I was recently at a conference for technology solution providers, put on by an industry association. There I was sitting at a roundtable near the front. To my left and right were executives of managed service providers (MSPs), internet service providers (ISPs) and others, but the real action was directly across the table, frothing at the mouth. It wasn’t a rabid dog, it wasn’t a sports fanatic describing a huge loss — it was a Microsoft sales rep.

After listening to the backlash from the executives, the rep finally reached his boiling point, when the question was asked, “When are we going to be able to start billing our clients directly for Office 365?” His eyes glared back at us, his face turned red in anger, and with a firm voice, he blurted, “never, it will never happen.” Emphasis on the never was hard to mistake.

While there was not any actual foam (although I think there was some spittle), it was pretty tense. I have been to a lot of conferences, and Microsoft reps are continually getting their egos bruised and bashed by solution providers. I think they must rotate them out often, I imagine so they can attend counseling of some sort.

A couple days later I was talking to one solution provider. He told me of a song that described how he felt. The song: Pay The Devil by Van Morrison…

One man’s meat is another man’s poison

One man’s gain can be another man’s loss

I’m travelling down the lonely highway

‘Cos a rolling stone don’t gather no moss

Once I thought I could live the kind of life I wanted

But the wayward wind made me restless and a fool of me

‘Cos I thought I could settle for the nine to five life

Well I guess it just was never meant to be Now people talk and they speculate about what other people would do

But they can’t put themselves within my shoes

It used to be my life, now it’s become my story

I’m heading down this highway with those blues

Many solution providers are feeling huge pressure and “blues” as they try to adjust to a changing landscape, one in which they might not have as much control. Market shares for solution providers are continually shrinking. A big part of that shrinking share is the ever-growing list of companies going direct to consumers and businesses, often through cloud models. The “Channel Only” mantra is not being heard too much anymore.

Last week a silent applause rattled the world when tuCLoud’s CEO, Guise Bule, voiced his displeasure over Microsoft’s desktop virtualization licensing terms. In April, tuCloud. through a new company called Desktops On Demand, will launch a service in the United States that lets customers access a hosted Windows 7 virtual desktop as well as Office applications from PCs and mobile devices. The desktop-as-a-service (DaaS), priced at $10 per user monthly, is similar to the one that OnLive launched in January.

Both OnLive and tuCloud are clearly violating Microsoft’s licensing terms. Bule gave a virtual middle finger to Microsoft saying, “OnLive is blatantly flouting the rules and Microsoft does nothing. Unless we do fight, we won’t have a business. Microsoft could file a billion dollar lawsuit against us tomorrow. We’re ready for a fight.”

While the jury is still out on how far this will go and if Bule’s company will even be real, it does echo the frustration that is emanating from solution providers and end-users. As of Mar. 27 until 29, the 2012 Microsoft Hosting Summit is taking place. Rumors say that Microsoft drastically cut down the number of invitees, and that a big announcement of some sorts is possibly coming.

I definitely don’t think Microsoft is the devil. If it were not for Microsoft, the entire technology industry and livelihood would not be what it is. But lately they sure have a funny way of thanking their resellers. Microsoft is definetly not alone in the direct to consumer strategy, however.

Is there a silver lining? Yes, there are always opportunities. There are always ways of repackaging and selling products and services. Now is the time for solution providers to strategize and plan. Now is the time for businesses to think about who they really want to be buying from.