Partner transition to cloud business models has been underway for some time and isn't over yet, so we are still seeing new aspects of adaptation. We expect to see two interesting changes accelerating in 2014: More options for a monthly buying model, and a newer, younger breed of salesperson.
For one, the days of the annual cloud payment contract are numbered as monthly billing can be more attractive, not only for the SMB sector but also for government and even Fortune 500. Partners want to offer their own products and services on a monthly payment plan and therefore are more attracted to relationships with software vendors who allow them to resell cloud solutions on the same terms. That's why we predict the decline for annual payment schemes for cloud in 2014.
Cloud will also continue to cause disruption in sales organizations. Partners tell us they are getting some of the best results with younger staff in SMB markets because they grew up with technology and social media, and are very comfortable interacting virtually with customers and prospects. They also aren't accustomed to the old model of making big commissions on large upfront payment deals for solutions and services, so are quite happy with residuals from subscription annuities. In fact, one of the top Microsoft Office 365 partner sales representatives is an 18 year old in the U.K. This year, we expect to see partners grapple with whether to continue with integrated sales teams or divide them into cloud only versus on-premise specialists. There are compelling arguments on both sides, so we look forward to seeing which approach proves to be the winning tactic.