A Revenue Opportunity in the Education Market for Microsoft Partners

July 2010

Table of Contents
Executive Summary ..................................................................................................................................................... 1 Introduction................................................................................................................................................................... 2 IT Core Services ...................................................................................................................................................... 2 User-Managed Services .......................................................................................................................................... 3 Market Opportunity ...................................................................................................................................................... 3 Partner Opportunities ................................................................................................................................................... 4 Services Configuration............................................................................................................................................. 4 Identity Management Services ................................................................................................................................ 5 Integration Services ................................................................................................................................................. 5 Creating a Live@edu Offer .......................................................................................................................................... 5 Calculating Costs and Revenue .............................................................................................................................. 7 Exposure for Partner Offerings................................................................................................................................ 7 Independent Software Vendor Opportunities ......................................................................................................... 8 Partner Call to Action ................................................................................................................................................... 9

A Revenue Opportunity in the Education Market | i

Executive Summary
Today schools, colleges, and universities are adopting hosted communication and collaboration services because of the cost benefits that these solutions provide. Online coursework is increasingly common as well. For Microsoft partners, the time is right for taking advantage of revenue opportunities in the education market. With Microsoft Live@edu, a program that provides educational institutions with hosted and co-branded collaboration and communication services without license fees, partners can solve many problems for their customers. Live@edu implementations can help partners achieve the position of trusted technology advisor, and develop stronger and more profitable relationships with their customers over the long term. Customers who deploy Live@edu often ask their technology partner to expand their hosted email and collaboration services into end-toend solutions that include identity management, single sign-on (SSO), portal integration, portal implementation, and more. The revenue opportunities that stem from Live@edu are limitless. Microsoft partners are reporting: Greatly expanded customer base through marketing of Live@edu. Deal sizes increasing more than tenfold with additional sales (see the Salford Software case study as an example). Stronger, longer-term customer relationships. More overall revenue opportunities because Live@edu complements their existing solutions.

A Revenue Opportunity in the Education Market | 1

Introduction
Faced with ever-tightening budgets, educational institutions must be creative to deliver state-of-the-art services to students, faculty, staff, and alumni. Live@edu, a set of hosted online collaboration and communication services, provides educational institutions with advanced technologies while also reducing their total cost of ownership. Live@edu provides Microsoft Outlook Live email (which is built on Microsoft Exchange Server technology), and access to the Windows Live Messenger instant messaging (IM) client, Windows Live SkyDrive storage technology, Microsoft Office Web Apps (the online versions of Microsoft Office 2010 programs), and shared calendars that coordinate with existing calendaring systems. Live@edu includes both an IT-managed component and a user-managed component.

IT Core Services
IT Core Services is the IT-managed component of Live@edu. It consists of content and services that are managed and administered by the institution itself. All Live@edu services are accessible through a customizable Windows Live ID. For example, for Contoso University, the Windows Live ID for student Jim Glynn can be jim.glynn@contosouniversity.edu. In addition to providing access to all of the Live@edu IT Core Services, the Windows Live ID connects users to student promotions and programs, such as Microsoft DreamSpark technology. Outlook Live provides Microsoft-hosted email that is based on Exchange Server. It can be accessed through popular browsers, including Microsoft Internet Explorer, Firefox, and Safari, and from Microsoft Office Outlook, Microsoft Office Outlook Mobile, or a third-party email client that uses POP3/IMAP or Microsoft Exchange ActiveSync technology. Schools that are currently using Exchange Server can use the same tools, such as the web-based Exchange control panel, to manage their on-premises services and Live@edu. For example, they can use a Global Address List to incorporate student accounts into their existing infrastructure. Outlook Live includes: 10 gigabytes (GB) of space per user mailbox. Microsoft Outlook Web App web experience that can be customized with a schools logo. Interoperation with the Microsoft Office Outlook client or Microsoft Entourage for Mac clients, and access to email from a mobile device. Calendar sharing, contact management, and IM features, including presence awareness. Student control of permissions for Windows Live SkyDrive via the Outlook Web App contact list. Configurable connection to a schools Global Address List. Powerful provisioning and flexible deployment options.

