New Competencies, Benefits and Incentives
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 difference.
Other news from day three of Microsoft WPC included changes in the competencies partners can achieve – the addition of a Communications Competency and the merging of the Systems Management and Virtualization Competencies into one.
Roskill announced the changes during the day’s keynote address and urged partners to make sure they were getting all they could out of the Microsoft Partner Network by taking advantage of marketing opportunities, updating their Pinpoint online catalog profile and using the Learning Center.
In addition, Roskill told partners that Microsoft was expanding the internal use software allowance increasing the Cloud Essentials benefit from 10 seats to 25 seats and the Cloud Accelerate benefit from 25 to 100 seats.
Roskill said Microsoft will invest $5.8 billion in the partner ecosystem in fiscal 2012 with a significant portion of that going to channel incentives. While the old model rewarded just the transaction, now partners will be rewarded along the entire sales cycle from sell to transaction to deploy to manage.
Microsoft will also introduce a new Lync solution incentive program that rewards partners who lead with Lync, a video collaboration platform.
"We are moving from a world of transactions to lifecycle solutions," Roskill told partners