Domain name registrar GoDaddy and Microsoft today announced a partnership that puts Office 365, the latter's rent-not-own software suite, in front of GoDaddy's small business customers.
"This is an obvious symbiotic partnership," said Wes Miller, analyst with Directions on Microsoft. "There are a lot of ex-Microsoft people there, and GoDaddy is a huge registrar."
GoDaddy's chief executive, Blake Irving, was formerly with Microsoft, where he led the Windows Live team. Among others, Rick Eames, who heads design and user experience at GoDaddy, was also once at Microsoft.
Under the partnership, which the companies cast as a strategic agreement, GoDaddy will sell three Office 365 plans linked to the domains of its customers, who are predominantly small business owners.
At the lowest-priced end, GoDaddy will market "Email Essentials," a $3 per user per month plan that provides email hosting only, with storage limited to 5GB for messages and 2GB for other files via Microsoft's SkyDrive Pro. That plan, said Steven Aldrich, GoDaddy's senior vice president of Business Applications, is new to the Office 365 family, one the two companies came up with together.
The other plans -- named Business Essentials and Productivity Plus by GoDaddy -- are feature-for-feature replicas of what Microsoft itself sells as Office 365 Small Business and Office 365 Small Business Premium, respectively.
The former offers email hosting and larger amounts of storage space, as well as access to Microsoft's browser-based Office apps. The latter adds a subscription license to Office 2013 (Windows) and Office for Mac 2011 (OS X) that lets customers locally install the suite on up to five personal computers, as well as rights to run the iOS and Android versions of Office Mobile on their iPhones and Android tablets and smartphones.
Both GoDaddy and Microsoft charge $12.50 per user per month for Productivity Plus/Office 365 Small Business Premium.
But the difference between the prices for Business Essentials and Office 365 Small Business is striking: GoDaddy charges $9 per user per month for its version while Microsoft's price is only $5 per user per month, a 44% savings.
What's up with that?
Aldrich acknowledged that Business Essentials was a feature-for-feature match for Microsoft's Office 365 Small Business, but ticked off three bonus elements in GoDaddy's offerings.
"Each plan is a one-click setup, really one-click," Aldrich said, citing domain selection and registration, and email address suggestion. GoDaddy also created a custom administrative panel for its Office 365 users crafted with small business owners in mind, and will provide 24/7 live support for all customers.
"We think it's the right value for all that," said Aldrich of the $9 per user per month price of Business Essentials.
GoDaddy created its own management dashboard for small business customers who subscribe to Microsoft's Office 365 email hosting service or productivity suite. (Image: GoDaddy.)
Miller, of Directions on Microsoft, pointed out that some small business customers will pay more for a more seamless experience in linking Office 365 to their already-existing or just-purchased domains.
For its part of the deal, Microsoft gets access to GoDaddy's 12 million customers. "Microsoft is trying to find partners who are in the value chain, who already have customers they are trying to reach," said Miller of the GoDaddy arrangement, while also referring to agreements Microsoft struck with Verizon and Sprint last year.
Although financial details of the deal were not announced, Aldrich said GoDaddy gets plenty in return.
"What we have found when looking to the future in helping small businesses be successful is that we want to give the small business owner the tools they need to start to grow and run their companies," Aldrich said.
"The vast majority of our small business customers have grown up with Office on their desktops," said Aldrich when asked why GoDaddy went with Microsoft's subscription service rather than, say, Google Apps for Business. "What they want to focus on is simplicity among the services they buy, and to get more done wherever they are."
Microsoft launched its revamped Office 365 almost a year ago, with its first-ever consumer offering under that label and new plans for small businesses. Since then, the company has touted consumer uptake -- the latest was last fall when it said it had 2 million on the rolls for Office 365 Home Premium -- but has declined to give a similar number for small business and enterprise sign-ups.
"There's a reason why we're hearing most about consumers," said Miller, implying that Microsoft has had a tougher time breaking into the commercial market with its annual-fee concept. "Large businesses are really trying to understand the value proposition at this point," said Miller.
If Office 365 has been a harder sell to businesses, it's understandable why GoDaddy's millions of potential customers would look very tempting.
GoDaddy started selling its Office 365 plans today to U.S. and Canadian customers, and said it would expand the offer globally in the next three months.
Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is [email protected].
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