Microsoft Urges Partners to Court Public-Sector Customers

WASHINGTON – As thousands of its global partners descend on the nation’s capital, Microsoft is urging its systems integrators, OEMs and other members of its sprawling ecosystem to consider business opportunities with public-sector organizations.

In verticals such as government, education and healthcare, many CIOs labor under constrained budgets, and as they try to introduce new efficiencies in their IT operations, they must also make sense of an onslaught of data and meet rising expectations for civic services.

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In that “do more with less” mindset, company officials see bright prospects for Microsoft and its technology partners in the public sector.

“Some of our biggest deals are in the public sector,” says Laura Ipsen, corporate vice president of Microsoft’s worldwide public sector business. “It’s a very compelling business.”

Microsoft made a number of product announcements ahead of this week’s Worldwide Partner Conference, including plans for a Dynamics CRM cloud for government and an expanded preview of the Azure government cloud, bringing that technology one step closer to general availability.

Microsoft bills the latest government offerings as the next in a series of steps the firm is taking through a transformation into what it’s billing as a “cloud-first, mobile-first” company.

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That mission aligns in many ways with the direction leaders of the federal government are trying to take, embracing the same “mega-trends” of cloud computing, mobile, social and big data that Microsoft has make a centerpiece of this week’s conference.

Microsoft: Our Cloud Works for Small Businesses, Public Sector

A central part of Microsoft’s pitch to its partners is that its account managers will work closely to help smaller firms running on the Microsoft platform navigate compliance issues in their particular markets.

Perhaps nowhere are those concerns a bigger deterrent than in healthcare, Ipsen says. However, she says she sees considerable promise in that market to improve care and lower patient costs through electronic health records, new mobile devices and applications, and other technologies.

“On the health side, I think we’re at a critical juncture. Many of us haven’t moved aggressively in the health space because of data privacy, compliance and many other issues,” Ipsen says. “If we get the compliance and regulatory issues right, we can build a compelling case for health moving to public cloud. Once you get a couple of these, the dominoes start to fall.”

[ More: Why Healthcare IT Spending Needs to Shift Its Focus ]

Microsoft is similarly enthusiastic about the prospects for the company’s cloud platform to make inroads in the education sector, where Ipsen cites a string of recent customer wins for its Office 365 cloud productivity suite, indicating a strong momentum in that market. “We’re winning back from Google big time,” Ipsen says.

As enthusiastic as Microsoft and scores of other U.S. vendors may be about their prospects in a cloud market that’s poised for steep growth, the fallout from former NSA contractor Edward Snowden’s revelations about government surveillance looms large.

[ Related: ‘Stop Watching Us’ Coalition Aims to Stop NSA’s PRISM Surveillance Program ]

Even before the Snowden leaks, firms such as Microsoft and Google had been warning that they were facing a trust issue in foreign markets, particularly in Europe, as potential customers and government officials raised concerns about the ability of U.S. law enforcement authorities to gain access to data stored in the cloud under the Patriot Act. Now, with a steady drumbeat of bombshell stories detailing the tactics of the NSA in conducting surveillance, including the clandestine PRISM program used to scour emails, that situation seems to have gone from bad to worse.

Ipsen yesterday sought to reassure the global audience of Microsoft partners that the company will continue to push back against overreaching surveillance efforts to preserve safeguards shielding customer data from dragnet intelligence collection.

“Across our business, with public sector and commercial, issues around the cloud and privacy and information have been a tough one in the last year with the NSA PRISM issue. We worked hard and aggressively to make sure that we meet the highest standards around the world and we preserve the data integrity and confidentiality of our customers’ information,” Ipsen says.

“We have to get this right,” she adds. “At the end of the day, trust and transparency is the foundation of everything.”