Time For Action

Partners can no longer maintain the status quo. Once they assess their business models, they need to forge plans to adapt to the changing market.

"Clients have had five years to become familiar and comfortable with the features, uptime performance, and other potential differentiators that hyperscale providers can deliver," Paul said.

Many SPLA partners have built reputations that are more than sufficient to sustain the budget-priced standalone and bundled offerings that are often most attractive to the small or mid-sized business. They should think about how they can build on those strengths.

But small hosting providers shouldn't think they can out-market or out-incentivize Microsoft and its peers, Paul told IT Best of Breed.