Changes Coming To Windows Intune (And The Market)

Windows Intune is Microsoft’s client device management system that is run from the cloud. That means that you don’t install a management server; you log into a portal, install agents on a client device, and manage those devices from that portal. 

The Competition

Intune competes against products such as Kaseya and Level Platforms. Intune was very late to the market versus these products. And admittedly, these products have huge market penetration and more functionality. They recognised that their target market was the small/medium enterprise (SME). A savvy product manager understands that most SMEs don’t normally have an IT department; anything beyond a password reset is usually (not always) done by a service provider (selling managed IT services). Kaseya and Level Platforms figured that out, and they sell a partner driven product, allowing white labelling, partner invoicing, centralised management, etc.

In Ireland, I’d guess that a big majority of service providers are using one of these two products to manage PCs and servers on their client sites.

Windows Intune – The Past

Windows Intune was released about 2 years ago (exact date isn’t important). As a nerd, I was interested. I saw the potential for partners to use it, and I saw the potential for large businesses to use Intune for mobile workers and small branch offices (retail POS devices).

Microsoft partners evaluated Intune. Unfortunately they found it lacking:

• Less functionality than Kaseya or Level Platforms
• No server management functionality – SMEs have servers too! 

But the real kicker, as I covered back in March 2011, was the price (I got some heat for that blog post from a certain devices and services company):

• Microsoft really screwed the pooch by overpricing non-USA markets for the same cloud-based service. Eurozone markets were charged 40% more than USA customers at that time. That was moronic.
• Bundling Software Assurance in the deal drove the price up to $11 per device. Meanwhile, the competition was around half the price.

Imagine trying to promote or sell a product that is twice the price of the competition, and has less functionality than that same competition, and the competition already has huge market penetration. And that’s why Windows Intune barely made any sales at all … anywhere on the planet.

The Shifting Sands

While Intune, Kaseya, Level Platforms are aimed at everywhere from the SME to Fortune 500, their core market is the SME. In Ireland, most of our companies are SMEs. Sure. we’re a small country of 4 million people, but it’s the same in Germany, the UK, France, Australia, Canada, and the USA. There are only so many CitiGroups, Koch Brothers, etc.

In Ireland:

• 20% of servers are sold to companies with fewer than 100 employees
• 75% of <25 user businesses (and there’s lots of them) don’t own a server – their primary IT cares are networking, file/print, and email
• 55%-60% of SBS servers are estimated to be of the 2003 generation

Fact: there is no more SBS. Microsoft isn’t making a Windows Server that is a DC, Exchange server, file/print, and Sharepoint server for that market any more. The solution for that market is “the new Office”, i.e. subscriptions of Offce365 with Office 2013 included in the package (Office Web Apps, Click-to-Run, or temporary run anywhere). If you want, you can sell a Microserver to that 75% of <25 user companies with Windows Server 2012 Essentials to give them:

• A domain controller with Group Policy
• Cheap bulk storage in the office
• Integration with Office365

Microsoft partners have been hearing the story about Office in the cloud since BPOS back in 2008 (or thereabouts – not that important). The majority of partners had no interest: Microsoft was direct invoicing the customer and that stole the customer relationship from the partner. Office365 just did not have market penetration with the market that mattered: the Microsoft partner. They’re the guys that advise, design, and implement IT for the SME. Microsoft screwed the pooch again (that’s one sore pooch!).

Microsoft got the same feedback the world over:

• Change Office365 licensing so partners can resell it and they’ll be interested
• Halve the price of Windows Intune (remove the SA obligation) and you might have a fighting chance

As of February 2013, partners will be able to resell Office 365 (with Office 2013 included) via the Open program to customers. That is a huge deal. The subscription price will also include leased Office 2013 that is installed and managed from the cloud; that means the customer gets more bang from their buck:

• Office 2013: regularly updated from the cloud
• Email
• Collaboration via SharePoint (and a new app store)
• Lync for presence, meetings, and online events
• Plus whatever MSFT decides to add to the package

That means the role of the server in the smaller SME fades, maybe even disappears. Note: some SMEs will always need local storage, Group Policy, and/or LOB apps that can’t be cloud based, but this is not a back versus white world; it’s all shades of grey.  Maybe the server management functionality of Kaseya and Level Platforms isn’t as necessary any more!

