Next month’s Microsoft WorldWide Partner Conference 2007 (WWPC) in Denver is expected to host some bruising backroom encounters, as its major channel partners go-head-to-head with Microsoft over the company’s hosted services market strategy.

Since last year’s WWPC event in Minneapolis, Microsoft has been quietly raising the profile of its emerging Software + Services strategy. It has published tariffs for services built around SharePoint, Exchange and Live Communication Server products, but at the same time it has been reassuring channel partners that potential package software sales losses could be more than compensated for by a new services revenue stream.

However, at last week’s Microsoft TechEd 2007 event in Orlando, Microsoft revealed that its own managed services business is already taking shape, raising concerns among some of its larger channel partners that the company is ready to deal directly with bigger customers.

According to a report on ZDNet’s All About Microsoft blog, Microsoft is not only set on creating a service-based alternative to all its packaged software products, but the company’s VP of Managed Solutions, Ron Markezich, has also said that Microsoft plans to create its own managed services to host them.

Next month’s WWPC 2007 agenda features a number of events designed to encourage Microsoft’s channel partners to invest in Software + Services hosting businesses. It remains to be seen how eagerly these events will be attended by Microsoft’s strategic partners, given that, for the first time, they will now be expected to compete directly against their major technology supplier.