Several months ago I did mention that there is no Business Model to resell BPOS unless you are a systems integrator and earn your money on time & material. Read – http://mrfoged.wordpress.com/2009/09/02/there-is-no-partner-business-model-in-microsoft-bpos/

Based on todays announcement from Microsoft (Read http://www.microsoft.com/Presspass/press/2009/nov09/11-02BPOSExpandsPR.mspx) I really need to recap my thoughts and learnings from my blog post. Not only does the price cut impact the whole Microsoft Hosting Industry, but a possible earning-model, has just become more hard to cover. Reality is that it’s defiantly not reselling model now for Microsoft Business Productivity Online, and I urge hosters to review their business model, disrupt the model and take a more vertical approach towards differentiating their services in a hosting world. I still believe there are huge markets to capture on Microsoft technology; running a plain vanilla SaaS hosting business has just become harder.

To cover a salary for a medium sales rep. on phone, you now have to cover:

Microsoft Exchange Online, priced at $5 per seat, per month – needs 4.500 SKUs sold per year.

Microsoft Online Suite, priced at $10 per seat, per month – needs 2.700 SKUs sold per year.

It is a tough game…