A Revenue Opportunity in the Education Market | 2

User-Managed Services
The user-managed component of Live@edu includes access to online storage and collaboration tools for the user. Live@edu provides each user with access to 25 GB of storage space through Windows Live SkyDrive. Windows Live SkyDrive gives students access to their files from anywhere online. Students control who can access their Windows Live SkyDrive, and can designate whether files and folders are shared or private. Enterprise-level security helps to keep student information safe, and online support is available to students free of charge. Students also have access to Office Web Apps, which they can use to edit and share Microsoft Office filesall online.

Market Opportunity
The market opportunity for Live@edu is vast, because cloud-based servicesthe hosting and management of web applications and services on the Internetare gaining in popularity. Live@edu delivers cloud advantages: lower costs and higher flexibility. Also, research1 indicates that by 2014, the student user population in K-12 and higher education in the United States will expand to 128 million for a total of 128 million potential seats, with an accompanying total market spend by 2015 of U.S.$30 million. The opportunity to market Live@edu in this environment is immense. Today, more than 10,000 schools in more than 130 countries have enrolled in Live@edu, serving eleven million people worldwide. Microsoft is committed to providing a flexible, zero-licensing cost solution to educational institutions to use and build on the branding opportunity with the student market. With Live@edu, Microsoft and partners can win the loyalty of the student populationthe key audience for gaining market share. Live@edu first became available in February 2005, at a time when the cloud was rapidly emerging as a powerful, low-cost solution for businesses and institutions. Initially, Live@edu provided Hotmail as a free, hosted email service for universities. In 2008, to satisfy the more complex needs of university IT departments, Microsoft began to offer Outlook Live as part of Live@edu. Live@edu is based on mature, industry-proven productsthe same technologies that Microsoft Fortune 500 customers use. It relies on powerful application programming interfaces (APIs) such as the Exchange Web Services (EWS) API, a managed interface that partners can use for developing applications that connect with users mailboxes, and for helping customers connect calendaring and messaging to their schools existing portal. Partners can also use Windows PowerShell, a scripting language, to provision mailboxes. With these tools, schools can automatically push a schedule of classes from a faculty mailbox to a students calendar. Administrators can access Outlook Live features programmatically through EWS and by using Windows PowerShell cmdlets, a set of partial commands that can be used to enrich the administration capabilities of mailboxes. Because Outlook Live relies on the same APIs as EWS, partners can use their staffs existing skills to deploy Live@edu. Microsoft continues to enhance and expand Live@edu (see Table 1), which results in ongoing opportunities for partners to deploy new services and perform integration work to ensure that upgrades operate seamlessly within each customers environment.

InternationalDataCorporation(IDC)andGovernmentInsights,2006;U.S.DepartmentofEducation,NationalCenterforEducationStatistics,Common CoreofData,2004;U.S.DepartmentofEducation,NationalCenterforEducationalStatistics,IntegratedPostsecondaryEducationDataSystem,2004.
1

A Revenue Opportunity in the Education Market | 3

Table 1. Live@edu Current and Planned Offerings

Service
Email Collaboration, communication, and productivity Storage Lifestyle Services*

Current Offer
Production Outlook Live Beta (R4) powered by Exchange Microsoft Office Live Workspace with no product-level integration) Windows Live Messenger Windows Live SkyDrive with no product-level integration) Access to other Windows Live services

Planned Improvements/Features
Advanced migration capabilities from on-premises to online services New integrated collaboration suite including Office Web Apps Windows Live SkyDrive more integration with the new collaboration suite Access to other Windows Live services

* These services are not part of the core Live@edu offering, but are accessible through the same Windows Live ID that allows access to email, storage, and the collaboration suite of services.

