How to identify and leverage the nuances, opportunities and tools necessary to effectively navigate Microsoft’s Office 365 business arena.
Marc Benioff, chairman and CEO of Salesforce.com, once said: “The only constant in the technology industry is change.” Many of us feel this day in and day out in the various sectors of the tech industry as we constantly adapt our business models, shift gears with product development, tweak our marketing strategies and try to get ahead of the competition. This reality is not mutually exclusive for CSPs and MSPs, and lately has rung all too true as Microsoft’s vision for partners continues to change.
So how can service providers stay relevant and profitable, all while adapting to the constant flux in Microsoft partner dynamics? In this article we’ll explore the nuances, opportunities and tools necessary to navigate the ever-changing Microsoft Office 365 business arena.
The Changing CSP Landscape
Over the years, Microsoft has modified its CSP program, forcing partners to adapt their operations accordingly. Major changes to the Direct CSP service provision model were first announced in 2018, but changes to both Direct and Indirect CSP programs have started to become a reality. One Microsoft partner, AppXite, predicted that only 20% of Direct CSPs would keep their status throughout this shift. Here are some of the changes to requirements and benefits of the Direct CSP program:
- Microsoft support contract required ($15,000/year for ASfP or $50,000/year for Premier)
- Partners must have infrastructure to support billing and provisioning infrastructure
- Partners must provide at least one managed service, IP service or customer solution application
- Updated incentive rates and direct rebate payments reduced, with 40% going toward co-op fund incentives (impacts both Direct and Indirect)
In 2019, we also saw some partners grappling with change related to the new “Microsoft Customer Agreement” (MCA) model for Azure. At renewal time, the MCA encourages and easily opens the door for customers to purchase their licenses directly from Microsoft, with partner activities consigned to mostly “value-added presales services and post-sale solutions for your Azure services.” Since this is the new approach for Azure, one has to wonder if Office 365 will follow.
Given these changes, the next logical step for CSPs is to create unique value-add services around licensing. This approach allows you to build your own margins, which offers more flexibility and provides a better safety net if Microsoft decides to change its CSP programs even further.
Stephen White, Research Director for Gartner said it best: “Microsoft has begun making the line in the sand more visible–providing licensing without services, and lightweight services providers seeking to leverage the transaction may be on the wrong side of that line moving forward.” Differentiating is critical in order to stay relevant and competitive, and to stand out in an already crowded Microsoft Office 365 space.
New Opportunities Created for MSPs
These changes might not sound like the best news for your traditional CSP partner, but they do provide some big opportunities for MSPs, where the business approach is often holistic and already includes services. While Microsoft’s new direction has led partners to explore new and expanded service opportunities, a shift in customer buying preferences is also impacting the types of services MSPs are offering.
In recent years, we’ve seen a trend developing around large enterprise customers gravitating toward turnkey solutions for all IT needs that fall under the managed services umbrella–licensing, IT services, support, software sourcing and service desk capabilities. Their preference is to bundle services and work with fewer vendors if they can, to lessen the overhead and burden of dealing with different vendors’ contracts, billing cycles and SLAs. The operational efficiencies of reducing overhead and simplifying costs is not only highly attractive, but also has become somewhat of a crucial commodity.
Another reality is that customers don’t want
From https://mymarketlogic.com/blog/staying-relevant-in-microsofts-ever-changing-partner-ecosystem/
from
https://marketlogic0.wordpress.com/2020/03/10/staying-relevant-in-microsofts-ever-changing-partner-ecosystem/
No comments:
Post a Comment