In the last few years, Microsoft has been slowly but surely phasing out one of its oldest and most successful partner programs. If you’re an IT service provider selling Microsoft cloud solutions, you’re probably aware of the changes to the Online Services Advisor (OSA) program. Partners have been encouraged to move to the Microsoft CSP (Cloud Solution Provider) program. To say the implications are huge is putting it mildly.
Last year (October 1, 2016), Microsoft announced the termination of recurring incentives for OSA partners. Starting July 2017, Microsoft Advisors will no longer earn commissions for reselling cloud products such as Office 365 and Azure. Moreover, you will no longer earn commission for the subscriptions you currently manage for your customers.
The changes apply to the tens of thousands global partners signed on as resellers under the Online Services Advisor program. Under this program, Microsoft partners would earn a percentage of subscription fees on packages sold. They would even receive frontline help from Microsoft’s crack support staff. OSA gave IT service providers a hassle-free way to tap into the cloud, but something even more promising is ready to stand in its place.
Moving From Microsoft Advisors to Cloud Providers
Microsoft partners were encouraged to make the jump to the Cloud Solution Provider (CSP) initiative introduced back in 2014. CSP provides the opportunity to sell various Microsoft cloud solutions alongside your existing products and services. This program is a significant upgrade over OSA. Here’s why:
Better profit margins: With OSA commissions practically being chipped down to nothing, the ability to generate revenue is the biggest draw to signing on with CSP. Microsoft has increased CSP commissions on Office 365 subscriptions. It has also created additional revenue opportunities by offering back end commissions through select partners and further incentives in promotions geared to drive partners over to CSP.
Competitive advantage: CSP gives IT firms an opportunity to leverage the cloud and take business to the next level. Resellers can bundle Azure, Dynamics CRM, Office 365 and other standalone solutions with value-added services such as backup, security, and support. Crafting unique IT solutions tailored to the needs of your market enables you to stand out from the crowd.
Simplified billing: Straightforward billing is something OSA partners and end users have been requesting for years. Microsoft finally delivered with CSP. The program puts the billing process in the hands of the reseller, who now sends their customer a single invoice.
This final reason weighed in heavily on the change from Microsoft. Customers prefer to purchase cloud services from a single source, rather than deal with the cost and complexity of managing relationships with different vendors.
Making the Move to Microsoft CSP
There are some important factors to consider, before becoming a Microsoft Cloud Solution Provider (CSP).
What You Need to Know
Microsoft’s CPS program offers two opportunities for partners. First is the direct partner. As the name suggests, these resellers work directly with Microsoft itself. Direct partners receive all the training, tools and support needed to stand on their own as a cloud service provider. However, in order to take advantages of this opportunity, partners must meet the following criteria:
- An existing IT solutions business model
- Resources to customize pricing structures and manage customer billing
- Infrastructure to provide dedicated customer support
- Ability to scale to business demands
The second option is an indirect partner. These partners don’t have the infrastructure or capital to go all in with CSP, yet still want to maximize their investment in the cloud. Indirect partners work with direct partner – or indirect providers – to get help with service integration, billing, and support. This program is ideal for MSPs and VARs looking for a low-cost way to gain an edge in the increasingly competitive IT services arena.
Be it direct or indirect, the CPS program calls for partners to make a serious commitment.
Putting your neck on the line for billing and support is a huge responsibility. CSP partners, both direct and indirect, automatically assume responsibility when something goes wrong. And when customers are involved, compliance concerns and legal issues aren’t far behind. While the company has a good reputation for taking care of its partners, there isn’t much you can do if the Microsoft cloud goes down. Reliable backup and disaster recovery services can make a difference, if you’re looking at incidents such as accidental deletion or ransomware encryption.
Microsoft Partner Setup
I’ve noticed that both Microsoft and some of its direct partners are promising a seamless transition from OSA to CSP. Sounds good, but IT migration projects are rarely ever a walk in the park. Be ready to make changes to accommodate changes related to pricing, billing, and support. All the while, make sure that customers experience as little disruption as possible. Microsoft has been sending out generic emails to notify all parties involved about the dismissal of OS. But it’s a partner’s responsibility to guide customers through the transition.
Many members of the Microsoft partner network have carved out a cozy spot in the global technology landscape. With the cloud as its catalyst, the CSP initiative could be the trend that catapults the next wave of partners to enterprise success.