The New Windows Intune

The current version of Windows Intune (sometimes called v3) added the ability to manage mobile devices running Android and iOS (iPhones and iPads). That includes policies and software distribution:

• The ability to link to apps in the platform’s app store, which is included in all mobile device management products
• App sideloading, which allows you to install an app onto a device without using an app store or jailbreaking

The management stuff is good. The app store stuff is very good for larger enterprises that could afford to get custom apps developed for mobile devices, but that just a flashy unrealistic demo for the SME.

v4 of Windows Intune is on the way, as Mary Jo Foley reported yesterday. It will be continuing support for mobile devices (including Windows Phone), and adding Windows 8/RT support too. But here’s the big news: Windows Intune pricing is changing (and in a good way).  There will be two SKUs:

Some notes:

• Microsoft did not screw the pooch (that lucky puppy!) on the non-USA pricing, e.g. they recognized that $6 is not €6!
• You can purchase Windows Intune without SA (no Windows 7/8 Enterprise) and still get your free managed Antivirus in the form of Endpoint Protection. The price is $6 or €4.89 per user.
• You can choose to buy the SA SKU to lease Windows 8 Enterprise and it’s extra features
• You can also choose to add on MDOP (not shown) if you subscribe to the SA option

€4.89 ($6) per user per month for client device management with managed antivirus. But here’s the nice bit: The likes of Forrester says that the modern worker can have up to 5 smart devices. The per user licensing of Windows Intune covers 5 devices!  Let’s compare:

Let’s say you were a Windows Intune v2 user with a PC and laptop. Your cost was €11 per device per month. Your total price is €22. With the new pricing, you are charged €4.89 per user and you can have up to 5 devices, including PCs, laptops, tablets, and smartphones.  You just saved €17.11 per month.  Nice!

BTW, Windows Intune has always allowed partners to subscribe on behalf of customers. The idea here is that you sell a managed service and include the price of the management into your service charge.  You will be able to buy on behalf and cross charge for both Windows Intune and Office365 for your managed SME customers.

What the SME Will Look Like

For the SME, the Microsoft solution is cloud-centric and looks like this:

Everything is cloud connected. Cloud-based management is perfect for mobile devices (tablets on the move, smartphones not on the network, and roaming/home users). Traditional on-site management such as LanDesk or System Center Configuration Manager aren’t really that good for those mobile devices because those management solutions are designed for the WAN, not for the Internet.

Office 365 has the same benefit: the SME with less than 25 users doesn’t want a server with 12+ GB of RAM to run SBS. Sell them Office365 and give them the same basic tools and mobility that a Fortune 500 has. No matter where they go or work, they’ll always have access to their data and communication/collaboration tools.

The managed service provider wins too:

• They resell the solutions to their customers, offering a superior experience. The clever providers do more than just deploy; they add value, finding a unique selling point (USP) that keeps the customer coming back to them. You’ll go out of business if you rely on installing Office for a living.
• They can manage customer infrastructure remotely: RemoteAssist via Windows Intune gets you onto customer devices, Windows Intune can install software remotely, Office365 puts critical services in the cloud that can be managed from a web browser.

What the Medium/Large Company Will Look Like

Here we’re talking about the bigger company with more complexity:

So here we see a bit of “best of both worlds”. System Center is used to deploy and manage the internal infrastructure and services on Hyper-V/private cloud. PCs and laptops on the corporate WAN are managed by System Center too.

Windows Intune is used to manage:

• Mobile devices not on the corporate WAN
• BYOD (laptops, tablets, phones) machines that are brought into the office and might sit on some isolated wireless networks with firewalled access to applications in the corporate WAN.
• Devices in small branch offices, that might otherwise be too complicated to manage in System Center

With SP1, System Center 2012 can integrate with Windows Intune to give IT a single console for device management.  That unification of infrastructure is one of the goals of System Center 2012, enabling easier administration (another goal).  In this design, System Center 2012 SP1 Configuration Manager will deploy software to, patch, and provide AV for the following on the corporate WAN:

• Windows 8/RT, and older
• Mac OS
• Linux
• Windows Servers too – never forget them!

Windows Intune will manage the following mobile devices from the cloud:

• Windows 8/RT and older tablets, PCs, and laptops
• Android phones and tablets
• iOS iPhones and iPads

Office can reside in both the private cloud/internal infrastructure and in the cloud via Office365.

So there you go, Windows Intune will be:

• Cheaper
• Be the solution for BYOD, mobile devices, home workers, and small branch offices
• Reflect the changing nature of large enterprises with mobility and BYOD
• Reflect the changing nature of SMEs that are moving to the cloud
• A much more interesting solution for managed service providers, such as Microsoft partners working in the SME space