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Partner Choice for Success
What IT Solution Providers Need to Know about the Value of Microsoft’s
CSP Licensing Program and the Choice of Relationship Models
An IDC eBook, Sponsored by Microsoft

Цитата:

Investment Snapshot #1
• To put all this in perspective, consider a partner acting as an MSP that engaged as a direct
provider in the CSP Program. The partner had annual costs of $200K for two full time support
staff, and to maintain its technical support infrastructure
• It took the partner a year to reach profitability based on Microsoft recurring revenue of $200K
a month. “We were not starting from scratch. We had managed services infrastructure and
people in place,” said this U.S. partner.
• Another factor for this partner was that they were also temporarily using a manual billing
system. They’ve since deployed a white label third-party platform for billing/provisioning,
which is an additional cost that amounts to a percentage of the partner’s revenue.
• However, that new system has also saved the partner in hours and money through greater
efficiency and billing accuracy.

Investment Snapshot #2
• Even a partner that already had an automated billing system and 24/7 first and second level
support, invests close to $400K annually to support IP development on its platform.
• Although custom development doesn’t generate revenue for this partner, it contributes
to customer satisfaction through productivity gains and automated services delivery.
“Developing our own IP is important for making the solutions work for the customer through
dashboards, automation, and provisioning,” said this European partner, adding that its five
developers will eventually switch to creating value on top of the Microsoft CSP stack that can
generate revenue.

Investment Snapshot #3
• Still another partner initially invested $60K for backend integration with the Microsoft APIs, and
another $20K annually in support costs.
• Depending on customer size and requirements, initial Office365 deals for this partner amounted
to $4K-$6K in monthly license revenue and $45K for professional and managed services. For
Azure, the deals were generally larger – $3K-$10K in license revenue and $100K – $300K in
migration and managed services.

Investment Snapshot #4
• There are also added costs in cases where partners expand to more complex cloud services,
such as Azure. Staff training investments are a fact of life for partners, but transitioning to Azure
can increase that investment. One partner estimated that cost at $50K annually, which included
training costs plus staff time out of field.
• However, transitioning to Azure from its own infrastructure and another provider saved this
partner money by decreasing staff and administrative costs. This was validated by a Canadian
partner that steadily improved its EBITDA by cutting its own infrastructure costs and making
investments in the CSP Program. That same partner invested another $50K annually for its billing/
provisioning system, which leveraged already existing software.

Investment Snapshot #5
• Not all partners that choose the direct model are benefiting fully from that choice. One partner
that had invested $60K was still using a manual billing system because of issues with managing
the back-end integration with the Microsoft APIs. “We’re still struggling with it. We work with the
Microsoft APIs, but that doesn’t mean it automatically connects to your finance system,” said the
European partner.
• Even though this partner was profitable after a year it may look at third-party platform options for
billing and provisioning. In that case the partner would be paying a third-party a percentage of its
cloud revenue, which would change its financial picture. “I would advise smaller partners to go for
a distributor that’s offering the billing tools and everything else,” they said.