Partner Opportunities
When partners help their education customers to reduce the complexity of their Live@edu deployments and integrate online cloud-based services with existing environments, the user experience becomes streamlined, management is simplified, and partners in turn increase the depth of their relationship with the customer. As partners deploy Live@edu, they gain a better understanding of each customers business challenges and can begin to address them with technology solutions. With this knowledge, partners can better predict each customers needs, which leads to higher These are the Microsoft customer satisfaction. Further, when partners increase their presence Competencies associated and control in an account, the cost of sales decreases, because there are with success in Live@edu no account acquisition costs with existing customers. Implementations: Partners revenue opportunities will come from providing Live@edu services configuration, identity management services, and integration services. Partners with competency in these three areas will have a strategic advantage, and will be able to capitalize on Live@edu as a prime component of their education solutions portfolio. Identity & Security Unified Communications Portals and Collaboration Server Platform (for Active Directory Services)

Services Configuration
To deploy Live@edu, an institution must complete the activities on the Live@edu Get Started Checklist for enrolling in the program and configuring service. An institution with a dedicated IT administrator can usually complete the setup and configuration itself, but the partner can also do the work for the school and recommend the best approaches to take, based on the schools unique infrastructure. If the institution is already using an email system, mail migration services will be required. Mail migration provides an opportunity for partners to automate repetitive migration tasks with custom code that they develop using Windows PowerShell. (For an example of automated email migration, see the Allen Informtica case study.)

A Revenue Opportunity in the Education Market | 4

Identity Management Services

One of the most basic, value-adding services that a partner can provide is the provisioning of Windows Live IDs for user accounts in the schools Live@edu domain. Value also lies in helping the customer with the tasks required to manage these new identities. In larger institutions with many different systems, identity management can get increasingly complicated as more and more IDs are addedoften becoming too complex for the institution to manage without outside help. Partners can provide identity and security services for these customers. For example, Microsoft partner Dimension Data has capitalized on the interoperability advantages of Live@edu to promote its own identity management solutions, as well as other products (see related case study). The company has found that its opportunities to provide add-on services, such as wireless, video, and unified communications, are essentially limitless.

Live@edu provides entry to extend our entire range of identity management solutions. The question is not by how much can we increase revenue, but really, where does it end? David Grayson, Solution Architect, Dimension Data

Integration Services
Partners can help education customers create simple and powerful user experiences to promote better use of existing services and resources. Partners can deploy a federated (or SSO) environment that automatically recognizes a users identity across many different services, and partners can develop and implement custom portals that aggregate and integrate information and processes, and make them easily available to faculty, staff, and students. Salford Software is a Microsoft partner that provides identity management services and portals. Salford has seen an increase of tenfold in customer deal size as a result of Live@edu.

Live@edu is a stepping stone to larger implementations, and larger revenues. Paul Lees, Technical Director, Salford Software

Creating a Live@edu Offer

To articulate partner services to customers, deployments are categorized as Standard Deployment and Advanced Deployment (see Table 2). A third group of deployment services can be offered, referred to as Custom Development, but the services in this category are not replicable because they must be customized to meet each institutions unique needs.

A Revenue Opportunity in the Education Market | 5

Table 2. Partner Services Categorized by Nature of Customer Deployment

Standard Deployment
Enrollment form information Domain configuration and setup Administrative account settings Settings in Outlook Live (groups, calendar and resources, disclaimers, mail contacts, basic reports, IP white listing) User account creation (CSV import) User first-time activation

Advanced Deployment
Mail flow configuration Control and compliance (Windows PowerShell) SSO toolkit Portal integration (EWS impersonation) Automated identity management (with Microsoft Identity Lifecycle Manager) Directory integration (Windows PowerShell) Migration

Custom Development
Learning management system (LMS) integration Student information system integration Portal integration Other customized solutions

Each customers Live@edu deployment requirements are unique and dependent on the customers current infrastructure and objectives. The categorization shown in Table 3 sorts institutions into four different stages of technology sophistication: basic, standard, heterogeneous, and fully automated.

