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Microsoft’s direct billing of Microsoft Office 365 is designed
to set the pricing for the cloud-based productivity suite without caving in to
any pricing pressures, Microsoft Channel Chief Jon Roskill told Channel
Insider. And the order to do it that way comes directly from CEO Steve Ballmer.

Microsoft is billing customers directly and has designated a
small group of syndication partners – service providers and telcos – who can
bill customers directly for Office 365 services.  Service-focused IT solution providers have
told Channel Insider that such a setup is not acceptable and they won’t sign on
with Office 365 until they can bill their customers.

“That’s telco’s core competency – billing,” Roskill told
Channel Insider, explaining the reasoning. “They are best at that. Better than
we are.”

Meanwhile, managed service providers and others who are
looking to present end customers with a single bill for all services can work
through the syndication telco partners, Roskill said.  But that doesn’t mean the discussion is over.

“We hear the feedback and we talk about this regularly at
Microsoft,” Roskill said. Indeed, Microsoft switched from quarterly payments to
partners to monthly payments for just that reason.

Roskill pointed out that there is functionality in the BPOS
and Office 365 tools that enable customers to delegate administrative rights to
their partner of choice, and that he’s asked partners to show that to him. Only
about 500 of them have that today, he said.

Channel Insider attended some of the breakout sessions specifically
about Office 365 and it’s true that most partners seem unconcerned about the
issue of who bills the customer. 
Partners were more interested in which customers to target and how to
navigate the licensing and how to have a discussion with customers about
prices. Roskill said that the partners at WPC were among those leading the
charge to the cloud

One partner in a break out session about cloud licensing expressed
concern about not being able to tell potential Office 365 customers how much
they would save if they moved from on-premise solutions to the cloud – a key
part of any sales discussion based on saving money. That’s a calculation that
must be done on the back end taking into account the current licensing and the
move the customer would make, Microsoft representatives told him.

Another concern for partners this year – the new Competency
program. Microsoft has moved from 16,000 Gold partners before to having 6,000 Gold
partners now who hold 9,000 competencies, about 1.5 average per partner. While
some may point to how hard it is to achieve competencies, Roskill said that is
by design.  And now Gold and Silver
partners have direct access to their region’s product managers, a key benefit that
enables them to provide feedback on products to someone who can make a