and operating collections of its products.

With Premier Ultimate, Microsoft is now taking the obvious step of exploiting that knowledge to improve the IT operations of key customers and, not incidentally, to drive up its own support revenues.

By some measures, Microsoft is arriving late to the proactive and preventative services party, given that services-centric vendors such as IBM, Hewlett-Packard, and others have long emphasized the benefits of moving from a reactive to a proactive support mode. Microsoft argues that there is a subtle difference between its and many other vendors’ services offerings, however.

Many vendors, it says, are primarily focused on remotely monitoring customers’ IT operations and springing into action to head off potential failures before they occur. Although Microsoft also offers such proactive monitoring, it says the core objective of Premier Ultimate is to help customers identify and correct technical and operational problem areas up front in order to lessen the risk of future problem scenarios.

Given the customized nature of Premier Ultimate engagements and fees, Microsoft hasn’t released any pricing guidance for its new services offering other than to make it clear that most customers will pay a premium above the current Premier Plus costs.

The vendor says it won’t turn down any customer that expresses interest in a Premier Ultimate relationship, but customers with poorly designed and managed – i.e. high risk and low health – IT environments are likely to face fees so high that they would be dissuaded from moving to this level of premier services. /PR

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