Table 3. Live@edu Customer Sophistication Levels and Associated Partner Capabilities

Customer Sophistication
Basic

Partner Capability
Standard Deployment

Descriptive Scenario
A single school in an emerging market has no email and wants to rapidly deploy a hosted email solution to its students. The school has limited IT support capabilities, requires a simple domain configuration along with account creation and management, and does not require a portal or SSO. A single community college has a legacy system in place to support faculty and staff. It wants to add email for students and alumni, each in separate domains, and wants to administer the domains separately. There is already a portal in place, and the college wants to authenticate to it. It also needs a low level of automated account management. A school has an on-premises Exchange Server email system that it will keep in place for faculty and staff, but it plans to replace the student email component of the system. Cross-premises interoperation with the faculty and staff system is needed, and the IT staff wants to administer the domains centrally, under one account. The school has multiple applications that users will authenticate to, and so requires SSO. The school also needs scriptable management, but not full automation of account provisioning. A state school system wants to implement hosted email for faculty, staff, and students across multiple campuses. The IT department wants to gain centralized management. Each campus is to get its own domain, and faculty and student accounts will be created within those. SSO is required. Full identity management is needed, as well as password synchronization.

Standard

Light Advanced

Heterogeneous

Advanced Deployment

Fully Automated

Advanced Deployment and Light Development

For a partner implementing a customer solution, the revenue opportunities grow as the scope of the customer solution grows. Each customer starts at a slightly different stage of complexity. As the customer advances, the customers needs change. This advancement creates new opportunities for partners to sell service-intensive

A Revenue Opportunity in the Education Market | 6

solutions, and to cross-sell additional services such as identity management or portal implementation and integration. Salford Software was able to increase a customers deal size from U.S.$10,000 to more than $100,000 with a Microsoft Office SharePoint Server 2007 implementation (see related case study).

Live@edu allows us to get in the door and to present complementary solutions, such as SharePoint Server. Steve Dobson, Technical Director, Salford Software

Calculating Costs and Revenue

Table 4 is a summary of the cumulative effort involved in completing the various steps in a customers Live@edu engagement. This table is taken from the Statement of Work (SOW) Guide developed by Microsoft to help partners develop SOWs for Live@edu.

Table 4. Hours Required to Implement Services in Typical Live@edu Engagement

Scenario
Basic Standard Heterogeneous Automated

Enrolment Hours
6 - 10 8 - 10 8 - 10 8 - 10

Configuration Hours
20 - 28 24 - 30 44 - 54 48 - 60

Integration Hours
0 64 - 72 92 - 104 112 - 128

Testing Hours
20 - 24 20 - 24 20 - 24 20 - 24

Training Hours
60 - 72 60 - 72 60 - 72 60 - 72

TOTAL HOURS
106 - 134 176 - 208 224 - 264 248 - 294

Exposure for Partner Offerings

Partners who have developed a value-added service offering can have their solution listed in the Microsoft Solution Finder database, and will be part of the customer experience in the Service Management Portal. To date, thousands of customers have visited the Service Management Portal to view the solutions that are available in their markets. Creating Your Customer SOW Microsoft has developed the Live@edu SOW Guide for partners to use in developing SOWs for Live@edu customer implementations. The Live@edu SOW Guide includes: Templates for creating SOWs. Instructions for how to use the templates. Guidance on the various tasks and milestones involved in a typical Live@edu engagement. Effort overview and cost calculation methods. Questionnaires for understanding a customers IT environment.

A Revenue Opportunity in the Education Market | 7

Independent Software Vendor Opportunities

Independent software vendors (ISVs) that create solutions for education customers can incorporate Live@edu into their product offerings. Live@edu email, communication, and collaboration services can be used to augment or replace the tools in the learning management system (LMS) on which the institution relies. Partners can provide an enterprise-level email system to increase the quality of the LMS without additional license fees. Three of the areas in which an ISV can provide value are creation and integration of additional functionality and services with Live@edu; integrating Live@edu with existing systems; and using Live@edu functionality as one part of an ISVs comprehensive education solution. The ISV eKool has been able to lower its development costs by taking advantage of Live@edu, while providing schools with better tools that enhance productivity (see related case study). Publishing a Value-Added Services Solution Microsoft partners can expose their solutions to customers through the Service Management Portal website. To do so the partner must: Be part of the Microsoft Partner Network and must have a valid partner ID. Have a Live@edu service solution in the Solution Finder on the Service Management Portal site. Contact Michael Wegmann (mwegmann@microsoft.com) to validate and tag their solution in the partners region. See the following Live@edu blog post regarding customer matchmaking: cs.mseducommunity.com/blogs/ liveatedu_partners_blog/ archive/2010/06/01/live-edpartner-matchmaking.aspx

It makes little sense to develop everything ourselves. Live@edu has excellent tools that are easy to integrate and beneficial for our users. Sten Soosar, Chief Operating Officer, eKool

The following partners are providing educational institutions with further enhancements and flexibility for Live@edu, or are using Live@edu to enhance their comprehensive education solutions.

FullArmor offers the FullArmor MailPortal, built on the Windows Azure platform, which enables institutions to perform cloud-based email migration and add compliance and archiving to Live@edu. Computer Generated Solutions (CGS) provides a hosted Unlimited Mailbox platform to manage the email archiving, compliance, and ediscovery requirements of Live@edu customers with a full-featured product that can ingest current server email along with local archives. CSI Technology Outfitters provides CSI@K12, an enterprise-class email and collaboration solution for K-12 institutions, which is powered by Live@edu and Microsoft Office SharePoint Server 2007.

A Revenue Opportunity in the Education Market | 8

Desire2learn transforms teaching and learning by offering technology and professional services to user communities including K-12, colleges, and universities. Desire2Learn supports mission-critical e-learning in oncampus, distance, and continuing education settings. Through a learning management system, learning object repository, ePortfolio, analytics solution, and other related products, Desire2Learn Learning Suite enables the attainment and sharing of best practices in online education. ePals is the worlds largest K-12 learning network. It offers a secure platform to schools and districts globally for building educational communities, providing quality digital content, and facilitating collaborative learning. The ePals product offerings work with Live@edu and Microsoft Office to expand ePals services with enterprise-grade collaboration tools. its learning The it's learning platform fully interoperates with Outlook Live, SharePoint Online, and Office Web Apps to enhance the it's learning suite of online communication tools. Microsoft and it's learning have built a solution to support the largest possible Live@edu deployments worldwide. The August 2010 update of the it's learning platform includes both Live@Edu integration and migration tools to help schools migrate and integrate millions of users and thousands of domains.

Partner Call to Action

To learn more about Microsoft Live@edu, visit the Microsoft Education Partner Network. Read product information, view readiness webcasts, and more: Create a test domain. Download the ISV Jumpstart Kit (or access the ISV Jumpstart website). Create a service offer using the SOW as a base. Publish a service offer in the matchmaking website. Customize Live@edu marketing material to engage with customers. Work with your local Microsoft office to articulate and design your solution.

If you have questions, contact Michael Wegmann, Senior Product Manager, Partner Online Services.

This document is provided as-is. Information and views expressed in this document, including URL and other Internet Web site references, may change without notice. You bear the risk of using it. This document does not provide you with any legal rights to any intellectual property in any Microsoft product. You may copy and use this document for your internal, reference purposes. This document is confidential and proprietary to Microsoft. It is disclosed and can be used only pursuant to a non-disclosure agreement.

A Revenue Opportunity in the Education Market | 9